All Forum Posts by: Pat Lulewicz

Very Challenging to find $2k rent on a $300k property. Usually the location, size or quality of the home would make that ratio difficult. If you did get a 3BR townhome, its likely the HOA on such a townhome is significant where it would bump you CF negative.

You will not find a 3BR in Cary for $300k that's turnkey, other than potentially a condo at time and again, those HOAs will take you CF negative. An exception if you're a cash buyer and the seller preferred/needed that simplicity/speed.

A lot of OOS investors, who recognize investment property as a passive play and retirement vehicle (important distinction), not a vehicle to replace their current job or income level, are not banking off appreciation. Yes - it is incorporated in their underwriting but that's moreso on a market level than a property level. They choose Raleigh, Charlotte, etc (in NC) because it isn't going anywhere. We aren't going through an oil boom and they'll be left with a vacant house in a decade. People will need to rent and their investment property will stay rented. If you are holding for 10-30+ years, why is a "reset coming next year" something that would push you away from real estate investing in either state? You won't need to monetize that home for over a decade, or more.

As far as rentals, CoC, etc, etc....remember that equity paydown and tax benefits are paramount to investing and can usually have as much of an impact on your financial position as the cash flow. They just aren't sexy and talked about. In addition, that appreciation you've referenced has also significantly elevated rental rates and we have not reversed from that mark yet. Continued growth and appreciation of home values will continue to keep rental rates healthy. My perspective: if you cash flow now (current rent and current int rate), you will cash flow in the future (lower rates - hopefully - and higher rent rates).

The standard argument is 5% in a money market. Sure...less after interest tax on your 1040...You also can't shelter it from taxes with depreciation. That number probably won't last for the next decade so you'll be back to square 1 in a few years when that RoR goes back down to 1%-2%. + Equity paydown. Its the trade off of short-term trickle of returns vs long-term cumulative, dependable benefits.

Ive had a lot of guests inquire as to things are pictured, but pushed to the back of the listing. Unlike selling house where you go in chronological/practical order of the home, guests regularly like to see the highlights or MAIN things first.

For example, one of your first 5 pictures is the art work which is already noted in other photos of the dining room. Although its a nice tough, your top 5 is VERY valuable to the first/immediate impression of a guest and could make or break their desire to book. Maybe pushing that one down to the bottom of "cute" photos but less value-add. Same goes for showing the couch twice in the first 5. 

Perhaps push a bedroom photo up to your top 5 in place of one of the above? Any backyard/deck pics you could snap to show where they can relax and enjoy their morning coffee/tea outside? If its dog friendly and fenced, they can see that with the backyard pic as well. Try and get the most bang for buck there.

Talk with an attorney. I am not one, but have dealt with this. I believe you can get an easement agreement drafted so that you and the encroached-on neighbor sign and agree it's fine. Probably the "right" approach would be to talk with encroached-on neighbor, ask about doing a survey moving the boundary to include the encroaching portion, however this would decrease their lot and increase yours. More likely than not, they will want compensation because that's human nature when you take their things. Alternatively, give them a portion of your lot equivalent to the portion you're taking away (effectively makes the property line zig-zagged) so make it equitable. But again, this will most likely only be done while you're under contract and chances are you'll bear the entire cost, so make sure you can/will close first or else you might have some dead deal costs there.

Reach out to other news outlets and see if anyone wants to pick up the story about it? It isn't a large sum in absolute terms, but relative to the rent you made, its significant and I could see someone wanting to pursue a story. Especially if you can provide information on the syndication he's trying to organize, this could have regional/national implications. If you associate his name with an article and its on a reputable website (news) or even just their social media, it's a quick google search for his name by a PM, landlord or interested LP to throw up red flags. Especially if you/PM have photos, videos, police report, etc of the home before and after this guy came through, creates a damning story/video. I'd consult with an attorney before mentioning or including the IRS/collections letters. Not sure of the legality behind finding and publically disclosing this information (mail fraud potentially?)

If you run a succcessful Spa/Salon and can continue to fill seats, why not continue with this arbitrage model? Alternatively, buy your own shop as an owner-occupied and continue the model.

A lot of apprehension and financial difficulty in purchasing in that area + East Downtown (inside the beltline) given the current demographics and economics. You have to have the cash to stick it out as you won't see much if any cash flow, the property will be management intensive, and the runway isn't 2-3 years but more like 10...development is great but remember that these companies are playing the long game of decades not years.

Just approved this week - 130 Kindley was changed from 20-story to 40-story and will be 2-3 high rises. This is a plot of land right next to 120 Kindley called City Gateway Apartments which is a 7-story apartment building with almost 300 units and 121 Kindley called Mira Raleigh which broke ground this month and is expected to bring about another 300 units. This entire area is primed for 5-10 year runway growth.

Don't sleep on the work happening down the SW corridor along US-1 into Apex, and between Apex and Holly Springs The Veridea project just had a new round of plans released and it continues to grow in scope. Lennar is building another few hundred units just north of Veridea. Grace Christian is consolidating campuses and building its new school next door.

@Amanda Barnes what has led you to believe the STRs are not doing well? Do you have a good idea about the cash flow you can expect from an STR strategy vs LTR?

Have you verified the zoning on the duplex? If so - I think it would be a great strategy to do that given the location and still allowing each property to sit on 1.5 acres. There are a number of lenders that will cover a substantial amount of the development costs since y'all have owned the home, and land, for over 12 month and that could help with financing the build costs as those will get high.

Awesome job @Emily Hammer. Takes a lot of courage to buy at our price points! Can't wait to see your success with it. You might try getting referral leads from other MTR/STR hosts who have a few interested parties but can only select 1. Work backward on the websites you mentioned and connect with other hosts/owners/PMs who have a similar product (2-3 bed townhomes and condos) near yours. If you can give them a referral/marketing fee for getting you in touch with a prospect that books/leases with you, could be worth the expense if you get a high quality tenant/guest; all a numbers game

Coastal NC - Wilmington, Topsail, Oak Isle, Holden Beach - are always great options for MTRs in the off season and STR in-season. Western NC in the mountains can provide better seasonality volatility but is also much more challenging regarding restrictions, location, product, etc.

Most PMs will charge you between 15%-30%.