All Forum Posts by: Matt Rothwell

I'm looking to buy a duplex to live in. I've been pursuing FHA loans because I'd like to put as little cash down as possible to have money for renovations, maintenance and improvements. However, the fees associated with the FHA loans seriously make my head spin. The consensus, from calling around random lenders, is that while its not illegal to lend on >80% LTV loans for multifamily properties, nobody does it. That seems crazy to me though, like they'd be missing a huge corner of the loan market.

Does anyone know of any banks that will do a ~95% LTV loan on an owner occupied multifamily property in North Carolina (specifically the Raleigh Durham Triangle Area?)

Agreed about the sellers market right now. I mentioned that it was turning that way about a year ago, and everybody jumped all over me about it. However, every place I've put an offer into (only 6 offers...I guess I'm slacking) in the last year has had multiple bids. The one that I "won" was for asking price, and then the house didn't appraise, I lost the loan, and the cash buyer got it anyways. Raleigh has officially been discovered and the big California and New York money is here. If you don't have 100% cash, you're probably not going to get into the properties that you personally would want to live in.

Also, interesting link there about AH4R, those rents seem to be really overpriced, like Chapel Hill prices! I wonder if people are actually paying those kind of rates here in Raleigh. They seem to be outside the standard deviation according to rentometer.com

The current apartment will not let me do month to month. The best they can do is a four month lease. I'm not sure what is going through their head, it sure as hell isn't logical.

I'm in an awkward situation right now, I'm currently set to buy a Duplex here in Raleigh that I plan to owner-occupy. It has tenants on both sides, and the one that I plan on living in has a lease that expires mid-July. I'm scheduled to close May 1. The issue that I'm having is that my current apartment that I'm living in has a lease that expires June 1, and temporary housing for a month and a half costs a fortune.

What I'd like to do, since the tenant in there is a student, is ask them if they'd like to terminate their lease and move out at the end of May. I remember being a student and trying to find someone to sublet my apartment for the summer while I went to internships or back home, and I would've loved if the landlords at those places would let me move out early. It seems like a win-win for both parties.

I'd like to propose this to the tenant, but the hangup is that I don't own the house yet, I don't close till the end of the month. I asked my realtor to ask the seller's agent if I could talk to the owner and/or the tenant, but the sellers agent just wrote back a snarky email saying that "I wasn't the owner YET!" or something to that effect.

Is there a kosher/accepted way to do this? My agent joked that I could slip a note under the door, but I don't want to worry about harassment charges or anything. What would the folks of BiggerPockets do?

That's right Chris, I've got nothing yet. I haven't been at it long, and this isn't my full time job though. I've done a lot of research and been under contract once, but I haven't really had anything pan out yet.

With that said, I think you're missing the point of my comment. I was just saying that while I loved living there, finding a cashflowing buy and hold property for a reasonable price is harder in Raleigh than in other places I've looked. If I was like the OP and searching out of state to find an investment property, I'd look for the best one, not one that's just okay.

I'm curious, why Raleigh? Don't get me wrong, I loved living there--tons of great bars and restaurants and lots of outdoor activities, but after doing some deal analyses, it's not really that great of a place to invest in for buy and hold properties. All of the magazine articles talking about how great Raleigh is to live in have inflated housing prices in all but the worst neighborhoods, and they're pretty bad. I've been looking at Durham, but that's mostly because I already live in the Triangle Area. I'm thinking that if I was already investing from out of town, I wouldn't be headed towards Raleigh.

I think you misunderstood. Its not former government housing, its housing that was built after WWII. After all the GI's came home, they started popping out children and getting factory jobs, so that opened up a huge market for low-cost real estate development. What was built was cheap, crappy housing to put a roof over their heads. 60 years later, they're all basically falling apart and I'm trying to weigh the cost of rehabbing a crappy house vs. knocking it down and starting from scratch with modern materials, wiring and plumbing.

After my most recent deal fell through, I've been looking around again. In the area I'm looking, there is a ton of houses made in the late 40's. These aren't historic architectural masterpieces, they're cheap crappy houses made to house soldiers after WWII. It appears that they were just thrown up quickly, and never really meant to last 60 years. Some of them are in good shape, but a lot of it is garbage. No ducting for HVAC, terra cotta plumbing under the house, odd electrical setups.

I'm thinking that I could probably pick up a dump of a house in a transitioning area and knock it down to build a new quadraplex. If I buy the current property for $10000, and build a new house for $100,000, I can still cashflow pretty well, renting each unit for ~$625. I'd also have the newest house on the block, which would further set my property apart . Is this realistic? Is a 4 unit, 3000 square foot quad build-able for $100,000? How about $150,000? How much does demolition cost?

Welcome to the area! Always good to have another triangle resident on BiggerPockets

Where is the property located in town? UNC has an awful parking situation, so if the property is not on a bus-line or within a half mile of campus, you're not going to have much luck renting to students.