All Forum Posts by: Evans Wright

Hey @Brian Kobus, connect with @Anne Sargeant! She manages MTR/STR and is awesome.

I love the idea of buying at every duty station if you are in a position to do so. It is how I built my portfolio and always support other service members attempting to do the same. 

My only point to bring up outside of all the benefits is one detriment, which I have not seen mentioned in any other post. Debt to income ratio. I bring this up because while I do not know the price of condos in HI, one can only assume they are very steep. If you are leveraging a VA loan then you may not put anything down thus vastly impacting your DTI when you go to PCS and want to buy another property down the line.

I am sure that market will continue to present opportunities to increase rent YoY and make a strong case for appreciation but I would make sure you understand current condo prices/rents and how that would impact your ability to purchase down the line assuming you can rent it out. Get with a local lender especially one who invests and run scenarios to understand the impacts. Hope that helps. :-)

@Gregory Saysset, I do not think anyone on here will be able to influence your decision since it sounds like you have made up your mind. What I will do is help you understand different options you might have available to you.

Keeping the asset

1. Cash out refinance - Most banks will give you up to 75% LTV. Assuming $800k valuation minus what you owe, that will give you about $290k ish cash in your pocket. Your interest rate will go up to current market rate but you will still have a property. Plus additional tax benefits such as depreciation, etc. The thing to answer, after refi at currents rates and taking max LTV loan, will you be cash flowing anymore after operating expenses, PM, etc? Maybe, maybe not.

2. Home Equity Line of Credit - You can find a bank that will give you up to 90% LTV which will give you a HELOC of about $410k ish. Current loan remains the same and you get a credit card for the equity to buy properties. Higher interest on HELOC but still get benefits previously mentioned of owning a property. You would 100% want to have a plan in place on how to pay back the HELOC ASAP and execute it.

Even if you continue to rent the Cali property and sell down the line, depending on how long you wait to sell, you may be faced with capital gains situation but you can do a 1031 exchange at that point. 

Selling the asset

1. Sell the property, reap the benefits, and move to CLT. I would not recommend waiting and renting for six months to assess the market as we do not know where the market will be in six months. Right now inventory is slowly creeping back up as many buyers sit on the sidelines due to high interest rates which means less competition but also increasing home prices. Rates keep going up but due to limited supply our average price still keeps creeping up. If rates come down even half a point, buyers come out of the wood works and it's multiple offer scenario. Heck depending on what area you buy in you will still face that challenge now.

Point I am trying to make is that you should connect with a local experts and understand the market now as you move to prep your house to get ready to be listed. With the strong macro factors like population migration to Charlotte, it will be hard to lose in the long run with whatever investment you buy. All in all just keep yourself informed and buy what works for you and your long term goals. 

Happy to help answer any questions you may have about the area. :-)

Hey Danny! As Wyatt said, your first stop should be the HOA CCRs. The new UDO that went into effect on 1 Jun 2023 allows many residential areas in Charlotte to build ADUs up to 50% of the primary structures sq footage if detached, 40% if attached. That might get vetoed by properties in HOA because many of them will designate restrictions against what can be built in your yard or even to your garage. If you are cleared hot, I would connect with a GC for building structure and plans department for the city. Hope this helps and happy to help provide any other guidance.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $372,000
Cash invested: $135,000

Purchased a SFH that will be used as an STR. Perfectly situated 3 minutes to the lake and 20 mins to the heart of Charlotte.

What made you interested in investing in this type of deal?

My fiancee and had been keeping our eye out for potential investment properties in or around the Charlotte area. When I showed her one property in the area, she was not amused. The next day I found this property and took her with me and she loveddd it and said it was so charming. If it wowed her, then we knew we had to acquire the property and elevate it to be an amazing STR.

How did you find this deal and how did you negotiate it?

- This deal was listed on the MLS for just over 20 days.
- The agent said the sellers were motivated because of a relocation to another state.
- I offered $18k under asking and they did not even counter which surprised me since inventory is extremely low in the area.

How did you finance this deal?

- My fiancee and I contributed 50% each to the down payment and closing cost.
- We leveraged a DSCR loan.
- Terms were 75% LTV and 8.125 interest rate
- I represented myself as the Realtor and was able to apply all of my commissions towards closing cost.

How did you add value to the deal?

- We painted the entire place, renovated the bathrooms and ran electricity out to the 350 sq ft shed.
- The shed is being used as a game room, currently equipped with a ping pong table and cornhole.
- It will evolve over time to a fully finished hangout spot/bar.
- We also hired a professional interior designer and her husband contractor to design and furnish the entire interior and exterior.

What was the outcome?

- We now have been live on Air BnB for a month and were able to get over $5000 in bookings. With a great PM, our hope is that the income and great reviews will continue to make this property stand out amongst the competition. They are building a hospital a half mile away so we will also seek to leverage as an MTR in slower seasons.

Lessons learned? Challenges?

- Biggest lesson learned is control what you can control and do not stress about the rest. There were numerous setbacks to closing to include low appraisal, lender changes, and other underwriting request.
- Order 10% more tile than needed! I swore I did this because the website I ordered from has a "10% more option" and still came up short for one of the bathrooms. We were delayed again during renovations/interior design. Guess my measurements were slightly off...

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself as the agent but I have to give credit to the listing agent who was super helpful in getting the deal done. When my first lenders appraisal came back way below offer price, she provided me with another DSCR broker who was able to get things done. Plus we got a new appraiser out there and then the property appraised above offer price!

Investment Info:

Other buy & hold investment.

Purchase price: $45,000
Cash invested: $1,000

- .52 acres of land listed on MLS for $250,000.

Exit strategy - Partnering with a GC who has been in the business for over 10 years and lives in the neighborhood to build a custom home.

ARV ~$1M. Many new builds are selling for around that price. Timeline is 15 months.

What made you interested in investing in this type of deal?

A local GC who I befriended and I started looking for land to purchase to build a property to sell in areas that support seven figure sale prices.

How did you find this deal and how did you negotiate it?

- Originally offered $51,000 because the owner bought at foreclosure for $30,000. They turned it down.
- Followed up a month later and offered $55,000 cash or $90,000 on seller financing terms and they countered at $60,000 cash and then we went under contract.
- The survey uncovered additional erosion in the land so I renegotiated a lower purchase price of $45,000, they accepted and we closed!
- I am a Realtor so my commissions for this deal covered most of my closing cost.

How did you finance this deal?

- Leveraged OPM.
- Investor provided $44,000 cash and is getting 8% interest annually for the next 36 months or until the project is complete and sold.
- The cash was secured with a promissory note and deed of trust against the land.
- Upon selling or 36 months, the investor will get their entire principal balance back

Lessons learned? Challenges?

The main challenge is seeking private capital or bank funding for the construction cost at a reasonable LTV to borrow capital. Estimated build cost is $600000.

BP Community,

I am looking for recommendations for a reputable land surveyor that services the Charlotte market. I went under contract for some land and hoping to get some one out there to figure out the maximum buildable area allowed and other questions. If you have any referrals, I will give them a call. Thanks!

Hey @Solomon Rosenberg, depending on the area you might have different zoning ordinances. In June 2023, that will all change due to the new Uniform Development Ordinance going into effect for Charlotte. With the changes, you will be able to build an ADU up to 40% of the square footage of the primary structure if it is attached i.e. garage. If it is detached, you can build a structure up to 50% of the primary structure.

Here is the link for the UDO that specifically addresses ADU's.

https://charlotteudo.org/wp-content/uploads/2022/08/CLT-UDO-Adopted-08_22_22.pdf#page=299

Hope this helps and feel free to reach out if you have anymore questions.

@Anne Sargeant would be a fantastic STR PM to reach out to. She is a super host and well versed in the Charlotte market.