All Forum Posts by: Levi Bennett

I'm in Mooresville (North Charlotte) personally, but have specialized in investment homes for 9 years in Florida and all over Western NC. You have a good observation, I actually wrote about this here on a biggerpockets a while back, you can read it here.

MF is doable here, but inventory here is very low because of zoning trends. There's a lot of ways to capitalize on cashflow and BRRRRing in our market, it's not limited to MF, but STR, and especially MTR (medium term rentals) around Lake Norman. There's a lot of corporate housing needs for furnished monthly contracts, as well as a significant amount of development where people move here from out of state and need a place to stay while their house is being constructed. There's a lot to talk about here, and multiple entry and exit strategies, but if you want to discuss more, feel free to reach out.
I hope this helps! Best of luck to you!

Hey there, welcome and great question. I think you're off to a good start. I wouldn't pigeon-hole yourself to a location, this is a common mistake that new investors make. If your goal is ROI, then seek ROI with someone who can help you underwrite, don't make it about location.

Location is one of 7 value layers I consider when helping clients find STRs (I've been doing it for 9 years, and have closed over 30 in the last 18 months). The acquisition is everything, and things like views, interior design, uniqueness, availability, bedrooms per dollar are other things to consider.. the more "value layers" you can stack, the better chance you will have at standing out. Sometimes that is in a commonly desired location, and sometimes it will surprise you and be in a location nobody thought of. The actual property itself, layered with the type of demographic that will rent the property, is more key to a successful STR / MTR than just location alone. I've seen this mistake made over and over. Be careful of saturation for different types of properties in a particular area (for instance, one zip code might be off-the-charts for return, but 3 bedrooms are over-saturated and difficult to occupy, this is the "availability layer"). Use a realtor or someone who has access to PAID data that give deep insights into the specific markets you're looking at so you can select a property that has a high chance at being a top 10% performer.

If you want to look at locations, there are several places in NC that can meet these goals, beach, urban or mountain (some good ones were mentioned above).. but I would say it depends heavily on your goals, your budget, etc.. work with someone that can work with you to maximize ROI.

Best of luck to you, and I hope you find this helpful!

Hey Joseph, welcome to the community! I'm a broker in NC, investor and have been doing STR and investment real estate for clients and myself for 9 years in North Carolina and Florida.

The beach can certainly be a good investment, but comparing it to the mountains it will be hard to make a case. Seasonality at the beach is dramatic, and weeks or month long contracts are easy to obtain almost anywhere in the South because of housing demand shortages, particularly in places like Charlotte (8000 listed homes, and 60,000 applications for those homes for medium term rentals). You can definately do well at the beach but keep in mind a few things.. one is the homestead exemption for SC is dramatic. Most investors pay 6-10x more in taxes per year for an investment home there, and that can kill ROI. The other thing, back to seasonality, is that peak season in obviously summer, but in the mountains you have 2-3 peak seasons. Summer, Leaf, and holidays (and ski season if you're close to a ski area). Cash flow tends to be more consistent in the mountains. If you're set on a beach area, I would allocate more money for at least a 4 bedroom (big revenue jump for multi-family stays..) and focus on Florida since the seasonality is significantly longer than even Georgia or SC.

Finally, do NOT fall into the newbie trap of thinking location is everything. If your goal is ROI, then don't make your goal location, make it acquisition and ROI. There are several layers to acquiring an STR/MTR and one of them is location, but if you leave out the other 6 layers, you could be stuck holding the bag and doing marginal, or worse, losing money because the other factors weren't considered. Definately work with an experienced STR agent wherever you go and use someone who not only knows how to underwrite STRs and has paid data to help you do that, but also someone who understands the fundamentals of what makes a successful STR/MTR and give you the best chance at succeeding and being in the top 10% of property listings.

I hope this is helpful, best of luck, and feel free to reach out if you need anything.  

@Tyler Sherman I think I should chime in. Before I get into it.. I own 5 properties in NC, and have brokered 30+ STRs in NC around Charlotte and Western North Carolina in the last 18 months, and have been doing STR, Multi-family, MTR, and LTR acquisitions and disposition for over 9 years. So I'm not just a random guy chiming in. I have lived in Charlotte most of my life, and specialize in investment acquisition.

First of all, the questions you're asking are really good ones, but you'd be served well to work with someone with experience in LTR, MTR, and STR acquisition so that they can help you sift you through the data and discuss the pros and cons with some actual experience. Nothing against @Eliott Elias but, the truth is, your strategy should align with the goals you have. In some cases that is LTR, other cases that is MTR or STR. There's simply not enough information about you to determine your goals and how best to meet them. Knowing the pros and cons and having PAID data is helplful. I have a full state-wide license to use AirDNA (opinions will differ on this, but here's mine..) and it is, by far, the most accurate. That's coming from experience in comparing my clients performance to actual P&L's that have been sent to me to review. Rabbu is typically low, and inaccurate in certain markets, and Pricelabs have been having issues lately (there's been a bit of an exodus lately into different software platforms). I also pay for Mashvisor, and have spoken to the people at Awning and honestly most of the data just stinks. I can explain why more technically, but basically everyone is scraping the data differently, and weighting things differently.. Also, there is a lot of useless data that is heaped in that isn't helpful and makes the underwriting confusing. 

Most importantly, what @Anne Sargeant said about exact location, and TYPE OF HOUSE is going to be massive. Maybe in one zip code 3-bedrooms are completely over-saturated, but 4+ bedrooms are in high demand. Layer that with a unique style house with a unique feature to the property and you get one that will do 180% more revenue. STR is not a passive investment, so looking at overall numbers are always misleading. You can always beat the projection by stacking "value layers".. things like unique architecture, bedrooms per dollar, views, amenities, interior design, availability (mentioned above) will be your drivers of revenue more than actual location.. so, while location is important, in my opinion, it is NOT the MOST important thing when underwriting. 

Also, from a legal perspective, you can check out this blog I wrote last year after the Wilmington appeals case was lost: "Short Term Rental Restrictions in North Carolina"
The biggest news that's happened since then is that there is a bill that has been introduced to completely ban regulatory restrictions by local governments on STRs, however, it hasn't been added to the house vote yet, so it remains to be seen.. NC, as a state, has been extremely friendly to STRs historically.. there's a lot of reasons why but it's rooted in private property law interpretation here that's very favorable to the owner. In many cities however, you will find there is a big desire to regulate or restrict STRs due to the affordable housing crisis here, so.. we'll see what happens, but for now, that blog I wrote is still accurate and explains it in more detail. 

Finally, since you asked.. here's a few screenshots that might help a little bit. 

Just on quick glance, you can see that 1-3 bedrooms are very overcooked and you'll have an uphill battle getting occupancy. You'll have wind in your sails as Airbnb will boost your listing as a new property for the first 12 months, but in the long run, having a 4+ bedroom is going to be much easier to stand out. In general, you can see the steady growth in market cap, which shows a healthy market.

Not to open another can of worms, but another reason to speak with someone local will be to discuss the plethora of exploding areas around the city that are ripe for STR and MTR growth.

A quick note about MTRs.. in the Charlotte-Metro area in 2022, there were 8000 total listings for MTRs and 60,000 applications. Take that for what you will, but the strategy among the most successful investors here is to buy with the intention of multiple exits, including STR, MTR and possible LTR in the future, and listing across multiple platforms, say STR and MTR at the same time, and take the tenants that make the most sense. 

There's a lot more to talk about, but I hope some of this is helpful. Feel free to reach out if you have any questions. Good luck!

Im pretty sure we have the largest short term investor meetup group that meets regularly in Charlotte. We’re at heist brewery in NoDa  tonight at 6:30. You can find the event on Facebook. 

 It's pretty easy to get the 1% rule in the Short term and mid-term space. That's where most of my specialty is. There's also significantly more owner-control over return than any other type of real estate investment. You need to follow a few rules on the acquisition, and follow a few more on the experience/forced equity/hospitality side, but if you do it, it's about the highest returning equity in the business. 

Since I get almost daily messages regarding small multi-family opportunities in Charlotte and find myself repeating much of the same information on the phone during intro calls, I figured I would go ahead and put my experience into writing for others who are doing research. Particularly those from out of state and not familiar with the Charlotte (or Southeast) market. I also would love to hear (read?) feedback from successful small Multi-Family investors in the Charlotte MSA and Southeast to gain your thoughts, experience, and outlook on the current and future market for this kind of product.

First, allow me to define small value-add Multi-family, I speak with a broad brush.. anything legally zoned duplex up to 50 units (I'm excluding Class A-B big MF)

To set some context, most of the investors that reach out to me are not from Charlotte, or are not intimately familiar with the market here. So this post is to be mainly geared toward to help set expectations for out-of-state investors, and I'm hoping for some solid contributions from people who are actively (or recently) involved in successful acquisition/disposition of smaller MF in the Charlotte MSA (broker, owner, lender.. etc).

My goal here is to keep it real.

Many people have read books, or taken a class or signed up for a guru or coach on the benefits of MF investments, and certainly is evidenced by the recent rise of syndications in the MF space in the last few years. With this knowledge, it seems as though out-of-state investors are analyzing markets that have great job growth, high appreciation, low unemployment, low taxes, but are still "affordable" compared to standards in more expensive parts of the country. Most investors I talk to who find me here on BP are from New York/New Jersey or California or the Middle East. According to their research online, Charlotte ends up appearing fundamentally as an affordable option with great fundamentals. Right?

Here's the problem: Inventory. Or, more specifically, density.

Smaller multi-family is significantly more common in the Northeast, Midwest, and Western cities who had their economic boom in the roaring 1920s-60s and thus, tons of high density zoning was developed across the country (but not the South). This perception in the investment community is often with the presumption that cities like Charlotte, Jacksonville, Orlando, Tampa, Atlanta, etc, are all cities similar in population to other cities across the US.. but if the populations are comparable, what is the catch? The catch is that the populations are all recent.. recent as in, massive booms in the last 40 years when suburbs ruled the development world, and density didn't necessarily increase except in the most urban and highly commercialized sections of the city (city centers primarily, which is mostly class-A prime real estate).

So where does this leave us? Thousands of investors nationally and internationally, not from the South, see the growth, economic advancement, and solid fundamentals, and see the opportunity in Multi-Family without considering inventory available in these cities. This has created, since about 2016, an asset class of very limited MF properties in the Southeast that trade at unreal cap rates. Value-add opportunities in the form of Class D, C and B properties is one of the most desirable and heavily marketed asset classes in the country, and few people talk about this (which I felt the need to post this).

I have brokered several small multifamily properties in the Southeast. The reason I pulled back from my marketing to owners of these asset types, was when I began hearing that they were getting anywhere from 3-10 offers per week from would-be investors.. and that was in 2017. It has not slowed down. Many owners have received thousands of offers for their small MF properties in the course of a year.

I'm not saying it's impossible to get small, value-add MF in the Southeast, but I am saying that most people I talk to have no idea what they're up against and often have unrealistic expectations of what they can buy here for the money. From an ROI perspective, there is much more money to be made in development, or investing in the booming short-term rental market in the Southeast where laws are significantly less restrictive (particularly in North Carolina, where municipal permitting is illegal). This is where my niche has evolved. MF is still, and will always be very attractive, but most trade off-market and requires a huge time investment to build relationships with current owners. Most everything "on-market" is priced at an impossibly low cap rate and doesn't make sense for the average investor.

This is not to discourage the determined investor, but I only think it's fair that people realize the competition in our market for this asset type. I also want to suggest other ways of getting the 1% rule in the South (which is still achievable), and set some expectations for this interesting market and economy that we all find ourselves in.

I would love to hear the thoughts and comments of people investing in real estate in the Southeast and get some other opinions! Cheers.

To be clear, the big platforms do not charge the cleaning fees, the owners set the rate and place it on the platform, and whatever taxes for STR that are not paid by the tenant at the time of booking will come out of the owners pocket, which is why you see those charges.

It sounds like you're trying to get out of a cleaning fee primarily, which, I can tell you as an owner of an STR, I would not do regardless of the promises made. 

HOWEVER.. with all that said, an easy way to find direct bookings is to search for properties you like on the big platforms, and then message the hosts directly and ask for a direct booking link, or negotiate the rate. Some may go for it, some may not. Many STRs have a direct booking site that will save you a little bit of money, so it can't hurt to ask. The risk you run is violating your terms of service agreement with those platforms and being permanently banned.

Since I get almost daily messages regarding small multi-family opportunities in Charlotte and find myself repeating much of the same information on the phone during intro calls, I figured I would go ahead and put my experience into writing for others who are doing research. Particularly those from out of state and not familiar with the Charlotte (or Southeast) market. I also would love to hear (read?) feedback from successful small Multi-Family investors in the Charlotte MSA and Southeast to gain your thoughts, experience, and outlook on the current and future market for this kind of product.

First, allow me to define small value-add Multi-family, I speak with a broad brush.. anything legally zoned duplex up to 50 units (I'm excluding Class A-B big MF) 

To set some context, most of the investors that reach out to me are not from Charlotte, or are not intimately familiar with the market here. So this post is to be mainly geared toward to help set expectations for out-of-state investors, and I'm hoping for some solid contributions from people who are actively (or recently) involved in successful acquisition/disposition of smaller MF in the Charlotte MSA (broker, owner, lender.. etc). 

My goal here is to keep it real. 

Many people have read books, or taken a class or signed up for a guru or coach on the benefits of MF investments, and certainly is evidenced by the recent rise of syndications in the MF space in the last few years. With this knowledge, it seems as though out-of-state investors are analyzing markets that have great job growth, high appreciation, low unemployment, low taxes, but are still "affordable" compared to standards in more expensive parts of the country. Most investors I talk to who find me here on BP are from New York/New Jersey or California or the Middle East. According to their research online, Charlotte ends up appearing fundamentally as an affordable option with great fundamentals. Right? 

Here's the problem: Inventory. Or, more specifically, density.  

Smaller multi-family is significantly more common in the Northeast, Midwest, and Western cities who had their economic boom in the roaring 1920s-60s and thus, tons of high density zoning was developed across the country (but not the South). This perception in the investment community is often with the presumption that cities like Charlotte, Jacksonville, Orlando, Tampa, Atlanta, etc, are all cities similar in population to other cities across the US.. but if the populations are comparable, what is the catch? The catch is that the populations are all recent.. recent as in, massive booms in the last 40 years when suburbs ruled the development world, and density didn't necessarily increase except in the most urban and highly commercialized sections of the city (city centers primarily, which is mostly class-A prime real estate). 

So where does this leave us? Thousands of investors nationally and internationally, not from the South, see the growth, economic advancement, and solid fundamentals, and see the opportunity in Multi-Family without considering inventory available in these cities. This has created, since about 2016, an asset class of very limited MF properties in the Southeast that trade at unreal cap rates. Value-add opportunities in the form of Class D, C and B properties is one of the most desirable and heavily marketed asset classes in the country, and few people talk about this (which I felt the need to post this).

I have brokered several small multifamily properties in the Southeast. The reason I pulled back from my marketing to owners of these asset types, was when I began hearing that they were getting anywhere from 3-10 offers per week from would-be investors.. and that was in 2017. It has not slowed down. Many owners have received thousands of offers for their small MF properties in the course of a year. 

I'm not saying it's impossible to get small, value-add MF in the Southeast, but I am saying that most people I talk to have no idea what they're up against and often have unrealistic expectations of what they can buy here for the money. From an ROI perspective, there is much more money to be made in development, or investing in the booming short-term rental market in the Southeast where laws are significantly less restrictive (particularly in North Carolina, where municipal permitting is illegal). This is where my niche has evolved. MF is still, and will always be very attractive, but most trade off-market and requires a huge time investment to build relationships with current owners. Most everything "on-market" is priced at an impossibly low cap rate and doesn't make sense for the average investor. 

This is not to discourage the determined investor, but I only think it's fair that people realize the competition in our market for this asset type. I also want to suggest other ways of getting the 1% rule in the South (which is still achievable), and set some expectations for this interesting market and economy that we all find ourselves in. 

I would love to hear the thoughts and comments of people investing in real estate in the Southeast and get some other opinions! Cheers. 

Literally everywhere in Florida. There's a couple thousand for sale right now south of Orlando near Disney World that are all still making money and because of the buyers market, anyone buying would have huge negotiating power.