Buying in College Towns

19 Replies

This would be our first property. 

My brother and I found a tri-plex in Lawrence, KS (this is where the University of Kansas resides and where we both attended school). My brother lives in Kansas City which is only a 40min drive from Lawrence. The predicament: the only way we can afford a downpayment on this tri-plex is if my brother uses his first time home buyer and house hacks. He is open to the move. The owner wants $295k. Current rent is $2,920. 

Positives: great location (should always be high demand for renters). Current owner is paying for water. Total closing cost should be under 20k. No major repairs needed. Potential to add value cosmetically. My brother is only a year out of school and still has connections in Lawrence. KU is a growing University.

Negatives: It doesn't meet the 1% rule, not to mention my brother will have to take the smallest unit pushing monthly income down to $2,290. It is next to a popular bar area = party tenants. Not getting a great deal on the property - we would have to purchase at market value. 

We are also looking at properties in Kansas City and Omaha (where I live). We are trying to decide if we should go for it or wait for a better deal in Omaha or Kansas City. Any thoughts, comments or suggestions would be appreciated. 

Thank you.

Would you mind DM'ing me the address?  It looks like it's close to fitting my parameters.  If I end up with it I'd throw you some good will / dinner / bar tab if you're interested.

@Spencer Goldenberg My wife and I are also thinking about purchasing a SFR near UMKC to use it as a student housing! Been hearing a lot about students having hard time living near campus due to expensive housing costs, so thought this would help students once scaled up in the future. We have been looking around the area and there are a couple of good houses if rented by room.

Very curious about your journey! Keep us posted!

Cheers

Originally posted by @Koki Agata :

@Spencer Goldenberg My wife and I are also thinking about purchasing a SFR near UMKC to use it as a student housing! Been hearing a lot about students having hard time living near campus due to expensive housing costs, so thought this would help students once scaled up in the future. We have been looking around the area and there are a couple of good houses if rented by room.

Very curious about your journey! Keep us posted!

Cheers

 Good luck to you, be sure to check out https://www.airdna.co/ as far as seeing if you can do better deal as an Airbnb especially if the area is visited by tourists and of course parents, lol.  Good luck to you

Hi Spencer, I am actually looking to do the same as far as starting my own brokerage once I am qualified, just became newly licensed as of September 2019, good luck to you on building your portfolio.

Originally posted by @Spencer Goldenberg :

@Daniel Umstead thanks for sharing the site (it looks awesome) and congrats on being newly licensed. Good luck to you as well! If you ever want to look at the Midwest - make sure to reach out. Omaha is a great market. 

 Definitely will! Thanks for connecting with me!

Rent for students at both Kansas and Kansas State (I go to Kansas State) are pretty high. Manhattan, which is where K-State is at, has seen a pretty high increase in rent prices over the years. Most rooms rent for $350+ and apartments are more like $400+. So rent is high, but so are housing prices. Some owners are trying to sell houses near campus for over 200K! Finding houses to at least meet the 1% rule has proved to be very difficult for me. I do have a suspicion that finding seller financing will become easier in the coming years. I have a lot of friends from farming families from western Kansas that a lot of their parents went to K-State. They were smart enough to get in the market when housing prices were low and are now retiring off of these rentals. I imagine as they get older they will want to unload the properties as they won’t want the hassle of managing them anymore. I am still looking for a strategy to implement in Lawrence, as I would like to bug rentals there as well because I am originally from right outside Lawrence.

You could transition a unit to short term or furnished month to month to achieve 1%

These are both great strategies in a campus environment and have worked well for my house-hacked triplex near Ohio State University

Definitely worth checking out Airbnb's in the area and see what kind of numbers they're getting.  I have several Airbnb's on campus walking distance to the stadium and they do great. About at the 3% rule with self management.  The football games are big pay days but there's plenty of guests that want to stay close to campus throughout the year too.  

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