All Forum Posts by: Troy Gandee

@Koren Shoshan It doesn't seem like a bad deal. Especially not for a primary residence. The taxes will be much lower than an investment property, which will be helpful.

It really depends what market you're in, the immediate area and the condition of the home. 

Cap rates and values different significantly from Charleston to Columbia to Greenville, so he ROI will be different in each market. It also looks like at least $995 is the market rent for the units in good condition, so you should be able to bump the under performing units up a bit over time.

In the Charleston market, it's almost impossible to find anything at the 1% rule anymore, so not likely you can get the seller down that far. We're usually closer to a .75 or .80 purchase price to rent ratio (ex. $750/$800 in rents, purchase price of 100k). I would probably try to start in the 420/425k area, but if all the mechanicals are good and I can easily push rents to 1k+ without much work, 440k could be a good buy. Again, I don't know enough to tell you for sure, but these are generalities based on my market.

@John Semanchuk I was afraid that would be the answer. I used to broker a lot of these downtown, but it's gotten really difficult with prices, interest rates and parking requirements. This is why a lot of people are switching to that corporate model like you mentioned. Best of luck to you, man!

@John Semanchuk best of luck!

@John Semanchuk My understanding of that situation would be that they'll only allow the permit on 1 TMS and that unit must be owner-occupied. I would think they wouldn't allow the others to be rented short term given that they're all separate and distinct properties. They're pretty helpful down on George St, so they'll give you the right answer. The exception could be if it's unincorporated, but that's pretty rare these days. Even then, the County has some pretty restrictive rules. Even Town of James Island has the same owner-occupancy restriction as City of Charleston, I believe.

Thanks @Lindsey Johnson!

@Will Gaston I can take a run at it. Essentially, it has to be your primary residence anywhere in the City of Charleston. Even the STR overlay only allows non-owner occupied full time STRS in properties that are commercially zoned or have commercial applications. Depending on where he lives or what his plan for the property would be, it could be a challenge downtown. There are some exceptions, but it takes quite a bit of finesse with the City/County if it's an outlier.

@Raf Pinero We can certainly help you o n the Realtor side, but I will say that finding deals with enough spread to BRRR have been difficult in the post-covid market. Values have shot up, labor is more expensive and rates are high, so there are fewer and fewer deals that can truly be BRRRed these days. I've done quite a few and many of my agents have done them, so we know the process well, but it's not as easy as it was prior to the market running away.

@Justin K. I can't give you too much advice on this other than to do a little bit of research on how the property is taxed and how the county/municipality would treat the taxation. If you qualify for agricultural taxes, which are usually much lower than residential/commercial taxes, they may not allow you to collect any rental income as that would be a commercial activity. You could convert the taxation back to residential or commercial, but you'll have to pay what are called roll-back taxes, which can be pretty brutal depending on how long the property was agricultural in nature. This is why you see a lot of operations that are multiple TMS #s in SC. An owner will often subdivide multiple parts of a farm in order to make all the taxation and zoning comply with their needs.

@Mark Shippie I just replied to another post similar to this a little while ago. Weeks & Irvine does a lot of sub-to deals, but there has been a huge surge in BAD training on how to do it correctly, so a lot of attorneys refuse to touch them now. Especially if certainly terminology or methods are mentioned. Make sure you're only calling real estate attorneys and only call the ones who seem to do a lot of business. Have them HELP you make the deal work.  

@Eric Mcginn is correct. @Jonah Deuerling We're an attorney state. We don't use title companies. We use closing attorneys. They're effectively the same. There are quite a few. I know Weeks & Irvine does a lot of creative finance closings, but I will warn that there has been a tremendous rash of bad operators trying to pull off really sloppy creative finance deals lately. Many attorneys are more weary of these deals than they used to be. You should ask the attorneys how to do it properly before you send them any deals that could be messy.

@John Underwood Unfortunately, most of West Ashley is City of Charleston, so they have to your primary residence in order to get the STR permit. There are exceptions if you can find a property that's in an unincorporated area, but they are rare to find and still require approval by the County, which has limitations. North Charleston does not have any owner occupant requirements, which is a big reason there are so many there now. We've had ours operating in Park Circle for about 6 years now. It's one of the best performing assets we have for the capital invested. However, the market in Park Circle specifically has become quite saturated with STRs over the last couple of years, so we're seeing vacancies beginning to increase.