Base Hit House Hack and Future Mid-term Rental Property

[Wendell Butler]

Investment Info:

Condo buy & hold investment in Charlotte.

Purchase price: $337,500
Cash invested: $30,550

I bought this condo on 12/09/2022 to move to Charlotte, NC to continue my career in real estate. It is in a very desirable area called NODA and should be able to get great rent as well as good appreciation. Charlotte is a booming market and is only continuing to grow, plus I was born here and it always felt like home when I came back to visit (even though I was only here until 2 years old). I am not a huge fan of condos, but this one just made sense. It was recently rehabbed and there is only miniscule updates I need to do, if I want to. Capex and maintenance/repairs are at the bare minimum. It is probably one of the top condos in the complex renovated wise. I purchased the property for $337,500 with $7,500 back for seller credit to do a temporary buydown for my rate (since rates are currently high in the market currently), which I will then VA Streamline IRRRL once rates come down in a year or two. I purchased this using the rest of my VA loan eligibility which allowed me to secure the property for smaller down payment/closing costs, as well as avoiding PMI. I will have a roommate to help with the mortgage costs as I live here. They will be able to pay about half of my mortgage (PITI)/utilities, which is great. The future plan for this property is to mid-term rent to travel nurses. The rent you can get in this area for travel nurses is around $2800 a month and it is easy to keep vacancies very low. With mid-term rentals you do need to furnish the property and include utilities in the rent, so it will be some out of pocket costs for that, but I am living here for a year or two and need furniture anyway. It is sort of like AirBNB and long term rentals combined, but you get higher rent and less vacancy time due to knowing the travels nurses contract periods (3-9 month periods) to plan ahead. It is also less work than an AirBNB. I will leave the furniture I bought for when I am ready to move again. This property should cashflow about $300 a month once I do move out (maybe more if rents continue to increase) after all expenses (mortgage, taxes, insurance, Capex savings, repairs/maintenance savings, HOA fees, etc.). I will manage this myself as mid-term renting is not very strenuous and I will be in the area for a while. This is not a home-run property, but a nice little base hit that is introducing me to the midterm rental market which is great!

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

I was moving to Charlotte, NC and the multifamily market here is very bare and overpriced at the moment, so another multifamily did not make sense numbers wise currently. I had to explore other options, so I found the mid-term rental market to travel nurses and went with that route in mind for the future.

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

I used a realtor that is investor focused and helped me find properties/condos that had good future mid-term rental opportunity. Condos do have rules for renting, so we had to find one that worked with mid-term renting and this condo fit it perfectly. 30 day minimum rentals allowed.

How did you finance this deal?

I used the rest of my VA loan eligibility to cut down the PMI expense allowing the property to cashflow more. I also got seller credit to do a temporary rate buydown to cut the costs for the first few years. I will look to do a VA IRRRL when rates drop down in 1-3 years.

How did you add value to the deal?

It was already renovated and very nice, but I did need to buy furniture for the whole place and make it very nice for future renting. Kind of like what you do with an Airbnb, but with the mid-term rental goal. Making the unit as nicely furnished as possible will warrant higher rental income.

What was the outcome?

This property will be a good long-term hold that will cashflow $300 a month to mid-term rent travel nurses when I move out. That cashflow will only increase with the growing rental demand in Charlotte, NC!

Lessons learned? Challenges?

This market is hard to find deals, but you do not need home runs every time. Get a base hit here and there and in the future they will feel like homeruns! I also learned a lot about mid-term renting to travel nurses which seems like a great play in real estate. Higher rents, less vacancies, and less work than an AirBNB, but a tad more work compared to long term rentals.

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

Yes, I worked with Evans Wright out of Charlotte, NC and also Envoy Mortgage as the lender. I am a Loan Officer for Envoy Mortgage as well, so I am a little biased ;)