All Forum Posts by: Chris London

@Gopichand N.

Raleigh is the state capital with a lot of different sections as well as several bedroom communities that are hot investment areas right now. According to WRAL, Raleigh is expected to appreciate in 2022.

• Raleigh inside the beltline (I-440/I-40): This is the 1st way most people reference Raleigh. You are either looking inside the beltline or outside the beltline. Inside the Beltline, Raleigh gets divided again. North Raleigh (high end & expensive), Downtown (constant development & expensive), NC State (Student housing), Southeast (lower appreciation, lower cost, and slow to gentrify).
• Examples: 
• West Raleigh (close to NC State): 1300 Kent Rd Apt C, Raleigh 27606
• North Raleigh: 302 Georgetown Rd. 27608
• Downtown: 707 E Martin St. 27601
• Southeast: 571 Rose Ln 27610
• Raleigh Bedroom Communities (to the South & East): Many investors prefer the cost structure of buying in some of Raleigh's developing bedroom communities. Knightdale, Clayton, Garner, Wendell, etc. 
• Examples:
• Knightdale: 100 Princess Cres, 27545
• Clayton: 509 Camel St 27520
• Garner: 904 Phillip St 27529
• Wendell: 541 N Pine St. 27591

@Pat Lulewicz I'm currently using Erie however had a similar rate through Allstate.

Currently, for a similar priced property I own in the same zip code, I'm paying a premium of $458/year.

-Landlord policy for individual and not an LLC.

-$5K deductible (high deductible made a big diff for me in the annual premium)

-DM me and I'll be happy to tell you the liability and medical payments coverage.

-They did require I replace the roof at 20 years and trim back some trees, however.

@Annamalai Karthik

204 Sunshine Crest Apex: 

PITI: $1557/mo (20% down at 4% & $600/yr insurance).

5% capex, 5% maint, 5% vacancy: $300

10% prop mgnt: $200

Rent:2,100/mo (in spring and allowing pets)

Apex home values have gone up 29.7% YoY.

You can have non-zero positive cash flow and speculative appreciation in Apex NC. 

Good luck & LMK if I can help.

-C

@Kody Bernier I'd get a comprehensive quote (or two) from a plumber to see what it would cost to fix all of the pipes. 

Between the original closing costs, foundation repair, pipe repairs and water damage as well as the taxes and commission to sell it you still could come out even (or ahead), however, if you've fixed most of the issues at this point you might consider waiting to gain more appreciation on the property before selling.

Reading your second to the last sentence it's written in a way where you may have already made up your mind.

Good luck,

-Chris

@Priya Gohil

I'm a fan of Durham specifically. As I wrote earlier in the week in a previous post, Durham will be Austin in 5-10 years. Buy in Durham now and you will have massive upside in appreciation in the years to come (I'm speculating of course). Here is an example of a great property that just went active today *I have no connection to this property.

4402 Dolwick Dr. Durham 27713: 4/3/1460 sqft $350K purchase price. Estimate for rent: $2100-$2400/mo. House has a new roof, newer HVAC, fenced yard, garage, cul de sac and updated inside. 10-15 min to both downtown and RTP. Looks turn key to me. Put 25% down ($87K) and have a PITI payment of $1480/mo. 10% for management ($210), 5% for vacancy $105, 5% for maintenance $105, 5% for cap-ex $105. Puts you at $2K/mo expense. You end up just north of break-even in cash flow however, if housing continues to appreciate at a similar rate of 6%/year in Durham specifically this property would be worth $468K in 5 years or $118K in appreciation gain. 

@Priya Gohil

1) The current property tax rate on Redfin is correct and fine to use in your calculator. The assessment they use is from 2019. Note, when they reassess your rate will go up an estimated $83/mo (to about $350/mo). The homeowner's insurance Redfin lists is too high as they assume you will reside in the property. You would get a landlord policy for the property which covers the 4 walls + liability insurance. The tenants would use rental insurance to cover their personal property. While insurance can vary based on factors including your past claims, I personally would use a monthly number closer to $50/mo for that property.

2) Interest rates for an investment property with 20% down and a conventional loan assuming the borrower has good credit and a good DTI (debt to income ratio) should be closer to 3.5%-4.5%. Make sure to get prequalified and your lender can give you a better idea of your rate (which varies by day). You will need a prequalification to submit your offer. I recommend using this daily mortgage rate website to keep up to date on which direction rates are heading. It won't give you your exact rate but it will give you trending direction: http://www.mortgagenewsdaily.c...

3) I show that your monthly PITI payment on this property (making a few assumptions) should be closer to $2124/mo. Add in 10% management = $220/mo, + 5% maintenance =$110/mo, + 5% cap-ex =$110/mo + 5% vacancy = %110/mo and your total monthly cost is $2674/mo. This means based on your rental rate of $2200 you would lose $474/mo.

Finally, here is an opinion and not math so take it FWIW, ...I also moved from California (West LA) to NC, and while $424K for a 2 bedroom townhouse sounds inexpensive compared to Cali that is really expensive for a rental in NC. You are not going to find a wide funnel of renters looking to spend over $2K for a 2 bedroom condo/townhouse. Having a wide funnel of highly qualified applicants is always what I want out of my rentals and for that reason, I look for the sweet spot of rent in a city. In Raleigh/Durham that number was closer to $1500/mo and in the last 18 months has climbed to $1700-2K/mo. I'd suggest working backward from here and finding and finding a property with a piti payment that still leaves whatever cash flow you're looking for along with appreciation (which is always speculative).

Good Luck

@Jay Wang if you look at most of my previous posts about Raleigh/Durham they are data-driven answers, however, in this case, I think a common phrase I hear around town best answers your question about Raleigh vs Austin.

"Raleigh/Durham will be Austin in 5-10 years"

For that reason, I'd invest in Raleigh/Durham right now. 

Also, if you want to split hairs between Raleigh & Durham, it's the uniqueness of Durham and its proximity to RTP that will make it the next Austin. 

Clearly, there are enough opinions about blinds already so I will focus on the walk-through and time to return the SD.

1) Walkthrough in person after the tenant has moved out. Damage can easily be hidden by furniture etc. 

2) I certainly allow tenants to walk through with me if they request. I let them know when I will be there and it is up to them to meet me. If they do walk through with you take notes and if they ask you 'how's it going,' I just reply that I'll need to compare my notes and pictures to the original notes and pictures on my computer back in my office. I will e-mail them the details.

3) In my state (NC) I have 30 days to return the SD with an additional 30 days possible. 

4) Even if I do the walkthrough on day 1 of the vacancy I often wait closer to the end of the 30 days in case: there is an issue w/ unpaid utilities, the new tenant moving in reports damage I may have missed, a vendor doing a repair increases their charge over the initial estimate, etc.

5) The return of a SD can be a volatile topic if you don't manage it properly. Have a system, stick to it and provide just the facts and limit your opinion.

Good Luck

@Eric Brown 

• Collect the security deposit within 24 hours of signing the lease (for me this is usually 60 days before the lease start date).
• Require verification of rent paid and utilities in tenant's name before giving keys/access to the property. I typically do this when I meet the tenants and walk the property on the 1st day of the lease.
• It is not uncommon for good tenants to run into technical issues with payment and utilities during the initial setup.