All Forum Posts by: Curtis Waters

Haven't used Shaw - but have done 2 properties with TrafficMaster Allure series available from Home Depot.  They call this Resilient Vinyl Plank.  It is not floating - each strip has a GripStrip (with a protective strip you remove when installing).  It is water resistant with a 4mil wear layer.  You can find many landlords on BP who swear by this stuff!

I installed the click TrafficMaster (floating floor) in a rental home last month, and it is holding up to moisture and pets well.

The Shaw New Market 6 is a lower price ($1.13/sq ft vs Traffic Master Allure at 1.29-1.49/sq ft), but my first impression is that the Shaw might be more labor intensive.  

Here is a great BP thread on LVP - https://www.biggerpockets.com/forums/52/topics/137125-best-flooring-for-a-rental

Sid,

I consider real estate investing as a business.  If you bought properties with little or no cash flow, you will be funding your business for an unknown period of time.  Your only upside would be appreciation, which any impact to the economy would easily wipe out and take you negative.  Of course, a savvy business owner wouldn't consider this approach.

A better strategy would be an informed decision to purchase a property that is older but has its major systems rehabbed as required (electric, plumbing, HVAC, roof).  The benchmarks I use ensure that the property cash flows and returns at least a 10% return annually on your total investment.  You can contact me directly for the website containing the calculator I use to decide homes to purchase myself.  You are fortunate that the metro Charlotte market has property bargains now - but prices are on the rise!   

You will find others who promote a 1% strategy (if home costs $150K then must rent for $1500/mo), but my strategy is based on return and risk.  You can still find many low cost homes in the Charlotte market - the key is to have the home inspected by a NC home inspector who understands your goals and works with investors, then consider your total investment in your return calculations.

Alex,

I wasn't active in real estate in 2009-2013 as you were, and I value your input.  

Recent sale in the Thomasboro neighborhood - Purchased in Dec 2014 for $37.3K (includes a new HVAC including labor to install), had net cash flow of $7k+ for 2015. Sold for $47K in Jan 2016 (with an increase in rent for 2016). (This was sold this to invest in multi-family). New owner should see $6000 in 2016 after a $100/mo maintenance reserve and property management, resulting in over 12% CAP rate (NOI/investment).

With homes under $100K you have an opportunity to get 10% CAP rate. Higher priced homes are not able to provide even a 1% rental rate. The first benchmark I use to purchase says that for a $1000/mo rent my investment can't be over $80,000, and the second benchmark says NOI (Monthly Rent - (taxes/10) - (Insurance/10) - $100/mo maintenance reserve) can't exceed $800. If the second benchmark calculation is lower, I add two zeros to get the amount I pay (cost plus any fixup or rehab). I use a 10 month year - the extra 2 months take into account vacancy and property management. This also assumes the owner will place $100/mo in reserves for maintenance, and keep this reserve over the time they own the property to cover maintenance and major system update or replacements.

There are still bargains in the Charlotte metro area, and the key is to buy lower priced homes and rehab the major systems if needed - new roof, plumbing, electric, HVAC.  There are many investors in Charlotte successfully pursuing this approach.  The obvious question is does the value hold?   We see that Charlotte growth is turning rental neighborhoods into not only great investment areas but strong interest from home buyers due to the value from rehabbed homes.  This trend is also pushing values in rental neighborhoods.  I agree that the lipstick approach to rehabbed homes makes for danger!

Areas that were strong Charlotte rental neighborhoods are seeing major rehab trends - Belmont, Wilmore, and Double Oaks are examples of this trend, along with most neighborhoods within 4 miles of downtown.  Many of these neighborhoods are seeing significant fix and flip activity, turning rental neighborhoods into great homes (total rehabs or teardown & new builds) for buyers who work downtown.  Charlotte is a city with massive growth and major neighborhood transition.  

I am also seeing great value in Gastonia and Concord.

@Chris T. has it right. In general, the lower the price the better the return. For example, I recently listed a 3br home that is priced at $45K (with under 1K in costs just to make it more presentable). Homes in this area (28208) can rent for at least $900/mo, with a projected net CAP rate of 14% (yes net - after expenses). If you want to get 10% or better CAP rates (annual net operating income divided by property cost), then lower priced homes can provide this type of return. Most $150-200K single family homes in Charlotte won't generate enough rent to provide these types of return (unless you got an amazing deal).

Charlotte is experiencing massive growth, and neighborhoods that might have been shunned 3-5 years ago are seeing heavy rehab and teardown/new activity along with significant rent increases.  This makes Charlotte a great opportunity for buy & hold now!

@Chris T.

North Carolina requires attorneys to close real estate transactions.  I have used both Dale Fussell and Elizabeth Blake.

I have used R. Dale Fussell & Elizabeth Blake (different firms), both in Charlotte.  

Let me know if I can assist you in your process.  I am both an active investor, on the advisory board of Hobby Millionaire, and a NC Real Estate broker.  Join me for lunch on Tuesdays noon at the Hobby Millionaire meeting!