All Forum Posts by: Will Gaston

@Preston Donahue one time isn't going to do it in this market.

He's probably gotten dozens of these letters over the last few years if he owns more than one property.

Consistency is the key to standing out when contacting owners directly. 90% will send one or two letters. Be the 10% who don't give up.

@Anand S. In my experience, I think macro reasons are easy to point the finger at but there's usually some local, smaller issue at hand. 

This is completely a guess but I would imagine your local market is much more likely linked to the cause of booking issues than the Delta variant. (i.e. more competition is probably a bigger cause/threat).

@Buddy Platzke in my experience the most important questions to ask a lender are about the dealbreakers. (Full disclosure I typically do commercial/portfolio lending). If either you or they are going to say "no" to the loan then figure out that as quickly as possibly. Wasting time is a cardinal sin IMO.

What is a "hard no" to either you or the underwriter? 

-A hard no when I'm borrowing money is typically when a bank is looking for me to collateralize additional property or get my wife to sign for debt.

-A hard no from the lenders standpoint is typically anything about 80% LTV or below a debt service coverage of 1.25.

A dealbreaker for you might be having to put down more than 20%. One for them might be that they require sixty days of bank statements with seasoned funds.

@Sarah Esposito does a beach have sand?

That's essentially how common drinking is at student rental properties. I have not been sued for anything related to the behavior at a student rental house, although I did have a (dismissed) lawsuit over a tenant dispute 3-4 years ago.

In my experience, if you're a reasonable and responsible landlord I don't think that lawsuit risk is very high. Your mileage may vary.

@Sarah Esposito this thread may be helpful: Nearing 1,000 College Students: Here's What I've Learned

TLDR: My experience is it's a high profit/high management niche.

@Andy Brown Sort of. I usually have about 70-80 units total so I have enough revenue to hire an in-house manager. She manages all of my property and I like that better because I got full attention to it as opposed to some attention with a large PM firm.

I know this won't help you for right now but it will help you in the future. Here's what we require prior to tenants moving in: 

-Security deposit

-First/last month's rent

-Confirmation of water transfer

-Confirmation of electricity/gas transfer

-Renter's dec page

FWIW all of the above came from a lot of the same lessons that you are learning on your rental. It gets easier once you know what to do.

@Andy Brown I'm not sure what it's like in your market but in mine it would unfortunately be vacant until the next summer. Timing is incredibly crucial in my experience with student rentals. Mess it up and you'll have vacant property for a year...ask me how I know!

This thread may be helpful:

Nearing 1,000 College Students: Here's What I've Learned

The way that I did it was to package 2-5 properties and put them on one 80% LTV portfolio note. I would use all of that equity and go purchase more property.

Example:

-Property A is worth 100k and I owe 50k on it.

-Property B is worth 200k and I owe 100k on it.

I get one new commercial loan on both the properties for 240k (100k+200k = 300k x. 80% = 240k)

I use the 240k to pay off the 50k and 100k loans above. I use the remaining 90k to purchase Property C for 60k that needs 30k in rehab. Property C is now worth 120k. I go get a cash out 75-80% loan on that and then continue to repeat the process.

@Steve K. my personal experience with disruption has mostly come from technology, specifically Zillow, in the rental space.

Zillow has provided centralization of rental market information to the tenants. There is now one place for people to go to get basically all of the market information on pricing, location, pictures etc. It so much easier for them to get what they want. Certainly not the case in 2006 when I started. Many landlords were able to get away with pricing properties at a high price because it was so difficult to compare. Not so anymore.

This is great for the tenant/buyer. I see more trends going in the direction that will give the tenant or buyer more power and leverage in choosing housing in the future.