All Forum Posts by: Andrew S.

Especially relevant for BP members here in NC: a shoutout to @Chris Martin  His analyses of the local markets are extremely thorough.  A huge resource

Too many to mention all but the top three would have to be @Bill Gulley, @Jay Hinrichs and @Jon Holdman  simply based on the quality of their posts and their prolific posting.  Again though - almost countless others should/could make the list

I recommend Barry Scott in Raleigh.  Used him many times.  Don't know for sure if he works in Durham, but I think he probably will - he did work for my in Chapel Hill also.

Google "barry scott surveyor raleigh" for contact info

Obviously, your local situation is what matters most.  I happen to know that in Burlington, other PMs also do not charge lease up fees, so if you were to implement one, then that would put you at an immediate disadvantage.  Also consider that adding a full month lease up fee will potentially more than double the  cost for your landlords (unless you are fortunate enough to find tenants who stay for a long time).  That said, in MY neck of the woods a lease up fee is pretty standard (though often 1/2 month).

I would consider many of the other fees you listed as “gimmicks” - seems like those activities should be covered by your 8-10%.

Personally, I have always considered a PM maintaining “in house maintenance staff” a problem.  At a minimum, it creates conflict of interest.  My direct experience with that lasted exactly one turnover - quality of work was low, price was high because of overhead.  Yet, I was going to be stuck using the same crew again and again.  I fired that company after 2 months and will not ever hire another PM with in house maintenance staff. 

Rather than increasing revenue, you could consider streamlining expenses.  What have you done to reduce your operating cost?  Are all your processes as streamlined as they could be?  In your OP, you suggest that you have not increased any fees for many years.  However, since the fees are tied to rents, your revenues have likely increased significantly over time (and will continue to increase as your market is about to explode because of all the growth driven by people flocking to RTP).

I don't have a problem with banking on appreciation - I think the downside risk here in Raleigh is pretty small.  That said, even if your maintenance and capex costs are relatively low right now, they will NOT be zero and you would be well advised to plan for SOME expenses.  You WILL also have turnovers (i.e. vacancies) that require some degree of investment (re-paint, carpet,fire alarms, light bulbs, etc, etc) and while the vacancies may be short, its not easy to turn over a unit with ZERO downtime.

Regarding your planned refi, I assume your 3.75% 30-year is based on an owner occupied mortgage? Even if you still live there at the moment, your INTENT clearly is to use this as a rental, so be careful about not running into mortgage fraud traps. Also be aware that many mortgage products may not let you drop PMI anymore without yet another refinance or at least reworking (for a fee) the current mortgage. Check the fine print.

Depending on your situation, you may be able to go with a concrete patio instead of the deck.  Cheaper to put in place and much easier/cheaper to maintain; yet still gives tenants a nice outdoor space.  

I think you will find it exceedingly difficult to cash flow with those numbers in Raleigh.  Maybe Durham, but make sure you REALLY understand the rent ceilings.  If you are above 1500 a month for a typical 3/1.5, you better be in a VERY special location.

Also, since you asked for advice: my advice is, DO NOT cash out your IRA. Find a different way to get the downpayment or wait until you have saved up more cash.

One more thing: if you have really tried and tapped out all your friends and family, then networking is your next step. Go to your local REI meeting and tell everyone about your deal. Get to know people. Once you have established yourself, there may well be folks who are willing to entertain financing your deal. But again, it is about establishing a personal relationship of some sort. This is almost impossible to do purely online. That said, there are A FEW people on this forum who have established themselves to such an extent here on this board that "private lenders" might consider doing business with them without ever meeting them (and, in my opinion, Jay Hinrichs is one of those rare birds - but you will have noticed that he has >30'000 posts/votes, and you have 12), but for the rest of us, its strictly a belly-to-belly thing.

Yes, it is state specific and Florida is a state where you do not need an attorney to my knowledge

I can see that you might be displeased with Jay's response, but that doesn't mean he is wrong.  Private lenders are typically found amongst your family or circle of friends.  Sometimes, you can find them by networking and establishing a personal connection with someone.  The key point is that private lenders might consider lending you money because they already know and trust you.  This will allow them to take a chance on you where a purely commercial lender might not.  For example, you say that your credit score is insufficient for a bank or hard money lender.  Well, your brother, or your uncle, or your bestie, may not care that much about your credit score.  They know that you will pay back the loan because they trust your character.  Well, a bank or commercial lender does not operate on that basis - they deal with facts, credit scores, risk analysis, etc.  A possible exception might be a hard money lender who may take a chance on you if you present a solid deal, but they will want to be compensated for this risk by charging 5 points upfront and 15% interest.

So, all of this means that coming to a public board like BP and asking "where are all the private lenders" is an oxymoron.  By definition a private lender is someone you know already, so you won't find any here.  That's what Jay was pointing out.