All Forum Posts by: Susan Grinde

Hi Montana REIs! My husband and I live in Washington State, but love Butte (it's an acquired taste). We invested in a property with our son while he attends Montana Tech. He is house hacking in it for one more year. We just purchased another SFH to use as another student rental. We are wanting to make our next purchase a multi family (duplex, fourplex, or?).

Are there any meet up REI groups in Butte? We will be there a lot this summer and would like to connect with folks who love REI and Montana as much as we do. It would be great to get our son involved in a group as he, too, would like to pursue more REI after he finishes at Tech.

We wouldn't mind meeting up for coffee with anyone with some good stories about Butte and investing. PM me!

We have a couple nicer rentals near a college campus in Montana. We have very low vacancy rates. I would recommend a couple things. First, we have parents co-sign with the students. This tends to put the more responsible students in the home. Also, try to buy as close to campus as you can. Students would rather not have to drive. Gas and parking fees add up. Because location is key to student rentals, you may end up spending a little more for a rental, but keep in mind you may be able to charge a little higher rent. 

We really have never had any student destroy any of our rentals, but we make sure the materials used in a the rentals are pretty student proof. Granite counter tops and plush carpeting have no place in a student rental. Look for hardy materials like Formica and vinyl. Even the engineered flooring holds up pretty well. Sturdy can still be easy to clean and stylish.

Also, look for a place that has a small, low maintanence yard because I don't think students have the time or interest to keep a yard maintained. Or you could hire a lawn care professional.

I have other thoughts, but for the most part we love student rentals. Best of luck to you!

We have paid for our investments using cash, but I have really started to understand what leverage can do to protect our assets. I only have a few SFR that we use as rentals and I do not have an LLC, just an umbrella policy, so what Patrick says makes a lot of sense.

"It is a lot harder to steal something from litigation if it is not yours. Being incorporated (unless in Nevada) does not protect you completely. If you have capital or assets that you or the company own, the lawyers will eat you alive if they can and take it all"

Leverage will be the way to go for our next investment(s)! I think I will still be able to sleep at night.

Just a quick update.Thanks for the insights on always trying to get a better deal. I was able to purchase the home almost $8,000 below asking (which is about 2% lower than the average sale/list %) instead of what I originally thought I would offer before asking BP community.  I now own a student rental. I will be able to raise the rent to bring it to the current rental market prices and it should nicely cash flow $600/month. With our retirement a few years off this will be nice to have in our portfolio. Now off to educate myself more (will be purchasing the Freakonomics book) and find another home to purchase

Thanks James and Franco for your valuable insights!

I know the question sounds a bit naive, but I am trying to make a purchase by the numbers and not by emotion. It is a sellers market and this home has not hit the MLS yet. The listing agent is a friend and knew I was looking for a student rental. Homes so close to the university don't come up for sale too often so I want to go in with a strong offer because I really want the house.

Just wanted to put it out to the BP community to see if many have done full price offers (or near full price). After talking to my friend (listing agent), I think I will make my offer $3000 less than asking. That will help with any update expenses.

I guess I should add that it will be used as a student rental and is right next to the university. Location is great. Condition of home is also good, maybe $2000 for new windows and fresh paint. 

If the analyzed numbers make sense at the listing price (ie, $250 cash flow and 14%CoCROI), would you still make a lower offer?

 Yes, it makes perfect sense. I think we need to have a better idea of what our intentions are with the property. Thanks for your insights!!

You are correct when you say at best I would be covering my mortgage. So I guess I can't look at it as a cash on cash return since there really won't be much positive cash flow. Would you consider it a good investment, however, if we just live cheaply by having the mortgage covered by our rents? This is a first purchase for my husband and I in a viable area, so being able to live cheaply is appealing. I would hope we could be diligent in saving the money we currently pay to our landlord ($1400 per month) for future investments that would have a positive cash flow.

I am a newbie at analyzing and just upgraded to Pro so I can use calculators. Yay!! I am trying to analyze a duplex that I would be house hacking in. What is a good cash on cash return or is there something else I should be looking at? If I move into the duplex I could rent the other unit for $1800/month and rent other assets on the property (office space and rv/boat storage garage) for $500. I am currently paying $1400/month for an apartment that I would love to get out of and into the duplex if I can analyze this correctly. Any insights? Thanks!!