All Forum Posts by: Levi Bennett

Who are the successful wholesalers? lol

Hey guys, I'm trying to gauge interest in 20+ unit apartment building in West Asheville that has NOT been built, but will be under construction by spring of 2021. The new buyer will take delivery 2022 and enjoy the benefits of a reduced price due to the lack of rent history. Given that this is an extremely desirable and high-rent area, I feel there is a tremendous upside, if you're interested in reviewing an executive summary, please PM me. 

I welcome any feedback at all on this. Thank you in advance!

Is Asheville and environs real estate still close to the top of the market, or is it leveling off a bit? Obviously, this is a speculative question and nobody has a crystal ball on this issue, however, I think close consideration of the fundamentals are important in making a decision about this. First, look at the overall growth rate. Then, look at the growth rate supporting the sector you intend to invest (Are you looking at rentals, if so what price point, etc..). My personal observation having invested in Asheville considerably this year, and having met many others who have also, is that Asheville is not even close to peaking. Take millennials for example, most of them want to own a home, but cannot get a mortgage because home affordability is accelerating beyond their ability to get qualified for the type of home they want. Meaning there is a massive pent up demand for affordable housing (sub-300k). So even if the market takes a "turn" for the worse, there is still going to be a huge demand on this market in Asheville, Charlotte, Raleigh etc.. Second, and this is unique to Asheville, is that boomers are retiring there in massive numbers, and buying with cash more than other comparable markets, inflating prices everywhere. This does not appear to be slowing as the boomer generation retires. Personally, I'm very bullish on the Asheville market. Having sold 2 houses sub 300k in the municipality this year, and having to deal with multiple offer situations during the height of Covid within hours of listing, I do not see this as market that is going to suffer that much from a market correction.

Does it help when investing to buy with cash? Obviously yes, although, creatively financing when possible will allow you to stretch your investment and potential upside, but yes, cash offers have won out in every single one of my deals that I have sold in Asheville. 

Are there many/any bank-owned or lien properties available? I specialize in these types of deals, and actually go to the Buncombe Co courthouse twice per month to keep tabs on these, I can tell you with certainty that foreclosures are WAY DOWN. This is a conundrum as more people are default this year than ever since 2009, but I think the reason is all the government assistance, and the extremely high demand for sub-prime loans. Personally I expect a wave of foreclosures in 2021, but right now, there is almost nothing available as banks and consumers are taking advantage of Covid forbearance allowances. 

I'll be closing on a funding property for a 1031 exchange mid-January 2019 and wonder if there might be any opportunities to choose a replacement property there. Since this is an investment (maybe retirement home in the long-run) which I must hold for at least two years, I don't want to buy at the top of the market. Again, nobody wants to buy on the top of the market, but it will always appear if it's at the top if it's the highest it's ever been, or goes through any kind of minor market correction. This doesn't automatically mean it's "at the top" as you have to consider the LONG term trends, and the fundamentals driving the market. Depending on what and where you want a home, there are always options. 

I'm also looking for a real estate agent who might be available to discuss and help with the process if you could make a recommendation for this type of situation? I live now in Colorado and have a 1031 agent in place. Florida-born. So I'm not a realtor, I'm an investor with experience in that market. 

Lastly, is Asheville as charming, amazing and wonderfully diverse as it seems? Would you live the rest of your life there, assuming it remained so? The short answer is yes. You will always have people that are bitter or have a bad taste in their mouth for whatever reasons, but living in Asheville offers opportunities that is not offered anywhere in the world. It is what you make it. Coming from Colorado, you will find aspects of Asheville familiar to where you live now that you won't find anywhere else on the East Coast, but with all the advantages of living in the South. 

Hey guys, 
 
CONTEXT:

I'm not totally new to multi-family, I've been involved in wholesaling 5 different MF projects (from 5-37 units), but new construction is a little bit of a new thing for me when estimating what the property should sell for. I guess it's this very speculation that keeps many investors away from constructing new apartment buildings less than 70 units (let's be honest, you don't see these being built anymore). 
The short version of how I got here is that I have a small development team (we've worked on other, smaller projects together) of an architect, engineer, general contractor (that builds large hotels and retirement developments), and me for sales and analysis and general quarterbacking. We've got a land owner interested in subordinating the land to a loan, the bank has pre-qualified us, and we're ready for permitting as we just got city-planning approval for the site and plan. 

HERES THE GOAL:

Everyone in the group wants to cash out at the end of construction. We can be very competitive on pricing for various reasons, but I don't want to sell the group too short. The market cap rate for small apartment buildings in the area is about 4.8%, we are willing to sell for higher than that, but obviously, we have to speculate on rent. I have been conservative on rent estimates, but I want the new buyer to feel like, if they're taking a risk, they're going to get rewarded for it. What is reasonable to you guys? My initial gut says 1% cap adjustment in favor of the buyer to purchase post-construction at 0% vacancy. Simply filling 24 units up with leases (in one of the hottest rental markets in the South), should net about $1,000,000 in equity. 

I have attached the executive summary for you guys to analyze, and I'm happy for any feedback. I have not begun distributing this, I'm trying to get some honest feedback on the project before aggressively looking for an investor. Thank you.

Click here to view opportunity summary PDF

Thank you in advance to the BP community for your input!

Hi @Dashiel C Neimark

I've been a realtor/wholesaler/rehabber in North Carolina and Florida for over 6 years. I'd be happy to chat to with you as I've lived in the Orlando market (4.5 years) Jacksonville market (4 years) and Charlotte (6 years, where I live now). These are markets I know very well and I'm more than happy to catch up about it.

what website?

I'm going got try and make this one. 

I think the main thing that most people overlook are the underlying fundamentals in the Florida Market overall. Tampa is not unique in having insane increases from 2011 to today. Understanding that Florida is a tourist destination, and also a retirement destination for most of the United States and Canada, when the crash hit, it hit Florida much harder than other states. 

Housing prices deflate and inflate much quicker in Florida than they do relative to the rest of the country. This is not unique, this has happened to FL (CA too) at every single major housing swing in the last 40 years. Also, you have to consider that a lot of these houses are affected by multi-family units, particularly condos which take an especially hard-hit when the market goes down, and show steep rises when the market goes up.

As for the market being overcooked? It's too hard to say, there's a lot of speculation in both directions, but I can tell you if you look at the fundamentals you'll learn a lot about community. I live in Charlotte North Carolina, fundamentals here show that there are lots of families that cannot afford affordable housing. So no matter what happens to the rest of the economy and to the country, if housing prices go down, they will not likely change much on the sub $300,000 level. That's because there are lots of people still waiting to buy a house and the supply is just too low. So as supply becomes available, it will be quickly absorbed by a younger generation waiting to buy. 

I lived in Orlando for 4 years selling real estate. As long as the economy is doing well, Florida will likely see a continued sustained rise in housing prices as the boomer generation is retiring at record levels, and are continuing to put downward pressure on Supply levels in Florida, creating more new construction opportunities, and rising housing prices. There's only so much coastal land and city centers, and they will continue to be the most desirable areas.

What you observed in housing inflation in Florida is typical. But it also followed one of the worst housing crisis ever in Florida's history.

I hope this makes sense. 

Here's the situation:
I have the land under contract at a good price, I have a GC who is invested in the project and brings a 25 years of multi-family construction experience to the deal. I have an architect retained with over 50 years of experience and is intimately familiar with the site. We have spent around $20,000 in reports and surveys to prepare the property for new construction

The main issue I'm facing is that I don't think we can build this on speculation because our construction loan interest will put us upside down if it sits on the market more than 30 days. Our desired profitability is significantly lower than other developers simply because we want to make this site work at this point, but only if we can find the right partner to commit to buying on the backside. 

Our land is in a gentrifying neighborhood in a suburb of Charlotte, NC and I think the real value is for someone who wants a long term hold, as land in this location (6 blocks from a revitalized city center) is rare, not readily build-able for multifamily. 

How should I market this property?

Just curious, what would the interest level be by people on here to take a 1-day crash course on how to get deals, get started wholesaling, with subject-to's, and creative financing? I'm doing some market research because I HATE these online coaches that sell you a $4000 course to teach you something that worked 10 years ago, and then they try to sell you on a subscription saying you won't succeed without it... what if you could get a no-gimmick, no more sales, just a 1-day information crash course that would be fun and funny and be hosted in a really great environment (not a hotel conference room) with food provided.. what is that worth to everyone?