New, young investor looking for guidance.

General Real Estate Investing
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New, young investor looking for guidance.

Coy Messer
Member since 2026 · 10 posts · 6 votes

Hi everyone,

My name is Coy Messer. I’m turning 20 next month and I’m from a small town in Iowa. I started my own business (in a different industry) about 5 years ago, and it has grown to the point where I’ve built up a decent amount of capital that currently isn’t being invested as efficiently as it could be.

That’s what’s pushing me toward real estate. I want to take advantage of my age and long time horizon to start building something meaningful early. I’ve had a lot of people tell me to “get into real estate,” but I haven’t gotten much actual guidance. So I’m trying to learn as much as I can and make a smart first move.

The Deal I’m Looking At:

I’ve been analyzing what would potentially be my first property, and I’d really appreciate feedback from people with more experience.

  • Property Type: Multifamily - 7 units
  • Location: Cedar Falls, Iowa (near a college campus)
  • Tenant Base: Primarily student/college-area renters
  • Asking Price: $769,000 range
  • My Target Offer: Around $600,000

Financials (Based on Current Info from Realtor)

  • Current NOI: $64,000
  • Cap Rate at $600K: ~10.6%
  • Financing Assumption: 25% down, ~7% interest, 20-year amortization

From my projections, the deal cash flows, but not at a massive level after debt service (or is this a nice cash flow given the property). However, I see upside in improving operations.

Value-Add Opportunities

  • RUBS:
    Currently, utilities are not fully passed through to tenants. My understanding is I could implement RUBS over time as leases renew and recover a portion of those expenses.
  • Operational Improvements:
    Some units have been updated, but not all. There may be room to gradually improve rents.
  • Location Advantage:
    Being near a college, demand seems relatively stable, but I also want to make sure I’m not underestimating turnover risk.

My Main Questions / Concerns

  • Does this seem like a solid first deal, or am I forcing it just to get started?
  • Am I analyzing this correctly from a risk standpoint?
  • How much weight should I put on future upside (like RUBS), vs. buying strictly on current numbers?
  • Is this level of cash flow reasonable for a first deal, or should I hold out for something stronger?
  • Anything I might be overlooking entirely?

Where I’m At

To be completely honest, I think the biggest thing I’m struggling with is confidence. Being young and making a decision at this level, I just want to make sure I’m doing this the right way, smart, safe, and not rushing into something just because I want to get started.

I’d really appreciate any feedback, advice, or even criticism from those with experience in the industry.

Thanks in advance.

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  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    Coy, this is a solid first deal for your situation. You're 20, have capital, and you've already scaled a business -- that puts you way ahead of most people starting out. A 10.6% cap rate on a stabilized 7-unit in a college market is decent, especially with the cash flow and upside you're seeing.

    A few real thoughts: First, don't underestimate the student tenant side. Turnover will be higher than a typical rental market, and you'll spend more on turnover costs, marketing, and vacancy prep. But you already know that, so build it into your proforma. Second, your RUBS implementation is a good play -- utilities are where most student housing owners leave money on the table. Third, 10.6% cap at that purchase price is solid in the current market, but make sure you're not forcing it just to get started. You said it cash flows after debt service, but how much? 00/month? That's not a home run. 000+/month is breathing room.

    The upside you see with operational improvements is realistic, but don't go in assuming you'll unlock it immediately. Plan conservatively and be pleasant surprised. How much of your capital is this deal taking up, and what does your reserves look like after you close?

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Hey,

    Thanks so much for the reply. Looking back at the financials that I receieved, I was wrong.


    2024 NOI: $55,800

    2025 NOI: $56,500

    If the purchase price was $600k w/ 20% down at 7% for 20 years that would be about $1,100/month after debt service. After RUBS is installed, it should be about $1,600/month in cash flow.

    How does that sound for this deal? Just looking for insight, thanks!

    0Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    6mo

    I would be curious with it being your first one if the bank will require 30% down or so. If you got it for the right it doesn't seem bad but a 170K price cut from them is very unlikely. I'd have a conversation with the listing agent or a local broker to see where the seller is at. RUBS is definitely worth it but will be a longer term plan, you might have some kickback from the tenants. Have you spoken to local PMs and looked at where the rent is at compare to market? 7 units off the bat is doable and you are detailed, keep running numbers and looking at deals. 

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Thanks for the response Caleb! 

    Yeah, 30% could be what I would have to do, I’m not sure. I still have the capital available though to do 30%. 

    I’m not sure how willing the seller would be to negotiate. If has been on the market for around 100 days. For a multi-family property, that amount of time probably isn’t very long right? 

    I’ve spoke with the listing agent and they seem to be willing to entertain offers, just not sure how much room they have though. 

    Another thing I was wondering was if this was a red flag. It looks like they purchased the property only about 5 years ago. I’m sure selling it within 5 years could mean lots of different things but makes me wonder if this isn’t the best of deal if they are selling so soon? Or could this be typical?

    I’ve spoken with the property manager as well and I think I would just keep them in place for awhile until I get settled in. Is that a fair game plan? 

    Anything else raise any red flags or any other suggestions for me? If the numbers still align from the information that I have, I will still submit an offer. 

    Thanks for the engagement on this. I appreciate all the info!

    0Reply
  • Ethan JenningsPro Member
    Real Estate Agent · Cedar Falls, IA · Member since 2020 · 8 posts · 5 votes
    6mo

    Hi Coy - I have looked over the property in question as I am a local Realtor. One thing that worried me when I analyzed it was the fact that the units have baseboard heating and some have window units for AC. If you implemented RUBS not on you but if the electricity is baked into the rent I was thinking about the capital expense of putting something more efficient in over time (mini split etc.).

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Ethan,

    Thanks so much for checking out the actual deal, I appreciate that! Any input helps tremendously as I obviously want my first deal to be somewhat solid. I understand my first deal is more for the leaning game but also don’t want to get burned on it either. 

    I sent you a private message as well. Let me know if you got it! 

    Thanks everyone for the input. If anyone else has any suggestions, ideas, or feedback, I’m all ears! 

    Thanks!!

    0Reply
  • Greg W.
    Buy and Hold Investor · Alexandria, VA · Member since 2013 · 180 posts · 48 votes
    6mo

    I like the location. I like that it's brick. I don't love that they bought it for $425k in 2019. With students you have more wear and tear and yearly turnover, which is fine as long as you are comfortable with that. The only RUBS you could really do is for water, but you could do that more cheaply by just charging an extra $20 or however much (monthly water bill divided by 7) for each unit as a monthly bill. This will be another job for you, unless you hire property management, especially around June of every year when you turn over a bunch of units. You may want to have an agent or look on realtor.com to see what other recently sold apartments sold for per unit to see if this is a reasonable price. This property is selling for about $110/unit. I see apartment houses, listed for $59k - $79k. Houses aren't the same as this building and would trade at a discount but I'm not sure by how much. Also, what's the rental history of the building and the rental rate history? Are they always full and in demand or are students looking for newer properties? Is the student population growing, shrinking or just level? If it's growing, you can push rents, if not then you are stuck with little to no increases or worse, vacant units. You'll probably need to put money into those other units to rent them, compete against newer units and get a higher rental amount. Looking on the GIS and Beacon websites, you can see the roof and siding were done in 2015 and windows in 2014. The current owner may have refurbished a few units but probably hasn't put too much capex into it. Beacon also shows that it's 4 units. Are there actually 7 units and are the others legal? The website could have incorrect information. The owner owns rentcedarvalley.com and has CV Properties, II, III LLC. I like the property, but it has to be at the right price.

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Thanks for the response and feedback, Greg! Yes, I did see that it was purchased for $425k just a few years ago so that did have me wondering/curious as to why they were asking that price and why they were selling it so soon. 

    Good point about RUBS and the actual cost of utilities. I never even thought about that but it does make me wonder as they had utilities listed around 7k/year so wondering where that could possibly come from with window AC units. Any thoughts?


    Thanks again for the feedback! Let me know if anyone else has any input!

    0Reply
  • Ejiade Kehinde
    Member since 2026 · 8 posts · 0 votes
    6mo

    I help real estate investors capture more leads, a follow-ups, and close more deals through simple, effective systems.

    I specialize in building high-converting websites, CRM setups, and automated workflows tailored for investors who want to scale without losing opportunities.

    Focused on results, not complexity.

    0Reply
  • Greg W.
    Buy and Hold Investor · Alexandria, VA · Member since 2013 · 180 posts · 48 votes
    6mo

    My guess for the utilities is the landlord is paying for water and heat. I saw on the listing  the heating fuel type is natural gas, which didn’t make sense to me because there are baseboard heaters. A quick search told me, “Baseboard heating systems, available in electric and hydronic (hot water) types” which is expensive, especially if you are paying for it as the landlord. I have a four unit with a boiler and wow is the bill high in the winter. You can replace the boiler and have a boiler split to individual units or you can get heat pumps. Either option is going to cost you a lot of money to retrofit. As part of your due diligence, get the heating bills for the past year so you know what you are getting into and can project that expense. Otherwise plan to retrofit with heat pumps at $8-10k per unit. Or you add a monthly heat bill to each unit so you don’t pay it. Tenants will ask what the utility costs are and this building could be more than others that have electric heat. So do some market research on the all in cost of renting similar units. Call other landlords and find out that information to see how this building would compare. 

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    This is a solid first deal. Not perfect, but solid. The cap rate at 00k is real, and honestly, 10.6% cash-on-cash (assuming conservative vacancy) is better than most first multis. You're analyzing it right -- you're looking at both stability AND upside, which is the right framework.

    But here's what I want to push back on: You're worried about whether it's a good deal, not whether it's a good FIRST deal. These are different things. A 7-unit college property has more moving parts than a 4-unit or 5-unit, especially with turnover risk on student tenants. That's fine if you're hands-on. If you're delegating to a PM, student housing is harder to manage remotely.

    On RUBS -- yes, implementing that over time is smart. But be realistic: You'll get maybe 50-70% adoption before tenants start bouncing. That's still money, but it's not a home run.

    The real question for you: Is this your first property ever, or your first multifamily? If you've never owned real estate, I'd honestly look for a 4-5 unit in a non-student market first. Easier to manage, easier to exit, fewer surprise issues. But if you've already done single families, this Cedar Falls deal is worth a closer look.

    One thing you should verify: What's the current tenant situation? Are leases month-to-month or annual? That matters for your ability to implement changes without tenant pushback. And what's the actual turnover rate on student units -- is it 40% annually or 70%?

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    This is a solid first deal. Not perfect, but solid. The cap rate at 00k is real, and honestly, 10.6% cash-on-cash (assuming conservative vacancy) is better than most first multis. You're analyzing it right -- you're looking at both stability AND upside, which is the right framework.

    But here's what I want to push back on: You're worried about whether it's a good deal, not whether it's a good FIRST deal. These are different things. A 7-unit college property has more moving parts than a 4-unit or 5-unit, especially with turnover risk on student tenants. That's fine if you're hands-on. If you're delegating to a PM, student housing is harder to manage remotely.

    On RUBS -- yes, implementing that over time is smart. But be realistic: You'll get maybe 50-70% adoption before tenants start bouncing. That's still money, but it's not a home run.

    The real question for you: Is this your first property ever, or your first multifamily? If you've never owned real estate, I'd honestly look for a 4-5 unit in a non-student market first. Easier to manage, easier to exit, fewer surprise issues. But if you've already done single families, this Cedar Falls deal is worth a closer look.

    One thing you should verify: What's the current tenant situation? Are leases month-to-month or annual? That matters for your ability to implement changes without tenant pushback. And what's the actual turnover rate on student units -- is it 40% annually or 70%?

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    Okay, first -- good instincts starting with a multifamily and having a target offer vs. asking price. That shows you're thinking like a buyer, not a dreamer. But I'm gonna be blunt: I'd pump the brakes here. A 10.6% cap rate at your offer price is thin for a first deal, especially with student tenants. Turnover in college housing can be brutal, and one bad year of vacancies throws your numbers off a cliff.

    The RUBS strategy is solid, but here's what people miss: implementing RUBS on a 7-unit building doesn't happen overnight, it costs money to do right, and your tenants might bail if they're suddenly paying utilities. That's not a given income stream yet. Your cash flow projections after debt service also depend on everything staying stable -- no major capex surprises, no extended vacancy. With college housing, that's optimistic.

    Here's what I'd actually do at your stage: Find a property in the 3-5 unit range instead, preferably with better margins. Your goal on a first deal should be learning operations without getting squeezed on numbers. Once you've held one property for 12 months and seen the actual surprises, you're ready for a 7-unit. You've got capital, which is the hard part -- don't burn it on a tight deal to "get started."

    What would the numbers look like if you targeted a 4-unit instead, and are there any 3-5 unit buildings in that Cedar Falls market?

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Bo & Greg,

    Thanks so much for the replies back, I really appreciate it! This is exactly the insight that I am looking for! This would be my first property EVER, not just first multi-family property. You both brought up great points with things that I have not considered. I will continue my search for my first property ideally in a non-college student housing area and with less moving parts and things that need to be done, like RUBS and heating situation.

    Without giving away anyones secrets, where are the best ways to search through potential deals? Are Crexi & LoopNet the way to go?

    Thanks again everyone for the great feedback!

    0Reply
  • Stevan Stojakovic
    Financial Advisor · FL · Member since 2024 · 466 posts · 113 votes
    6mo

    LoopNet and Crexi are fine, but understand you’re competing on fully marketed deals where pricing is already optimized.

    The edge is local. Build relationships with 2 to 3 active multifamily brokers in Cedar Falls and stay in front of them. That’s where negotiation and early looks happen. Property managers are another smart angle since they know which owners are fatigued or underperforming.

    Also, study sold comps, not listings. Listings tell you what sellers want. Comps tell you what buyers actually pay.

    Given this is your first deal, your biggest advantage right now is patience, not deal flow. Most people lose money forcing deal one.

    If you want, send me a couple deals you’re looking at and I’ll help you quickly filter what’s real versus noise.

    Stevan 

    0Reply
  • Greg W.
    Buy and Hold Investor · Alexandria, VA · Member since 2013 · 180 posts · 48 votes
    6mo

    Buy in an area where the rents and incomes are higher so you don't have to chase down rents. Retirees are another good class of renters as they don't move but you may not be able to push rents as much if they are on fixed income. Good luck!

    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Awesome, sounds good. Thanks!

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    20 years old with capital and a long time horizon is the best position you can be in. Seriously. Most investors are chasing deals from a place of need, not strategy. You're not. That said, I'd pump the brakes on the 7-unit college property as your first move -- and here's why.

    A 10.6% cap at 00K sounds good on paper, but college-area rentals are a specific beast. Turnover is brutal (end of semester bleeding), student tenants need management, and you're dependent on school calendar cycles. RUBS is solid, but implementing utilities captures that depend on consistent occupancy. One bad semester of vacancies and your cash flow vanishes. For your first property, you want something boring and predictable, not something that requires active management to hit your numbers.

    Here's what I'd suggest instead: Start with a single-family flip or a BRRRR in a solid rental market. Cedar Falls might not be the best fit for either, but hear me out -- flips teach you about underwriting, contractor management, and decision-making under pressure. BRRRRs teach you how to build equity AND create cash flow. Both of those skills transfer to everything else. Once you've done one or two of those, the college property becomes a much easier decision because you'll actually know what you're walking into.

    Have you looked at any single-family markets near you, or are you set on starting with multifamily?

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    6mo

    You're not forcing it, but you're also not asking the right questions yet. A 10.6% cap rate sounds good until you factor in college town tenant volatility. You're essentially buying a portfolio of 7 annual leases where 4-5 units might turn every year. That's operational overhead that'll eat into your free time and your margins.

    The RUBS opportunity is real, but here's the thing -- if utilities aren't currently recovered, that tenant base is used to paying a certain rent. When you implement RUBS and effectively raise their rent, you'll see turnover spike. Plan on losing 1-2 units during implementation just from people bouncing to cheaper buildings. Your cash flow math needs to account for that friction, not assume smooth implementation.

    Here's the framework you should use: (1) what's the worst-case scenario if you hold it for 10 years with zero appreciation? Just cash flow. Does that pencil? (2) What's your actual time commitment if you self-manage or closely oversee a property manager? (3) Could you deploy that 0-70k down payment into 2-3 single family deals in better B-neighborhoods and get more stable tenants? Sometimes one deal doesn't beat a portfolio.

    You've got capital and time horizon, which are your superpowers. Don't burn them on a deal that's just okay when you could find one that's solid. What's the tenant demographic breakdown right now -- are these all students, or is it mixed student/professional?

    0Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    6mo
    Quote from @Coy Messer:

    Hi everyone,

    My name is Coy Messer. I’m turning 20 next month and I’m from a small town in Iowa. I started my own business (in a different industry) about 5 years ago, and it has grown to the point where I’ve built up a decent amount of capital that currently isn’t being invested as efficiently as it could be.

    That’s what’s pushing me toward real estate. I want to take advantage of my age and long time horizon to start building something meaningful early. I’ve had a lot of people tell me to “get into real estate,” but I haven’t gotten much actual guidance. So I’m trying to learn as much as I can and make a smart first move.

    The Deal I’m Looking At:

    I’ve been analyzing what would potentially be my first property, and I’d really appreciate feedback from people with more experience.

    • Property Type: Multifamily - 7 units
    • Location: Cedar Falls, Iowa (near a college campus)
    • Tenant Base: Primarily student/college-area renters
    • Asking Price: $769,000 range
    • My Target Offer: Around $600,000

    Financials (Based on Current Info from Realtor)

    • Current NOI: $64,000
    • Cap Rate at $600K: ~10.6%
    • Financing Assumption: 25% down, ~7% interest, 20-year amortization

    From my projections, the deal cash flows, but not at a massive level after debt service (or is this a nice cash flow given the property). However, I see upside in improving operations.

    Value-Add Opportunities

    • RUBS:
      Currently, utilities are not fully passed through to tenants. My understanding is I could implement RUBS over time as leases renew and recover a portion of those expenses.
    • Operational Improvements:
      Some units have been updated, but not all. There may be room to gradually improve rents.
    • Location Advantage:
      Being near a college, demand seems relatively stable, but I also want to make sure I’m not underestimating turnover risk.

    My Main Questions / Concerns

    • Does this seem like a solid first deal, or am I forcing it just to get started?
    • Am I analyzing this correctly from a risk standpoint?
    • How much weight should I put on future upside (like RUBS), vs. buying strictly on current numbers?
    • Is this level of cash flow reasonable for a first deal, or should I hold out for something stronger?
    • Anything I might be overlooking entirely?

    Where I’m At

    To be completely honest, I think the biggest thing I’m struggling with is confidence. Being young and making a decision at this level, I just want to make sure I’m doing this the right way, smart, safe, and not rushing into something just because I want to get started.

    I’d really appreciate any feedback, advice, or even criticism from those with experience in the industry.

    Thanks in advance.

     I think you are over-analyzing @Coy Messer. Find a good market in the midwest where your investments would make sense from both cashflow vs. appreciation. 

    You want a market that is tech driven, landlord friendly, and affordable. That will mean more jobs, more income, higher property prices, and better opportunity for your rental to perform better. 

    Any state in the midwest works. Find a major city and only invest there. Connect with a good investor-focused agent who is also an investor themselves. Have him connect you with his team of contractors, lenders, property managers. Go visit the market. 

    Your agent will send you good investment opportunities off-market and on-market. Ask for rent comps, sales comps, info on mechanicals, and have agent find out how far on the price you guys can go to make it make sense. 

    Get inspection/contractor walkthrough, speak to PM on rents, and that is all. 

    [email protected]614-802-5698
    ReafCo | Ahmed Group 539 Reviews
    WebsiteView Page
    0Reply
  • Coy Messer
    OP
    Member since 2026 · 10 posts · 6 votes
    6mo

    Alfath,

    Thanks so much for the reply, I appreciate it! Thank you for the info and guidance as well! I am new and still learning the ropes of this all! 

    What would you say is the best way to connect with a local agent that would fit the description you gave? Would here on BP be a good start?

    Thanks as always,

    Coy

    0Reply
  • Garrett CrosbyPro Member
    Real Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
    4mo

    Coy, great due diligence for a first-timer. The fact that you're asking these questions before signing says a lot about how you'll approach this long-term.

    A few things I'd add to what others have said: that $55-56K NOI is where you need to start, not the optimistic RUBS projection. Underwrite to what it's doing today and make sure the numbers work without any of the upside baked in. If the upside materializes, great — but you don't want to need it.

    Student housing is a real niche — it can work well but the operational demands are different. Higher turnover, more wear, and seasonal vacancy risk all need to be modeled conservatively. Ask the seller for the last 3 years of actual expenses (not just income) and utility bills. That will tell you the real story.

    On the quick resale — not necessarily a red flag. People exit properties for all kinds of reasons. Just make sure you understand why.

    You're thinking about this the right way. Keep going. Feel free to reach out directly if you want another set of eyes on the numbers.

    [email protected]
    0Reply
  • Greg W.
    Buy and Hold Investor · Alexandria, VA · Member since 2013 · 180 posts · 48 votes
    4mo

    Coy, consider commercial. There's less turnover and less demands from tenants. The downside is there could be only one or two tenants, so if they move out, you have to replace them, which could take a while and you have to carry the mortgage. But, you have a business and could carry it with your cash flow. Maybe look at LoopNet, there's 3611 Fast Ln that's a for lease/sale property available now. It's a NNN too. Maybe the seller can't carry it much longer and you could get it cheaper. You could even put your business in there, whatever that is. Or you can have a broker market and lease it for you. It's just another option to consider.

    0Reply
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