From Flipping to Student Housing: Beth Underhill’s Real Estate Journey

On her incredible path into the real estate market in a recent REsimpli Podcast episode, real estate investor Beth Underhill had a thought-provoking discussion with REsimpli founder Sharad Mehta. Their conversation mostly addressed Beth’s move from residential to commercial real estate as well as the student housing niche market.

In 2018 Beth started her real estate adventure when her husband came across an advertisement on property flips. Their enthusiasm piqued by this revelation drove them to go to further seminars and finally join the real estate business entirely.

Beth’s career in commercial real estate—more especially, multifamily syndication—was sparked by an eye-opening experience. She first thought this industry had great promise. Through careful networking and usage of Facebook groups and real estate events, Beth attracted like-minded partners in the process of creating a new company targeted at different assets. Their partnership brought Beth into the student housing industry and started a new phase of her real estate career. Their initial purchase was a student apartment in Wichita, Kansas; further smart acquisitions were made in Tennessee and Georgia.

Beth underlined throughout the discussion the specific advantages of buying student housing, including parent guarantees and stability given by 12-month leases. Beth notes outstanding returns including an 8% cash-on-demand, a 2x equity multiple, and a minimum of 18% internal rate of return (IRR); these elements help to create a stable and profitable investment. Driven by flexibility and networking, her measured approach in the real estate market is a great model for both new and experienced investors.

Particularly in relation to elite colleges where demand for lodging is still strong, the conversation also covered the nuances and benefits of the student housing market. Beth’s study of equity multiples, financing sources, and management issues of student housing will be much appreciated by anybody thinking about this road in real estate.

Looking forward, Beth said she wanted to grow her portfolio and expertise and planned to enter development over the next three to five years. Many investors believe this sequence of purchases to be a reasonable path that lets them generate money from the bottom up.

Especially in the student housing market, this REsimpli Podcast episode provides ample information for everyone interested in real estate investment. It also reminds us of the need to maintain a reasonable work-life balance and personal growth.

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Transcript:

Sharad Mehta  0:00  

Any questions, anything that in particular you want to talk about, not talk about,

Beth Underhill  0:09  

um, I don’t know, yeah, I mean, I’m good. I’m good all the way around to talk about anything and everything. Um, do you typically run a particular Do you have a particular format that you usually work off of?

Sharad Mehta  0:25  

I mean, I start off with just a little background about yourself. Where do you live? What kind of investing do you do? How long you’ve been investing for? And then from there, it’s like conversational styles. I’ll ask you particular questions about kind of based on how you’re answering.

Beth Underhill  0:41  

Okay, that’s fine. Sounds good,

Sharad Mehta  0:44  

cool. All right.

Beth Underhill  0:45  

Now, is this going to be just don’t voice only, or is it video, too?

Sharad Mehta  0:50  

Video and voice Okay, okay, cool. All right, let me just make sure it’s recording. Yep. Okay, perfect. Okay. And Beth Underhill, right. All right, cool. All right, set up, right. We can get started. 321, hey guys. This is Sharad with REsimpli, host of the REsimpli podcast, bringing you a very special guest, Beth Underhill on this podcast. Beth, welcome to the podcast. Thank you so much for being a guest on the podcast. How are you

Beth Underhill  1:26  

I am doing well. Thank you so much for having me. Yeah, absolutely our

Sharad Mehta  1:30  

pleasure. But tell us a bit about yourself. Where do you live? What kind of investing do you do, or your real estate background?

Beth Underhill  1:39  

Sure, absolutely so I live in Cincinnati, Ohio with my husband, my 20 year old daughter, who attends the University of Kentucky, and four dogs.

Sharad Mehta  1:51  

Yeah, busy houses.

Beth Underhill  1:52  

What’s that

Sharad Mehta  1:54  

busy household?

Beth Underhill  1:55  

Oh, it is a busy household. The dogs keep us on our toes all the time, but we’ve always had a ton of dogs. My husband and I have had 12 dogs between us since we’ve been together for 25 years. So anyway, so I started my real estate investing career or journey, I should say, in 2018 my husband, who doesn’t always necessarily get the the best sleep. Happen to be up in the middle of the night listening to an infomercial about fixing and flipping single family homes, and he signed us up for a one day wonder event, as I call it, that we ended up attending in September of 2018 and that led to a three day event that led to a five day bus tour out in San Diego, California. We came home, we immediately started searching for houses to flip, and partnered up with some investors, and that’s what really got us into real estate. And then fast forward to 2020 and covid hits, right? My husband and I, we own an outdoor living space construction company, and our business went through the roof. People were, I mean, we never had so many leads for outdoor living spaces. It was just absolutely crazy. Everyone knew that, hey, you know what? If I’m going to be able to social distance, or if I want to be around family and friends, I need some place outdoors that I can socialize with them. So our business went nuts, and that’s when we decided to kind of pull the reins back on the fixing and flipping, because we were just handling too much at that time. And that’s when I pivoted, actually, into commercial real estate. So I attended an event on multifamily syndication, and my eyes were, of course, completely opened up to the opportunity or the possibilities that come along with syndicating a deal and being able to have a slice of a million dollar property or a million dollar plus property, I should say, shortly after that, I just started doing some networking with people through Facebook, different groups and so forth. And I happened to meet a group of gentlemen who were forming a new entity, and they were going to take down multifamily properties, but they needed some help, someone who could help with marketing and investor relations. So I offered my services to be able to do that. And that turned into ownership of the company. We purchased our first property within, oh, I think it was like seven months after we formed, and it was 70 units in Wichita, Kansas. And then we pivoted, because we brought somebody onto the team who had 17 plus years in student housing experience, we pivoted into the student housing niche of multifamily, and so we’ve been acquiring student housing properties ever since,

Sharad Mehta  4:51  

wow, you’ve been pretty busy since 2018 Yeah, yep, that’s and so you’re not doing any residential it’s all. Student Housing now,

Beth Underhill  5:01  

student housing now, we just have that one multifamily property and then four student housing properties and searching for more all the time. But no, I am, I am not involved in any residential projects.

Sharad Mehta  5:18  

And are you? What are you buying these properties,

Beth Underhill  5:21  

primarily in the southeast. So we have one property that is in Tennessee, just outside of Nashville, and then three that are in Georgia.

Sharad Mehta  5:31  

Perfect. It’s It’s so interesting that you’re one of the very few people that I’ve heard a success story from actually watching the infomercial. Did you guys actually have any interest in real estate? Or it was really just your husband happened to watch an infomercial about flipping he’s like, Hey, let’s just go attend this seminar. Or you guys had been thinking about real estate, so you would? You do? You still have the construction company we do, we do okay, and that that’s what you guys were doing full time, the outdoor construction company, correct? And then did you always have an interest in real estate investing, or just happen to really watch the information and it was so good that you had to attend? Well,

Beth Underhill  6:16  

truth be told, so you know, my husband and I actually both houses that we’ve lived in, we purchased through creative financing. So we always, you know, had a level of interest. And back in, I think it was around 2005 or so, we had looked at purchasing a franchise, a real estate franchise, and called, help you sell. And the franchise model was such that they would help buyers to market their properties and and put the property on the MLS for just a flat fee, so that the buyer could save on the buyer side and not actually have to pay the commission to a realtor, and then would only have to pay the Well, I’m sorry, so the seller, seller would only have to, I’m sorry about that. The seller would be able to list the property on their platform and on the MLS, and they would not have to pay the seller’s commission, but only just the buyer’s commission. So we had considered that, and I started going down the path of getting my real estate license, and then I’m not sure exactly like what happened, but life happened clearly, because I still don’t recall why we abandoned the whole idea, but we did so, so yeah, that was something that we just walked away From now, throughout our entire life of owning our outdoor construction company, we had always talked about purchasing a house during the winter months to actually bring our crew inside, as opposed to having them work outdoors and have them work indoors in order to Not subject them to the cold temperatures. And we thought, oh gosh, if we could find a house and have them flip a house somewhere between the end of December all the way through about mid February, that would be ideal. Because really, those are, those are the times that we experience the coldest temperatures here in Cincinnati. Otherwise, I mean, we could almost work outdoors almost 12 months out of the year. But we were never able to find a house a and b. We were always too busy that it was hard to take our guys and say, Okay, we’re going to take a crew, put them inside when we always had business. And then we just managed to figure out how to actually construct our outdoor living spaces. We would build tents with heaters underneath and so forth. And that seemed to work for our guys. And so we we pretty much abandoned that idea as well. So when the opportunity came around, when he saw this, this infomercial, he thought, You know what? Like, you know, we love our outdoor construction business, but we also knew that this was a really great opportunity and a way for us to take our skills that we, you know, had worked so dearly on outdoors, and utilize those and put them to work inside so well. It opened up another avenue of of opportunity for us. It also added another layer of, right, you know, jobs and work and so forth on an existing busy schedule already. So it just didn’t make a whole lot of sense as we started kind of going through it. I mean, we both were, we’re just fried, you know, and, and so we decided, you know, really, once covid hit. I mean, well, I shouldn’t say we decided, but once covid hit, it made the decision for us. We knew we knew we had to focus on our bread and butter and what we were experts at, as opposed to something that we were, you know, sort of okay, and yeah, thus I made the pivot into the commercial space.

Sharad Mehta  9:55  

Got it, but and then in the commercial space. So you. Say, did you start going to local res? Is that how you found this network of investor? How did you go about finding these investors that you’re currently working with? Sure,

Beth Underhill  10:08  

so I started networking on Facebook. Actually joined some Facebook groups.

Sharad Mehta  10:13  

Started like local Cincinnati Facebook group, or like, nationwide, yeah, nationwide

Beth Underhill  10:17  

Facebook groups. Nationwide Facebook groups, yeah, ironically, it’s funny, because the three partners who started the company, one’s from New York, one’s in South Carolina, and the other one is in Florida. And that just is, you know, the power of networking through social media, which is, which is fantastic. But I did, I did join our local REIA, and I started meeting, you know, local real estate investors as well. But I ended up what happened was I, I had signed up for an event in Orlando, a rod Kalief event. I don’t know if you’ve heard of rod Khalif or not, but Okay, so I signed up for one of his events, and that is where I met the three of them, in person. I had already spoken with one of them on the phone several times and and I told him, I pinged him, and I said, Hey, I know you’re in Florida and I’m going to be attending Radcliffe’s event. You know, are you planning to attend that? And I was kind of, you know, I was green to the to the business, the industry, and so forth. And I thought everybody attended these events, right? I didn’t know like that. There’s so many events that are held all the time, and you can’t, you can’t hit them all. But he said, Hey, you know what? I’ll plan to meet you there. I’ll go up and meet you there. Well, little did he know that the other two partners that you know, they had been talking and so forth that they were planning to be at that same event. So there happened to be one day when the three of them were together, they were having lunch. I happened to walk by the table, and the one partner said, Hey, Beth, come over here. I want you to meet. I want you to meet the other two partners, and let’s sit down and all have lunch together. So we had lunch together. And from there, they really liked me. I liked them. And they said, Yeah, Beth, we, we just need some help. And, you know, ironically, you know, they were, you know, three gentlemen, and I think they were looking for, you know, that kind of, I don’t want to say that female side of things, but also that person who, you know, I was like, I love talking to investors. I love dealing with back office stuff. I love dealing, you know, all the things that they did not want to do, they’re like, We don’t, we don’t, you know, we don’t like that. And I said, Great. I said, I’ll be part of this. So. So anyway, so we started off the four of us, and then slowly but surely, we added two more team members to to our organization, and one in particular happened to be the gentleman who’s got the 17 plus years experience in student housing, so he’s guided us fantastic through that particular niche. It’s been a wonderful experience, something that I didn’t think I was really, you know, going to gravitate towards. However, now having having gone through the experience with my daughter now three years, you know, in college it I understand the power of student housing and and I’m in love with, I’m in love with that niche.

Sharad Mehta  13:12  

Yeah, what’s, what’s special about student housing? There’s, you know, just the natural progression seems to be. Investors are doing single family like wholesaling, then they do fix and flip, then they go to smaller multi units, and then eventually they go into bigger multi unit, like student housing. Is a very, you know, one niche that not many investors get into, and this was after four of you formed a partnership to buy multi units, and you ended up buying a 70 unit in Kansas, right? And then you decided to pivot to student housing. What was it about student housing that you guys decided it made better sense? And then, when you already bought a 70 unit property,

Beth Underhill  13:58  

you know, I really it was an opportunity that was presented to us. It was an off market opportunity that the gentleman who had the partner who had the 17 plus years experience brought to the team, and after underwriting it, I mean this, it was a great deal, cash flowing deal, 100% pre leased year over year over year, and the ability to actually push rents more so than where they were at, because the developer, we actually purchased this from a developer. So the developer came in, developed the property, leased up, leased up for several years, and then decided that they wanted to sell. So we were able to take this over with meat on the bone still. And, you know, when you don’t actually have to worry about capital expenditures, you know, huge renovations, and you you’ve got a property that has been, you know, has a history of being 100% leased. Um, and, you know, you can push market rents. It. It was, it was a no brainer, and, you know, and we were assuming, and then icing on cake, we were assuming a loan at 3.62% so, yeah, so there was, there are a lot of positives surrounding it,

Sharad Mehta  15:18  

right? And how has like in terms of ROI, how is student housing different from large multi units, like 70 100 units versus a student housing and the student housing project that you purchased the first one, how many units was that?

Beth Underhill  15:38  

So that one is 126 beds. So there are, yeah, so student housing goes by the bed. So it’s interesting, because you have multi family that’s by the unit, you have hotels that are by the keys, and then student housing is is by the bed. So this one has 126 beds, but it’s got 2828 units. Okay, so the 28 units are comprised of, you know, four beds, five beds, six beds, and so forth. So there’s just this nice combination. And these were all like cottage style homes. Actually, that’s what this this particular, this particular property was built with these cottage style homes, and they’ve got these wonderful porches. Students love to sit on them, hang out and so forth. But each student actually within the house has their own bedroom, has their own bathroom, and then there’s a common area with living space, another half bath, and then a full kitchen. So this is just like, like, it’s like, your own like, it’s like walking into your own house is essentially what it is, because they’re two story and then just in this nice community that’s beautifully landscaped and so forth. So, so, yeah, so student housing by the bed, that’s one of the big differences. You know, student housing, with student housing, most people think that the leases only run for the academic year, but they’re actually 12 month leases. So you’re signing a 12 month lease, so you’re, you know, just like a lease for a multifamily, you’re getting that full year. And that’s a misconception by many, many people.

Sharad Mehta  17:17  

That’s what I always thought it was for the school year only. Yeah,

Beth Underhill  17:22  

no, it’s actually for 12 months. So even if you’re not going to be there for three months, you’re still going to pay rent. So so that’s a that’s obviously a bonus. And then on top of that, the parents, all the parents, have to guarantee the leases, or there’s a guarantor, I should say. So if it may be some, you know, could be a relative or whatnot, but, but there is a guarantor on those leases, above and beyond just the students themselves, and that is always a plus for us, because if, hypothetically, Susie damages, you know, a wall mom and dad’s credit card or the guarantors credit card is going to get swiped to take care of that. And we are finding most of the or not most, but all of the properties that we purchase are Class A properties. And we do find that the students that are living in these Class A properties, because they’re newer, they tend to take care of them. And so we’ve had minimal, minimal damage over the life of what we’ve owned them so far.

Sharad Mehta  18:24  

Interesting. Do you mind walking through numbers of any of the properties that you purchase like, what does I’m very curious about. What is an ROI on a student housing building looks like versus, you know, a typical multi family. And I would imagine, because you’re renting it out by bet you’re getting higher than market rent on these properties. Is that fair to say?

Beth Underhill  18:50  

Um, well, no, not necessarily. We’re getting market rent relative to the student housing market. So, so, so, yeah, so other student housing, other purpose built, student housing, properties within the area, you know, we look to be, you know, achieving that same market rent that they’re achieving, as long as, of course, from an amenity standpoint, as long as, you know, we’re comparing apples to apples. We don’t want to compare apples to oranges. Not all of our properties, they’re not highly amenitized. You know, there’s student housing, properties that have, you know, pools that have movie theaters that have all kinds of bells and whistles. The ones that we have specifically do not have bells and whistles. I would say the most highly amenitized one that we have is one in Athens, Georgia, that has, it’s, it’s a mixture of student housing, and it also has some commercial, a commercial component to it. So we have, we’ve got people that are leasing that, leasing for a bar, leasing for a froze a shop, you know, a couple of other retail. Type establishment, a gym and whatnot. So so, you know, it just all depends on the market and where we’re at. But we’re not, yeah. We’re not leasing market to another multi family property. It’s yeah, but yeah, returns done on student housing properties. I mean, we, we shoot for, this is what we shoot for all the time. An 8% cash on cash, a 2x equity multiple minimum, and then a minimum of an 18% IRR. So those are our deal metrics that all of our deals right now that we currently are in have met those minimums, and some of them have maybe slightly higher, higher IRRs or slightly higher 2x equity multiples. I think our highest 2x or our highest equity multiple is maybe like a 2.2 or so, but, yeah, so, I mean, that’s what we shoot for. And of course, you know, the business plan is to hold on to these properties for five years and maybe do some sort of capital event somewhere around year three, you know. And the goal, of course, is, you know, finance out the investors as soon as possible, make sure that you return, return their monies, return, you know, get them their return of capital and return on capital, because we want them to invest with us again. So as long as we’re we’re executing the business plan now. We’ve had a lot of great success. The three properties that we have actually leased up for this year, we actually average over 9% rent growth with all three properties. The fourth property is we’re closing on that shortly. But yes, with the three ones that we had the ability to lease up, going into this year, over 9% rent growth. So I think it averaged somewhere around 9.32

Sharad Mehta  21:50  

That’s amazing. Yeah, what’s the what’s the equity multiple? I’ve never heard that. Oh,

Beth Underhill  21:56  

okay, so equity multiple is essentially what it means is, if it’s a 2x equity multiple, it means that if you invested $100,000 you’re gonna double your money, so you’re gonna get your $100,000 back, and then you’re gonna get $100,000 on top of that. So that’s what we shoot for. Is is basically doubling your money an equity multiple two could be three

Sharad Mehta  22:19  

in what time period, five years, five years. Okay, interesting. Wow, that’s that’s incredible return. And where do you find these properties? I know the first one you found off market through the gentleman that you had hired. What about the other three? Two that you’ve closed and one that you’re closing on? Sure,

Beth Underhill  22:36  

same pipeline, he just has. He has these amazing relationships. He worked for both dovetail and landmark properties, and they are some of the largest student housing property management companies and developers in the country. So in addition to that, you know, he just created all kinds of relationships within that, that space, and not just property management, but also brokers and so. So this pipeline has been continual for us, and it’s, it’s just really been, it’s been a blessing, because there’s, there’s been so many positives, right? So I told you about the one property with 3.62% are 252 bed student housing property just outside of Nashville. We assume that with a 4.38% loan, and that’s good until the end, I think it’s good until 2030 something like that. So so you know, we’re just getting a lot of really positive flow of opportunities. And really for us, sometimes it’s, it’s not about it’s not about finding the deals. It’s just about sourcing the capital. When it’s all said and done,

Sharad Mehta  23:51  

is that the biggest challenge you guys have is sourcing the capital, and if you have the capital, then you have other properties that you can buy. Oh, absolutely,

Beth Underhill  23:58  

absolutely. And we’re working on strategic relationships, partnerships and so forth, with capital allocators, family offices, you know, family offices specifically that, like the student housing niche, and that’s, you know, just something that you know is, is over time. You know, it takes, it takes time to cultivate those relationships, but, but that’s what we’re actively pursuing. I mean, we love our retail investors. I mean, they’re great and and they’ve been, you know, just so excited about our properties, and what’s been going on with the properties, but, but ultimately, when it’s when it’s all said and done, you know, the more capital that we have to be able to take down some of these amazing opportunities coming our way, the easier it is, right? And then,

Sharad Mehta  24:49  

with the student housing that you have 100% OCS, the one, the first project that you were talking about, the one that you bought from a builder, do you have any vacancy in? Or they’re always 100% occupied.

Beth Underhill  25:03  

So if they sign a lease agreement for 12 months, I mean, technically, yes, we’re 100% occupied, and there is no vacancy. Now that’s not to say that somebody doesn’t move out, you know, maybe after the fall semester, for whatever reason, and maybe they decide to move home or or they have they drop out of school, which is fine, but that’s still that. Lease is still in place, and they’re still responsible for it now if they decide to break the lease, and obviously there’s legal ramifications that that surround that, and we can actively look for someone else to take that space, but, but the fact that they’re 100% pre leased, it means that, yes, for an entire year, we can expect to have the same amount of of a rental income every single month. And that’s, you know, that’s, of course, unlike multifamily, right, where it shifts from month to month, simply because you have leases that come due and leases that start all at different points and periods and so forth and so some some months you might have little bit higher cash flows, whereas some months might be a little bit lower. But that’s the nice thing about the student housing is we know exactly what’s coming in every single month,

Sharad Mehta  26:21  

right? That’s, that’s amazing. So since we’re close to the start of a new school year, so your leases go from like August to July or September to August. Is that how it’s it’s set up, August to July, August to July, and then people are moving out. And then, you know, you would have people sign up 12 month leave, but they’re not necessarily staying in these units for 12 months. You know, they might move out at the end of the spring semester, so you have time to go in and get the units ready for the next set of students to come in.

Beth Underhill  26:52  

Well, as long as they aren’t renting it out to anyone. Yes, we can do that. But there’s what’s called this period, and it’s generally this period that begins kind of the last couple of weeks of July into the first couple of weeks of August, and it’s called turn and that is when, like we are able to as long as someone so if someone has renewed their lease. So let’s say they were a sophomore last year and they’re renewing their lease. They’re going to be a junior this year, and they’re renewing it. They’re just going to stay put, so we don’t have to worry about doing anything. But those who are physically moving out will have to move out by July. I’m just going to use an arbitrary date, July 20, and they’re gone by July 20, which allows us, you know, within a three, three and a half, no more than four week window. I’m going to say it’s probably more like three week window to go in and do whatever is necessary, if it’s painting, if it’s, you know, replacing any furniture, maybe a refrigerator needs to be repaired or replaced, you know, things along those lines, you know. But all of that is known ahead of time. So the property management team, what they do is they prepare for this, right? So they’ve already done, you know, kind of a sweep of the actual property itself, and they’ve made a list, hey, we need to order five new couches. We need to order, you know, 10 new refrigerators. And of course, I’m making up numbers, right? But they don’t go through they’ll figure out exactly what needs to be done. And then within this window, you know, it’s all hands on board, right? All hands on deck to just go get it done, painting, replacing, you name it in, just getting it ready for any incoming students to to move in.

Sharad Mehta  28:37  

I love that. I love that business model, like you have 12 months of lease, and then you for every building, three that you own and one that you have coming, I would imagine that you already have, like, two, three months, you know, ahead of time, you have students applying for these units. And then you have, you know, if someone is moving out, you already have interest in those vacant units. So you would potentially have, you know, 100% rent coming in. They may or may not be occupied, but you have rent guarantee coming in. I love that, and I love the I just, I never thought of it, but it’s just, it obviously makes sense that all your leases start and then at the same time, so you don’t have and then you have this crunch time off mid July to mid August, where you just need to turn over the unit. But then, you know, okay, this is, like, we need all hands on deck. And then outside of that, for the most are pretty smooth sailing. You know, I’m sure there’s, like, tons of issues that you run into. But sure, I mean,

Beth Underhill  29:35  

obviously there’s going to be things that come up. But the nice thing about it is that, you know, like, for instance, the turn, like all of that’s done at one time. So it’s not where, you know, if in September you have five units coming, coming due, or coming becoming vacant, and you know, gotta get your maintenance guy ready to go. And, hey, we need paint and so forth. And then there’s 10 units in in October, and 12 units in November. And. Three in December. You know, you can just plan for this one period of time, and then it’s done in one, one fell swoop. Now I

Sharad Mehta  30:08  

will say this about the discount also, you know, because I said, and also get bulk pricing because you’re buying everything at one at one point, absolutely

Beth Underhill  30:17  

right. Now, I will say this about leasing, so, you know, so turn is, is, is over and done with. And then, you know, the students come back. And no sooner did those students come back, we’re into September, we’re already starting to lease for the following year. I mean, that’s just how quickly the kids actually have to think about where they’re going to actually live the following year. So it’s very interesting, like my daughter, for instance. So her first year she was on campus in a dorm. Second year, she was on campus in her sorority house, and now this year, she’s actually going to be living off campus in what’s called a legacy house. And this particular legacy house her sorority, the sorority that she’s involved with is called Chi Omega. And so this particular house, it’s like anybody who’s from Chi Omega, like, you know, kind of transitions there. And so every single year, you know, it’s sorority girls from Chi Omega who end up living in this off campus house. Well, this off campus house only has five bedrooms, so only five girls, of course, are going to live there. But, but they had to, you know, sign their lease agreement. I think we signed it like last October, November. I mean, she was already this year in plans for this year coming up, yes, so that’s how far in advance. And the same thing with some of our student housing properties. For instance, the the very first one that I told you about that has the cottage style homes. It’s a legacy property as well, too. So there’s a lot of students who are part of the Greek community. And so, you know, if you have in, in like, two or three of these cottage style homes, you have, I don’t know, maybe 16 girls from one, one particular sorority, you know, they’ll tell, you know, the the freshman and sophomore, hey, this is where we live, and you ought to think about living here next year and and so, you know, it just kind of like, it’s word of mouth transitions that way, and it makes our lives really quite easy from the standpoint of leasing them up. So, so some of these properties are leased up 100% by, you know, the latest April. So the April going into, you know that next school year, which is nice, because again, you just, you kind of push and work towards getting at least up and and then you just focus on the turn, and then you, you just start the cycle all over again.

Sharad Mehta  32:43  

Yeah, that’s, that’s amazing. Yeah, I never, I just, in my mind, I thought dealing with student housing, you know, dealing with like, these kids who have gained, like, independence, and then it would be pretty rough managing those units. But it also, I mean, I would imagine it depends on the type of the class of property that you’re buying. Right Class A property versus, like, you know, a lower class property would have a different set of students, you know, maybe or and then also, the age of the building also has something to do with it, where you have not many deferred maintenance. And are these buildings that you’re buying? Are they within walking distance? Is that something you look for, that they’re within walking distance or a short bike ride, or, you know, like, How far would these properties be from the actual campus?

Beth Underhill  33:35  

Yep, great question. We like to find properties that are as close to campus as possible. So one of our properties is point three miles away, which means it’s across the street. And so you literally, like there’s a street in between our property and then the property line of the campus. And so that’s how close that one is. I think our furthest one is less, just slightly less than a mile away. Well, you can still walk, yeah, well, and it’s in Georgia, right? So you’re talking about, you know, being up in Minnesota, where it might be, you know, cold, but even still, less than a mile away in 30 degree temperature is, yeah,

Sharad Mehta  34:21  

absolutely. Especially college kids, they don’t feel Yeah. They don’t care, yeah. I love that. This is Yeah. It’s I, I’m so glad I had this conversation with you. I had no idea about the student housing. I just bought my first I, you know, bought my first 11 unit property three, four months ago. We’re finishing the rehab on it, but up until then, and since then, all we’ve done is like, single family, you know, one to four unit, which we buy flip. And then I was talking to a friend of mine that I bought as a partnership with him, and we were talking about looking at other, bigger property. Used to buy, and it just in my mind, the natural progression was buying a multi unit. But having this conversation with you, it opened my eye to student housing, just the fact that you’re renting all your units, your leases all start and end at the same time, and then you have this such high demand for these properties that some of them you’re renting, signing leases one year before the tenants are going to move in. I think that’s an incredible business model. And you know, you know, there’s always going to be a demand for these properties, and then you have a guarantor. So I absolutely love that business model. Yep. What’s your coach? Go ahead.

Beth Underhill  35:39  

Oh no. I was just gonna say, I mean, that’s why, that’s why we love it.

Sharad Mehta  35:42  

I’m curious. The person that you hired, the gentleman that you hired, who’s helped you buy, you know, get these four properties, did you hire that person with the intention of going into student housing, or it just, it was just a coincidence that you ended up hiring this person, and that opened your eye towards student housing investment.

Beth Underhill  36:02  

So, you know, I think you know, he, he had a relationship with one of the other partners, one of the original partners, and I think that just through conversing, it was discussed that, you know, this is, you know, what he could bring to the table opportunities within the student housing sector. And so we had, had looked at that sector thinking, you know, okay, you know, had no idea how viable it actually is. And of course, too, I mean, one thing I will say, you know, there’s, there’s been, you know, especially post covid. You know, universities have have fluctuated in terms of enrollment. And one of the things that we look for is, of course, you know, universities, or top tier colleges, where there’s a draw, there’s an attraction. So like the University of Georgia is, you know, where we have one of our properties, right? University of Georgia has been on everyone’s radar, especially over the last few years, with respect to football, they’ve been this football powerhouse. And, you know, sometimes kids just decide that they want to go to a college, just because they want to root for, you know, the athletic programs and so forth. They’re, you know, I’m in Ohio, right? So Ohio State is a big drop. People just want to be a buckeye. They’ve grown up, you know, hearing about Ohio State, maybe they’ve been rooting for the buckeyes, you know, with football and whatever else. And so they just want to go, because they want to be part of something. And so, so, you know, we look for those top tier universities that have that draw that we know enrollment is not going to fluctuate. It might fluctuate when you’ve got an enrollment of, you know, 30,000 that fluctuates by by two to 300 that’s one thing you know. But when you have an enrollment of 2000 that fluctuates by that that’s a bigger deal. So, you know, making sure that you know the markets that you’re in is is obviously essential and key to ensuring that you are going to guarantee yourself that 100% or close to 100% occupancy.

Sharad Mehta  38:11  

So now that you’re doing student housing, just looking at, you know, your future goals, 235, years down the road is that kind of what you want to double down on? Are you looking at other investment asset classes to invest in? Or you’re like, Hey, student housing is what’s working for us. Can I just double down and just keep buying more properties? What’s your like next? Three to five year goal?

Beth Underhill  38:35  

Three to five years development. That’s where I would I would like to be. And then some of the team members, we all want to be in development. So, yeah, maybe, maybe. But, you know, I have, we all have had some development opportunities presented to us, and we’re evaluating what makes sense. So it could be single family homes. It could be townhomes, it could be student housing, retail. We haven’t quite figured out just where that development’s going to be, but development is definitely, I would say, the three to five year goal. Interesting.

Sharad Mehta  39:14  

I love that. Yeah, that’s what it seems like. A lot of investor want to do? Yeah, the progression is, like, to develop, you know, create, like, take just dirt and just create this amazing, beautiful property. But it’s single family, multi unit or whatnot. So, yeah, that’s that’s amazing that. Thank you so much for this, for your time. This has been absolutely incredible. Just couple of last questions. You’re super busy. You have your own outdoor construction, business, student housing that you’re doing, and then you’re looking at doing some more development. You have four dogs. What do you do? For fun?

Beth Underhill  39:52  

Well, for fun, I love to play golf, travel when I can, and then I am a power lifter. So I have been, I’ve just been involved in that sport for the last six and a half years now, and I compete on a national and international level. So cool. Yeah. So, so I guess you could say that’s fun, but you know, it kind of serves a couple different purposes. Number one, it keeps me accountable in the gym, so I like that. And then it’s also just an avenue that, you know, I’m 55 years old, so it gives me an opportunity to just participate in something competitively and and I just, I just enjoy it. I’ve always loved the power of the barbell. I channel a lot of emotion and energy into the barbell. So it’s, it’s served me really well over the last six and a half years. It’s amazing.

Sharad Mehta  40:49  

Yeah, I started, I’ve been going to F 45 for last like six months. Absolutely love it. It’s like the best 45 minutes of my day. I don’t go every day, but it just, it does the time, flies by, flies by I do weightlifting, I do resistance exercise, and it makes such a difference. You know, just more mentally, it gives you so much clarity just to get away. So I love that. All right, next question, what’s the one book that’s had the biggest impact in your life? It could be a business book, it could be a personal book, or it could be one of each

Beth Underhill  41:24  

um, I think it would have to be a book called um, prosperity, prosperity and prosperity. What’s the book? I believe it’s by Russell. Russell Wilson, if I’m not mistaken, football player, no, okay, but it, you know, it just talks. It’s so much about the power of of you know, how you think and prosperity in your life, not just monetarily, but just prosperity in terms of what you think, what you believe, who you are, how you interact with other people, just how you view life in general. So it’s, it’s, it’s faith based, but I do, I go back to it all the time, and probably, like once a quarter, we’ll re listen to, okay,

Sharad Mehta  42:27  

awesome. Thanks for that. And final question, if you could spend a day with anyone, dead or alive, who would you want to spend the day with, and why

Beth Underhill  42:40  

dead or alive? Oh, that’s a very tricky question. That is a very tricky question. I think at this point. I mean, I would love to spend, obviously, I would love to spend another day with my parents. But that aside, I would say Barbara Corcoran. I just absolutely loved her on Shark Tank. We, I mean, you know, in our household, we’ve been huge fans of Shark Tank. And at first, you know, I always, you know, as I kind of would listen to all the different sharks and so forth, you know, like I went through my stages of gravitating towards, you know, certain sharks for certain reasons. You know, you know, Mark Cuban’s got this bigger than life personality. It’s awesome, you know, Mr. Wonderful. I mean, he just, yeah, I love how everyone makes fun of him and so forth. But I think the fact that Barbara had this, you know, real estate experience, you know, took that $1,000 as she always talks about, and turned it into, you know, millions and millions. You know, to me that’s, that’s just a story. I just, it’s the rags to riches story. It’s something that, you know, I feel like, okay, if she can do it, then, then why not me? And so, you know, I would love to spend a day with her, just picking her brain. I think she’s amazing. And I think the fact that she’s in real estate is just inspiring, absolutely,

Sharad Mehta  44:03  

and she seems like a very open person to talk about, like, whatever she Yeah, I read her book when I saw in shock that book, absolutely incredible story she has, yeah, I bet. And

Beth Underhill  44:16  

she’s totally relatable too. Yeah. She just seems like someone that you could sit down, have a glass of wine with a cup of coffee, you know, just have have fun at the same time. Exactly,

Sharad Mehta  44:26  

yeah, 100% but absolutely incredible. Thank you so much for your time. It’s been, it’s been a very, very, you know, resourceful interview for me, for my personal reasons, like I’m really curious about student housing. So thank you for that. If someone who’s listening to this or watching this wants to connect with you, learn a little bit more about your journey. What’s the best way for them to do that?

Beth Underhill  44:49  

Sure they can reach out to me at Beth, at investing with beth.com they can follow me on Instagram. My handle there is at investing. With Beth, same on Tiktok LinkedIn. Beth, januzi Underhill, we can connect there. And yeah, guess that’s about it. Or you can text me, 513-470-1078,

Sharad Mehta  45:12  

in fact, we’ll put links to all of these in the show notes. Beth, thank you again. So much for coming on the podcast. Thank you.

Beth Underhill  45:18  

Thank you for having me. Thanks. You.