All Forum Posts by: Paul Linnertz

@Seth Ripley have you walked the units/grounds yet? I’m assuming the low rent is due to the condition of the property.

I am looking at two different 3-unit properties this week. I own two SFH's that I rent to college kids and the multi would be for the same purpose. My question is what kinds of things should I be looking for when checking out a multi that I wouldn't be looking for in a single family.

 I would recommend really any college town near you. UAlbany is a nice school

It’s going to work out to be an 11-month lease. Vacancy for me has been 0 so far but turnover is extremely high being college rentals. 

Buddy, I just did this to finance my second property and man did I pay for it. On top of the 10% penalty for early withdrawl, I also had to pay another 24% for state and federal taxes. This all being said, I would do it again because I needed to jump on this deal and will make back all my money in 1.5 years. There are many other ways to get significantly cheaper loans out there, but I did what I thought needed to be done at the time.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $82,500

College Rental-4-6 beds depending on the group. I am getting $500 per room this year. Net cash flow will be ~$950 per month

What made you interested in investing in this type of deal?

Size of house, price, previous owner made nice renovations to main bath, kitchen, master bedroom.

How did you find this deal and how did you negotiate it?

Zillow, and negotiated price down from $93,000 to $82,500.

How did you finance this deal?

Conventional 20% down, had to liquidate IRA and pay STEEP penalties.

How did you add value to the deal?

Cosmetic work and insulation only at this point.

What was the outcome?

Renting to four college students in August for $2000 a month total.

Here we go!

-Playing With Fire-Scott Rieckens

-Set for Life: Dominate Life, Money and the American Dream- Scott Trench

-Your Money of Your Life- Vicki Robin, Scott Dominguez

-The Four-Hour Workweek- Timothy Ferriss

-The Millionaire Next Door- Thomas J. Stanley

-The Book on Rental Property- Brandon Turner

-The 10X Rule- Grant Cardone

-Never Split the Difference- Chris Voss

-Landlording on Autopilot- Mike Butler

-Rich Dad, Poor Dad/Cashflow Quadrant-Robert Kiyosaki

Living in Upstate New York I have a very similar issue with the extreme cold of winter. I am spraying insulation in my attic this spring/summer to bring my future heating bills down. I would vote you do the same.

In my opinion, you have "backpack across Europe for a year" money, not enough money to retire for life. Just CapEx alone would scare me to death. Not to mention medical emergencies or any other unforeseen costs. Without medical benefits, you're one broken leg away from serious monetary issues.

To keep it even simpler, if you have to ask if you can retire, I think it's safe to say you cannot. 

David I am really sorry I took so long to respond as I haven't logged in to this account since posting.  Your concerns are very valid and to me will perpetually be my two biggest worries. 

1.) As far as the parties and destruction go, I mitigated that with my first house by buying small. This was my very first real estate deal and it was cheap, and only 902 sq. ft. This limits the parties because there really isn't any room to do so. That being said, my second house is significantly larger (~2100 sq. ft). I am open with my tenants and tell them that obviously they are in school and they are going to have their fun, but I encourage them to have it somewhere else and keep their living space clean and safe. So far this has been effective, but I know there are people that get their places trashed on a regular basis as well. I have a couple of spots in my lease stating if they get in trouble with neighbors or local police they are subject to eviction.

2.) The turnover rate is essentially guaranteed like you said, but I have had no issue in my area finding people. Be sure to ask around and find out when groups of students go looking for their house for the next year, because I found out this year that in my area, October is the peak time for house hunting and all the bigger groups are locked in by then. I would have never guessed October would be the peak, but I have been wrong many times before.