All Forum Posts by: Account Closed

Hey, have you ever considered Charlotte, NC? It is a great investment market. It has a major airport, lots of sports/activities, drivable to a beach or mountain on a Friday afternoon, strong rental and real estate market. The city itself is very nice, with lots of options for outdoor activities, restaurants, shopping, etc. There's a diverse economy with banking, manufacturing, healthcare, tech, real Estate, along with other industries, which means the local economy is more robust than what you would find in other parts of the country.

CLT has had constant population growth for quite a while, which means continual demand growth for housing. Within the city limits has some pretty expensive (and increasingly so) areas, some pockets of the town and the suburbs (Concord, Huntersville, Belmont, etc) are far more affordable and offer better long term rental ROI. Within the city, you will find strong appreciation and solid ROIs for flips/new-builds and short-term rentals. Overall, we are experiencing appreciation from 10% to 16% year over year (depending on location).

I can help if you have any CLT-specific questions, feel free to DM me. I also have vendor/PM connections as well. 

Also, cap rates and GRMs should not be what you are looking for in SFR's. They only apply to larger multifamily properties with multiple income streams and tenants. And while the CA market is great for the appreciation I think it's plain for everyone to see that the market is gear towards larger experienced investors with a good amount of capital to start with. Look at how the rent control is gear toward older properties and has a sunset clause that doesn't affect the large new projects major companies build.

If a newer mom and pop investor acquires a property that has unforeseen issues or runs into problem tenants you're going to be facing problems that are much more expensive and difficult to solve and will set you back in your overall goals for your portfolio. 

I still get confused looks or laughs from local investors when I explain some of the hoops you have to jump through back in CA vs NC. 

I can send you some information on what you should look for in your first investment property and what red flags that people miss and learn the hard way. I've managed 700 units at one point from class A to C properties going all the way to the imperial beach to oceanside. 

My favorite is when you get a turnkey multifamily with all new tenants that have security deposits that are 2-3x the market rental amount and payments are not timely or you always have problems at the property. Oh, yea, and have fun trying to get them out in a timely manner and replacing them with a new responsible tenant. 

@Emmanuel Mendes 

As someone who was in a similar situation and has experience in CRE sales and management in San Diego, I understand your struggle with investing in your backyard vs out of state. The average home price in San Diego is 700k let say you pick up a condo for around 400k and don't self-manage. You have an HOA which is an uncontrolled cost, high property tax, and give 8-10 percent of gross rent to your pm. And along with the other reoccurring expenses with the property all, it would take is an appliance breaking down, a bad tenant, or a large repair and there goes that year's cashflow.

You will see large appreciation but will be stuck with the property for a longer period of time. And while the appreciation is great you have to remember you will still see the same percentage return on your property but it will be 12% on 300k vs 700k.  

It really comes down to what your plans are and the risk tolerance. Are you willing to put in the upfront work of studying the local market, building out a team, and relationships with people in another city? If you are I have some contacts in the area I can connect you with. 

I was living in San Diego and moved to Charlotte NC so I can leverage my experience and have a more business-friendly climate that will let me make the most of my bottom dollar. Which is a big challenge for first-time investors. If you just want to pick up one property and set it and forget it and not worry about the monthly income coming in then I would suggest staying in a market you understand. If you want to acquire more properties in a shorter amount of time, willing to put in the work. And build a large portfolio in a state that is landlord and business-friendly then go for it. 

Congrats! Where are you looking to purchase a property? Feel free to dm me if you have any investment questions!

You can use traditional financing but it depends upon the deal. Sometimes they have liens, unpaid taxes, etc that could make it tricky for lending options. Not every deal is the same though. I would consult a local lender that is experienced with work with investors. 

For future reference, the security deposit should not be on your income and should be held in a trust account. I don't know why your prop manager reported it that way but it should not be reported as income. If it is it would be considered an owner held deposit which at that point should be deposited into a trust account that you have. Speak with your pm about this as it will save you the hassle in the future if they were reporting it correctly on your monthly owner statement and distribution.

Security deposits are not the landlord's money but are the tenants your just holding it and will be changing back any damages, utilities, and unpaid rent.

You can do spot treatments/unit fumigation as well. I have tented a 10 unit multifamily property and we had them back within a year. So a couple of grand spent on the fumigation along with providing the rent/hotel credits wasn't worth it. I would rather just spot treat and give the tenant some cash for the trouble. The joke in CA is you are just clearing out the current termites for the new one to fly in the next week. 

Flipping in the current market makes sense for the experienced investor with a built-out team who is ready to make an offer the moment the property is listed. For a newer investor with how hot the market is I would shy away from it unless it pencils out to be a home run or you a ready to put in a lot of the work upfront to make it happen (following the correct order of operations). I would also take the seller-paid closing costs out of the equation as well for the underwriting as this would be a big ask in the CLT market. We are almost at a 100% percent list price ratio (people are paying almost list price or higher every time with multiple offers). So if I have 10 offers why would I accept the one that wants me to pay for your closing costs? For flips you need to have your team up and running with your rehab numbers sighted in as the margins right now for flips are not as large as their were in previous years. Be prepared to underwrite multiple deals and track those properties as well to see what is happening after the property is listed. 

What numbers/ reoccurring expenses are you running for buy and hold? d

Just sent you a dm with more info for the rehab. Carpet is easy to replace and normally has a lifespan of 7 years. Sometimes you get lucky and there are nice hardwood floors under the carpet that just needs to be refinished. This is a little cheaper than new lvp flooring but sometime to keep in mind

So after quickly looking at your underwriting you really want to focus on your ROI, DCR, cash flow. CAP rates and GRM's don't really apply to SFR'S. Also, what is the breakdown of your rehab and how did you look at the rental comps? I used rentometer before and its great to have as a baseline but I would also suggest looking for previous listings for those properties to see if you can find any pictures to make sure you are comparing like-kind properties. Closing costs seem high as well.