View Full Version : Starting a business... Anybody got advice?

07-03-2007, 09:23 PM
So a buddy and I both have some cash squirreled away, and we're both living in an area that's been hard-hit by the housing bubble. There are several foreclosed houses within a stone's throw of my house, and the banks are selling them on the cheap. It's right next to a local Christian college, so we feel pretty confident that we can keep them rented out. The area's actually developing, so in the long term we think we can sell them at a decent profit.

We've been tossing around the idea of starting an LLC, buying up some of these houses, renting them out to Bible College students, etc. I've almost started a business before (got hired to a dream job right before I submitted articles of incorporation) so I have a basic idea of what's involved.

Still, I'd love to hear some advice, especially from people who've gone through this kind of thing before. Anybody have any ideas?

07-04-2007, 11:01 AM
So do Bible College students live and pay more responsibly than other college students? Or are they just as irresponsible but hide behind the bible when it comes time to collect?

I ask that in all seriousness. Why isn't someone else all over these houses and why are they going back to the bank(s) in the first place?

I know someone who does similar but he refuses to rent to college students... even if they pay on time they trash the places (worse than other renters who trash the places too) he says. While everyone to a degree leaves work for him when they leave, college students are by far the worst in general.

Dunno... Something I'd think about though.


07-04-2007, 11:12 AM
:laugh: A fair question. College students are college students, but I'm comfortable renting to grad students. The grad program is growing pretty well.

It's a very old neighborhood... we bought the house from probate after the previous owner died of old age. At least two of the houses are similar (one couple just went to a home, another just left the house and moved to where his kids are).

07-04-2007, 11:25 AM
alright, I haven't gone through owning houses and renting 'em...but I do have experience in running/starting own business...
what type of information are you interested in? :)

07-05-2007, 02:31 AM
Not an expert by any means but this is an honest question.

Do you or your friend have knowledge of household repair and construction?

If you do you are well ahead of the game, if you don't you are really going to have to factor in how much you have to update, upkeep and maintain these houses.

I don't know Ohio's renting law's, Indiana's can be kind of stiff on the rentor, but if there are certain issues regarding household utility items that you don't fix or get fixed within a certain time frame you could lose that months rent and be unable to penalize your renter.

Just something to think about.

BTW, I have a friend of mine who is doing the exact same thing you are except he is doing it in Lafayette around Purdue.

07-05-2007, 02:43 AM
When I was in school at Purdue, the landlord for my house actually paid me to do renovations on the house in the summer.

I ripped up and re-sodded the lawn, did some wall repair/painting throughout the house and a bit of bathroom work. He got a better kept house, I got a nicer place to live and some cash.

Not all college students are evil. A lot are. But ... you just have to have a bit of a relationship.

07-05-2007, 08:11 AM
Don't have any more kids.

07-05-2007, 08:22 AM
My brother-in-law and I started a home improvement business back when I was in high school. It went very well and grew to the point that we actually had to shut it down or commit to it full time. I was about to start college at the time and he had taken a new position so we shut it down. We've recently started it back up again and I'm actually calling the lender today (as soon as 9am comes around) to get approved for a house we are buying and fixing up.

I don't know if I have any knowledge of buy/selling and renting out houses (as this is my first as well) but as for general business advice I'd say don't under estimate the paperwork and regulation hoop jumping. Consider everything/everyone as a potential ... "customer" I guess is the term (I don't mean try to sell/rent your stuff to everyone you meet, just don't close any doors that aren't closed on you). And remember that "being your own boss" often means "everyone is your boss".

07-05-2007, 09:04 AM
i second what Fool said about paperwork...be careful about it - and don't just take people's words for it...look over the material twice if needed...I got burned from it - so experience is talking right now :)

07-06-2007, 03:13 AM
I dont know what the student housing situation is there but here in Tempe it sucks. ASU provides very little housing options for upper-classmen and so rental-housing is pretty lucrative down here. There was actually a big fuss about it a year or two ago and I served on a temporay city comittee as a rep for student renters. There were a lot of complaints about un-kempt yards, noise, the typical stuff (though most of the complainers were old retired people with nothing better to do). I was renting a 4-bed house with some friends at the time and we never had any problems with neighbors but apparently a lot of other people did.

Anyways to get to the point, most of the blame ended up going on the landlords since most of the legitmate complaints centered on their responsibilites like maintenance and repairs and such.

Dont know if this helps or not.

07-06-2007, 01:23 PM
Aside from the specific advice you are getting about your project, keep in mind you will also be paying what amounts to double taxes in self-employment tax. It was a bit much. Be sure you have a very good accountant or you could get in some deep do-do.

07-07-2007, 10:36 AM
Aside from the specific advice you are getting about your project, keep in mind you will also be paying what amounts to double taxes in self-employment tax. It was a bit much. Be sure you have a very good accountant or you could get in some deep do-do.
Hmm, now this is interesting. Can you lay that out a little for me?

We'd plannned on not making a profit for the first two years... any surplus we had would get invested back into the business.

07-07-2007, 10:53 AM
I think you need to invest here in Indiana and I know of a representative that could help you immensly ;)

Try this. Buy and fix-up. Then sell to the parents of a student. The student lives there while renting the other br's to students who the kid would prolly have as roomies anyway. In this way the kid is living there free instead of paying for off-campus housing and mom and dad have a tax write-off. (talk to an accountant)

07-10-2007, 02:41 PM
All you got to do is tell people to ignore your business.....Then you will be richer than any of Btown's Vasoline ditributors...