@Kyle McShea
Question:
#1 What does a good Charleston deal look like?
- 20% equity after rehabbing
- 4% Cash on Cash return
- 5% Appreciation rate
Appreciation in Charleston over the last year was 9.8%
Answer: If you are doing a heavy value add, you can certainly build 20% equity. I am buying flips at 70%ARV -repairs although I am looking at on market and off market deals and sorting through a lot of junk deals on a daily basis. I have built up a portfolio of (20, but 19 in CHS) rentals that I have a min 12% cash on cash return and 25% equity in. However, I started in 2019. It was easier then, but not impossible now. I am hitting those numbers now on a current project thats a very heavy value add multifamily in North Charleston. North Charleston is where I am finding you are most likely to find a cash flowing rental as it has a stronger rent to price ration than most other areas in town, unless you are open to STR's. I like to think of appreciation as icing on the cake. However, my next buy will be downtown or in surrounding areas in the city of Charleston as they have historically seen more appreciation, or to think of it differently, the 9% appreciation will result in a bigger increase in my net worth on a 500k property than a 200k property if the rate is the same. I also wont get to cash flow immediately on this like I have on my North Charleston rentals but am at the point that I'm trying to build a mix of both types of property.
I've also noticed West Ashley / Johns Island struggles to reach the 1% rule.
This is correct, direct to seller is the best way to find this or its pretty rare without a large downpayment or STR.
Are others seeing this as well or should I find an agent who is in the loop w/ off-market opportunities?
Or would I find better opportunities to reach the 1% rule in areas like Summerville / North Charleston / etc?
I am an agent as well and would be happy to chat :)
#2 House Hacking Room Rental Rates (West Ashley / Johns Island)
I am looking to house hack and I would like to know what does the going rate for a 1 bedroom 1 bathroom usually go for?
I've seen a range of $1,000 - $1,300 based off Facebook Marketplace + Furnished Finder, but what are the numbers you are seeing?
A: This is pretty accurate from what ive seen, parking, access to a private bathroom are two factors that can help you push rents as well as the updates in the house. The higher you go, the more likely that they can afford a studio or 2 bed and dont need to rent a room.
#3 North Charleston areas to invest
I understand that Park Circle has been gentrified over the past couple years but it looks like it has gone through its up and coming phase. Does anybody have ideas to where other areas in North Charleston are gaining traction?
A: I don't see that Park Circle is done growing. I think similarly about hanahan, west ashley, and Johns Island. Would be happy to chat to go into more details about subdivisons.
All in all, I think a house hack in a good area of town is a great bet to get started. I house hack now and its my favorite thing to help clients find.
