All Forum Posts by: Ryan Daigle

Anything below a 7 cap for that market may not make sense... if it's stabilized. Value-add cap rates tend to be lower since there's theoretically a lot of opportunity there for you to take advantage of (and the seller/market knows it). If you feel good about your underwriting and aren't fudging occupancies, expenses, etc... and it shows the returns you and your investors require then I wouldn't let the going in cap dictate your decision.

@Alfred Uda if you don't have a focus yet, I imagine you have something that looks like a goal in your head? What would you consider a success? Getting a SFR that cash flows? Flipping for profit? BRRRR?

Start with the endpoint and work backwards to where you are today. What do you need along that path at every step, and do you have that thing yet or not? If no, then figure out what you're doing to have to do to get it (raise money, find financing, network, learn more, etc...).

If you lay out an ideal path, maybe we can help fill in the gaps to get you there.

Hope that helps!

@Ben Kirchner regarding the tiny home investment, you may want to look into the River & Twine tiny house hotel in Rocky Mount. Same concept in an easter NC town might be a good comp?

https://www.riverandtwine.com

@Ashley Mitchell don't do it! NC has several of the top ranks MFH markets in the country, including Raleigh-Durham, the Triad, and Charlotte. Plus we have a great, low-tax, business climate which is powering our decades long positive population migration trend.

Hi @Alfred Uda – welcome to the area!

If you want to move faster, you need to know where you want to go first. You mentioned a few different strategies above, are you focused on one? If not, which approach do you feel is most attainable given your current resources and knowledge?

Investment Info:

Large multi-family (5+ units) commercial investment investment in Mebane.

This complex contains 12 units configured as a series of single-story brick duplexes and underwent extensive renovations in 2015. It's a C+ class property located on quiet cul-de-sac and has two off-street parking spaces per unit.

What made you interested in investing in this type of deal?

I really like the Mebane area. Situated within driving distance to the major NC metros of Greensboro and Durham, Mebane has experience exceptional growth over the last decade (in excess of five times the nation average) while still maintaining good rental affordability. Additionally, the units are in good condition and are under market by a significant margin.

How did you find this deal and how did you negotiate it?

This deal came off-market via a PM that knew it was already under contract, but the buyers were having trouble obtaining financing. When the original deal fell through I was able to offer w/ all cash and close within 30 days, thus avoiding the financing bottleneck.

How did you finance this deal?

Unlike past acquisitions, I did not open this deal to outside investment. I was able to use a private money lender long term loan w/ initial IO period to lock this up for my personal portfolio. I put in cash for reserves and expected rehab, but was able to finance the rest. Upon stabilization I will look into refinancing opportunities to extract 100% of my invested capital.

How did you add value to the deal?

The plan is to implement professional property management, clean up a small amount of deferred maintenance, and implement light rehabs on tenant turns to push rents up to market.

What was the outcome?

TBD

Lessons learned? Challenges?

Be patient! This deal took a lot of waiting for other parties to complete their process before I was able to get in front of the seller. Stay with the deal, stay active in your communications to express continued interest, and don't get discouraged.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Happy to recommend a property manager in the Triad/Triangle area of NC if anybody is looking.

@Patrick Menefee they do have front footage - about 20'-30'.

These are apartments in Mebane - between the Triad and the Triangle (an area I really like investing in).

@Patrick Menefee I have plenty of setback on these so I don't suspect that will be an issue 🤞

What's the process and cost like subdividing a single parcel into multiple?

@Patrick Menefee got it - thanks. I have a 12-unit made up of (6) duplexes so was curious when I saw your approach.

Congratulations @Patrick Menefee!

Can you explain in more detail what the benefit of subdividing the parcel is? You believe when you go to sell it will be easier to sell 3 duplexes to 3 different buyers than one 6-unit to one buyer?