All Forum Posts by: Pat Lulewicz

Congrats on a great find in an extremely challenging market. Share your listing when y'all are up and running; if I'm ever in the area, I love to help BP members out and book their place vs some stranger. We'd love to get a check-in after 6 and 12 months on the market to get some real-world numbers on your success! Good luck!

Is that $200k the purchase price or ARV? Tough to make anything work under $200k (purchase or ARV) in Raleigh/Durham. Fayetteville is a good option. You may also consider Alamance county - Burlington, Graham and Mebane - as well as the Triad - Greensboro, High Point and Winston-Salem.

Very challenging to get Y1 cash flow. If you can find a Y1 breakeven property, you've found something great. The way to work around this is reduce your invested capital and buy something that needs significant work, force some appreciation over a year, and refinance that into a rental loan (BRRRR) so that you can recycle that capital into your next deal.

Alternatively, use the 3.5%-5% downpayment to buy in a location that would be conducive to MTR and STR strategies. This will most likely remove all townhomes given the HOA restrictions on lease length. Once you satisfy the living requirement, try one or both of these strategies to supercharge your rental income...yes, it will take some more work on the front end to set up the furniture, processes, etc. Once you've got that taken care of though, its just a bit of customer service on a weekly basis.

Just my experience, not legal advise. My understanding is that you are the wholesalers of a property that will be double closed to different end buyer?

I always recommend documenting everything, especially if its on-market, so email everything. You can send without POF but any good Realtor will ask for that or a Pre-approval letter to make sure you can actually perform. They they're desperate and just want to make it happen, any knowledgeable seller will ask for it.

Double closing costs will depend on the way the transaction occurs. Since you are "newbies" I'll assume you don't be closing on this transaction yourself but just assigning it through 2 transactions (A-B, B-C). If so, when I've been an end buyer, the wholesaler has transaction funding: third party that has the cash to perform on the first closing (A-B) and gets a fee (like interest) for their money; usually you eat that cost out of your "wholesale fee"...in reality you're flipping the property so I hesitate to use that term. Since its a cash transaction, there's no title insurance necessary (unless transactional funder requires it), so your closing costs will be the usual attorney fee, wire fees, recording fee, etc. Then, when the end buyer performs their closing (B-C contract), they will have their share of the above closing costs. This doesn't include anything their lender requires like survey, title insurance, appraisal fee, escrow account for insur/taxes, etc.

Hey Jon - have you previously invested in RE. Happy to have a conversation about the asset and returns opportunities in Raleigh/Durham, and to differentiate cap rate vs/ cash flow for the different asset types you reference since they don't necessarily apply across the board. Its a tough market in this interest rate environment to make a multifamily property work, but everyone has different goals and would love to hear yours.

@Jason Scott always a big advantage to have the background in the trade/skill that you're pursuing, so I have no doubt you'll be able to successfully grow a portfolio with your background. I own/operate my portfolio in Central NC (and a few STRs by the coast) and definitely think you can have great success in the Triangle (Raleigh/Durham) and Triad (Greensboro, Winston Salem, High Point); I'm sure the same holds true for Charlotte and the Western Carolina mountains. Happy to be a resource when you decide to deep dive into NC.

Welcome to the BP community, David. Shot you a PM as well. Definitely joining at a rapidly changing and challenging time, but its never a bad time to buy RE. Hope we can help you get to where you want to be and achieve yours goals!

There's generally a difference in asset type in Durham vs Raleigh, especially with most MLS flips in Durham being downtown where the areas are still quickly gentrifying, assets are 70-100+ years old, home size is significantly smaller than suburbs and parking can be challenging. These are all huge factors in both the renovation process as well as the resale market and what the end consumer is looking for. It's "much easier" to flip a 1970s 3/2 ranch w/ 1200 sq ft in S Raleigh or Garner vs a 1930s 2/1 bungalow w/ 720 sq ft and street parking in Durham. Especially when the $/sq ft on comps in Durham will be significantly higher than its competitor in Raleigh. You need more meat on the bone when dealing with older assets and it can be tough to find it and substantiate the work-to-profit ratio.

Flip the conversation (pun intended) and if you find that ranch style product in the Durham "burbs" like around South Point, then its a no-brainer. Too broad of a question to summarize an entire city's investment activity just like it's too broad of a statement to speak on an entire state's outlook in one blanket response.

@Catie Sherry could you share, here or privately, the contact info on Nicki?

Hi @Daniah Koujak - I would check with lenders regarding the amount of a HELOC you could take. Someone mentioned 75% but I've regularly seen clients of mine and other investors take up to 90% against their primary. I'll add the caveat that these loans can have multiple risks, but if that's the way to get into a great cash-flowing rental, than you take the parachute off and jump. Love the idea of getting an STR by the coast. Could either use a second-home loan to get a better interest rate, or if you aren't able to qualify for it due to DTI or other reasons, plenty of HMLs that use STR income projections to do so. I've got 2 properties in Wilmington that do very well. If you go that route, a little hack I always recommend is using an airline miles/hotel points CC to purchase all of the furniture and then pay off the card...might as well get as many benefits as you can.

Finally as a friendly reminder, you don't need 100 doors like others to be happy to make some side cash flow. Comparison is the thieve of joy. Put your blinders on and build your portfolio your way.