All Forum Posts by: Troy Gandee

@Martin Grodzki Łatę to the party, but I would check the major MTR/corporate rental sites like Furnished Finder and just see what other folks are getting for similar properties in your market. There is quite a bit of nuance to it and some tenants may reach out to negotiate based on the length of stay and if they have a per diem limitation, so there's usually some margin with these. You should be able to get a good baseline checking the major sites. Also, I believe you can check Airbnb and VRBO for 30+ day listings only.

@Quentin Butler Stop by one of our REI Central meetups. We have a main meeting the 1st Thursday of each month and then a sub-group meeting the other Thursdays of the month. I'll be hosting our Landlords meeting tonight. We usually have around 100 people in the room at our 1st Thursdays meetings.

@Kerri Forrest Here is SC and other coastal markets, we're getting absolutely battered with insurance issues on condos. Regimes usually do their best to budget for insurance renewals, but insurance has been spiking so much year over year that it's almost a guarantee they're going to have a shortfall on the budget when the policy renews. Then they usually need to charge special assessments to raise the funds for the renewal amount. We're also seeing a lot of regimes suing builders and contractors for construction defects if they discover chronic issues, which can take years to resolve. For some reason, it seems a lot of buildings are under litigation due to significant capital expenditures. Either of those things can make a property "unwarrantable" in some circumstances and many lenders won't touch them. Even a standard special assessment for an insurance gap or run of the mill capital repairs may scare buyers off. 

@Michael Miles Aside from the tax implications like these other fine folks have mentioned, the actual transfer is very easy. You'll generally just have a closing attorney do a quit claim deed. They usually require some consideration, so $5 or $10 is standard as a "sale" amount. Then there will be administrating and recording fees to account for. When I've done quit claim filings, it's usually anywhere from $250-$500 per property.

@Kevin Hintz It's property dependent, obviously, but last year, I sold one a street back from the beach that they're cash flowing. I think they put down around 20%. And I believe they're going to be looking for another one pretty soon. You just have to make it more exciting than the competition. A lot of the beach rentals down there are pretty outdated and don't provide many amenities. The flood insurance has also been extremely unpredictable at any of these beaches, so that's a bit of a curve ball.

@John Kirtley It's definitely gone up a lot in value, but you can compare the values to Folly or Isle of Palms (Sullivans isn't really comparable) to see the future growth. IOP and Folly were both sleepy little boho beach towns just like 20 years ago. Now they're full of 5-10m homes. Edisto is on deck to be next. You can see huge homes being built all over the place there now.

@John Kirtley Most of the Charleston beaches have become too expensive to cash flow. Many of them now have very restrictive permitting requirements.

However, I have a real soft spot to Edisto Beach. A lot of people haven't even heard of it. It's our least developed beach. It's a little ways away from Charleston, which has kept it off the radar, but it's starting to become a more significant beach destination. For my money, I'd look there and let the market bring you up. It's not long till it looks more like Folly or Isle of Palms there. I've sold quite a few in that area. 

I recently sold one I had on Seabrook Island because the club/regime/HOA were frequently changing the rules and making it harder to operate smoothly.

It's definitely gotten more difficult in South Carolina to invest. Prices have surged due to the supply strain. I'm not complaining. It's been great as a Realtor and good as an investor on the sell side. It's just exceedingly difficult to find deals that will cash flow well now. This is more so related to properties in the "cities" and not necessarily tertiary market.

SC is still a very smart market for transplants, though. Home values are still quite reasonable from a national perspective and our economics are very well diversified. Charleston, for example, has been growing in pretty much every sector, especially ports, logistics, manufacturing, tech and professional services.

@Brandon Vukelich Same here. My partner and I would still do it when the seller was made abundantly aware of the situation and it was the right solution for everyone involved. However, for the last 5 years, we almost never went into an acquisition/disposition with that strategy as the goal. We would only go that route if it was the best option. We generally buy the property ourselves because that's what our marketing says we intend to do. Then we wholetail or flip it from there. 

I'm not saying all wholesalers are bad apples, but I have seen way too many vulnerable homeowners be taken advantage of for this not to a problem. It was just a matter of time. Part of the issue is that a lot of these wholesalers will immediately market or list a property they don't yet own for like 50% more than what they have it under contract for. That definitely brings a spotlight to that practice. The REC and the opponents of wholesaling frequently use the term "equity stripping" when they refer to the practice as we know it. 

I'm not stating that it's inherently wrong, but aspects of it have gotten out of control. Especially in a market like Charleston where affordability has become a huge pain point in recent years.

@Sean McDowell @Jay Hinrichs When the wholesaling legislation first passed in June, the general consensus was that wholesaling was dead. Most attorneys in Charleston refused to close any more assignments. Then a couple of the more maverick attorneys felt that the legislation was a little loose and that you could continue assigning as long as your went about it very delicately. Basically, you couldn't make it look as through you were selling the real estate. ONLY the contractual position. I personally felt that was not the clear intention of the bill, but they were willing to stand by it. They also made the parties sign some kind of disclosure stating they were doing everything legally. 

That lasted a few months, but the REC recently released a new bulletin clarifying the legislation and basically saying that bill was meant to stop all forms of "wholesaling" as a business practice. They were pretty firm in the bulletin to say that it needs to be ceased ASAP. This does only apply to residential properties, so commercial and raw land can still be assigned the way it used to be. Assigning contracts as a legal instrument when necessary is still fine, but not as a business practice.

Gonna be interesting to see how it affects the investing community here, but I've been encouraging people to just take the title for the last couple of years knowing this ban was coming. And there are a couple of folks in town who are suggesting using installment contracts as workaround, as well.