All Forum Posts by: Rick Albert

 I'm not familiar with ACRE, do you have a link? Thanks!

Regarding the ones that require more money? Remember in real estate: creativity is key:

1. FHA 203(k) may be an option.

2. Seller handling some of the problems in exchange for a better price.

3. The Seller giving you a credit towards closing costs to offset the expenses.

Thanks @Wyatt Wolff! I'm really on the fence about it. I know the Chapter and I have connections with the University. 

I think there is a way to make this work but not 100% sure. There are probably other opportunities out there with far less risk, but if I could get this right it could be replicated quite nicely.

So these are all great points. I should probably provide some additional insight:

1. I'm analyzing a triplex walking distance to a University I'm familiar with. Because it will all be one lease, they can pay their own utilities and with drought tolerant landscaping there can be no gardener. Plus with it only being one tenant and a long term lease, it could be self managed. This saves thousands of dollars per year.

2. I understand the concern with parties and that is 100% valid. I've been to my fair share of fraternity parties. I could make the argument that many investors do student housing, where parties can happen (obviously not as much and may not to the same degree).

3. The thought is to put this in its own LLC for protection against my other properties.

4. It would almost act as a corporate lease and the Chapter can sublease. As long as the Chapter pays, I'm happy. I would disagree about the "broke" college student angle. It is my understanding they actually have a very low eviction rate. They work, have parents, student loans, grants, and scholarships to help offset housing.

5. Really what makes this interesting is that it is on a cul-de-sac of other multifamily. Buy each one and rent to a different organization. 

6. Typically each chapter would have a housing board, that could include alumni. This holds them accountable in keeping up the property and how the operations are done. 

7. These could be 10-15 year leases with built in rent increases. That saves on vacancy. How they handle their turnover is their business.

 It would, but that's really where the value is. Otherwise you are just trying to flip land. It's like me buying a house, doing nothing to it, and resell at a profit. Those days are over due to rising costs of construction, etc.

There may be a compromise with a builder. For example you hold on to the land while they get plans approved and they pay a premium with a non-refundable deposit. Long shot but in real estate creativity is important.

Hello All!

What has been your experience with Greek housing? Basically you have a master lease to the local Chapter and they fill in the rooms as needed.

Some considerations:

1. Insurance: I was active in my fraternity and I know how the parties go.

2. Rental Amount: Charge "normal" market rates, higher?

3. Master Lease: Just the organization? Alumni? 

4. Evictions: How would it work?

I'm thinking it would be structured like corporate housing but would love your thoughts.

Thanks!

 That is deal specific. I could argue if someone is house hacking at 3.5% down then that is an even better return. It just depends. 

I think the big component is leverage. 

You buy a $1M asset that is leveraged at 80% LTV. Appreciation is based on the $1M, not the $200K.

The other component is no matter what happens to the property, you always have at least land value. You could invest in a company that goes under and you lose everything. Plus real estate is a necessity. People have to have a roof over their heads. I would make the argument that real estate is safer in a lot of ways.

Is it in foreclosure and heading to the courthouse steps? This can get complicated if you are racing against time between getting it sold versus the banks take over.

Can you get it sold at a high enough price to pay off the mortgage or is the owner under water?

Take a step back. LLCs are expensive. There are tax filings and yearly fees associated with them. 

Of course consult appropriate legal and tax advice, but generally speaking many investors start with buying a few before going down the rabbit hole of LLCs. Maybe buy a few rentals first and then go from there.