First time investor question

Hi all. Just stumbled upon this resource and it looks promising. I am a first time investor looking to acquire a multi-family rental property along with another investor. We are looking at nearby college towns and believe that something as close to campus as possible will be our best bet. My question is, should we start small, i.e. a 4-8 unit property that we can put 20% down on and grow our net proceeds until we can purchase something larger, or should be looking at putting down less and trying to get something as large as possible? I'm very handy and there isn't much I can't repair so thinking I can probably do many/most repairs as long as we get something that is in relatively good shape. Thanks in advance for your help and hoping this site turns out to be a valuable resource. If there are other resources out there that you can point me to for good Q&A i'd be interested in those as well. We need some "mentors" to point us in the right direction. We both have MBA's and have run businesses before, but this is our first venture into real estate rental.

If you are a first-time investor, there are some things you need to consider when purchasing near campus. Your goals for a multi-family investment property should be:
1. Long-term residents to keep turnover costs low.
2. Applicants who can prove they pay their bills on time
3. Updates already in place will bring higher rent

Parents will be seeking housing for the students and they have high expectations and want to pay as little as possible. Students and faculty come and go quickly. Some properties in the college town I live in offer 9 month leases.

College students can be irresponsible when it comes to taking care of their units, causing higher maintenance issues and complaints and take time and money to deal with.

If you plan to rent to students, check with the college for their policy on off-campus housing. Some colleges restrict first-year students to on-campus only, etc.

If they can't walk or bike-it to campus, you're too far away. Be prepared to take co-signors for students. They have minimum income and credit.


Good luck!

Question: how long do you intend to hold your investment? I think that is what I would look at, the ability to make money on it. You can start small and keep those 4-8 units, but will that give you enough money to invest in other properties done the line in six months or a year? What will you need to do to get the property in shape in order to maximize rents, stabilize the property and make money?

Andy,

Is it safe to assume that since you are a "first-time investor", you might also be a first-time landlord?

And if that is the case, I would recommend starting smaller rather than larger. You may find the intricacies of dealing with tenants, regulations, and the "people" side of the business to be far more challenging than the repair/maintenance side of the business.

Dip your toes in the water for a year or two before you decide to jump all the way in.

Good luck!
Matt

Hi Andy,

With my landlord experience, it is really important to get good/responsible tenants. A good tenant not only keeps good care of your place, but will also tend to pay bills promptly.

Good luck with the venture!

Michael

I am a landlord and have exprience of keeping tenants. Alawys be aware and do all the procedure with legal help and never do any oral agreements with your tenants. I always do everything in wrting with the help of lawyers at www.mwfloridalaw.com .


All The Best..

Hello everyone, I'm also new to the real estate investment, but I don't have any idea about it. I am looking forward to knowing something more encouragement about it.