All Forum Posts by: Adam Walker

Shooting you a DM Benjamin! 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $270,000
Cash invested: $67,500

@Stephanie Walker @Andrew Lax Wyatt, 

Thank you all for your help so far. I am attaching some comps here so you can see. Almost all of these houses are much older, some not updated, but still similar size to mine. The ONLY real difference I can think of is the fact that my home is not located on the street and doesn’t really have a yard. Most of the homes in the photons below are 2-5 minute drive from mine. 

Also, here is the link to my rental for reference. Adams Rental Property

@Drew Sygit this is what I am unsure of. I am not sure what the property manager would do. My basic assumption is move towards eviction and keep the security deposit. But like I said before this is new for me. 

I wanted advice on how to approach my LTR in Durham, NC that is underperforming and struggling to rent.

I have a 2 Bedroom 1 Bathroom 800 SQ. FT property located in Colonial Village in Durham, NC. This is a brand new construction and is located on a flag lot.

Originally I listed the property for rent around $1,700/month and the interest was very low. Fast Forward to now and it is sitting at $1,450 and we are in the middle of summer and still struggling to find a Tennant.

There have been plenty of showings at the property and the inquiries are plenty (over 100). Unfortunately only about 5 applications have been fully submitted and all of them have failed to show proof that they can afford to pay the rent and provide the proper references.

PURCHASE PRICE AND MORTGAGE:

I purchased the property for $270,000 put 25% down, and it appraised for $290,000.

There is a complete identical property to mine directly behind my unit and it sold about a month ago for $280,000 the same day it was listed. My mortgage is $1,773, so as you can see I am pretty upside down on this property if I rent it at $1,450. The numbers have not been what I thought they would be.

MY PLAN:

My plan was always to refinance the mortgage when rates dropped in the future, so my hope is that my mortgage would eventually come down to around $1,500-1,550 which then makes my numbers closer, as rental prices increase over time.

For reference, I do have an identical property on the south side of Durham which rents for $1,260 and has had tenants in it for 3 years with a renewal just completed. So there is interest in these types of homes but I’m second guessing myself now if they are just to small and not so practical with such a small yard space.

Personally, I don’t love the idea of selling. I have done the work to close on the home in a great market and my strategy is buy and hold. I do like the smaller homes because they are brand new and maintenance costs will be lower. I love my job and I’m not looking to get out of my 9-5 at all. But like I said, I have become more anxious with this home. Is this just short-term fear and mindset or should I sell and look to deploy my cash elsewhere? Also this is just my second property so I am relatively new to the scene  

Thanks everyone.

@Pat Lulewicz, @Vivian Yip, @Stephanie Walker, @Bhargav Hirapara, @Warren Powers, 

This is all great advice everyone, thank you for sharing your experiences and also the realities. The individual has told me they will be sending us the referrals for us to contact so we will see how that goes. They also expresses they could do 2x - 4x security deposit, we will see if that is true or not. 

My current property managers, while they do not tend to work this way have said they would be open to it if our family desired to move forward this way. Does that seem like a wise decision to have property managers involved? To be able to make sure everything is legitimate? We live overseas so we are very much out of the picture from a hands on perspective. 

Maybe I am naive, but if they are giving a large security deposit and they realize its not working and stop paying, do we not just move forward and the lease is canceled? Or is it more complicated than that? I think that is why I am open to the idea of using our property managers, because they know how to handle late rent payments and evictions. 

Once again, thank you all for your help. This is my first time posting on the forum and its really helpful! 

Thank you Vivian and Stephanie for your responses. So here is my other question. What are the risks if the person isn’t qualified? Why would they even try to do something like this if they couldn’t do it? Have you had experiences where people under delivered? I Would love to hear your thoughts. 

Thank you Stephanie for your reply. This is helpful to hear the actual term for this. We do not have an HOA so that will check out fine. I agree with you, I think I just need to make sure the folks asking to do this are legitimate. As I am reading more it seems common but it also sounds like there are plenty of people who don't do it well.

As for doing it myself, I live overseas so I am really looking to be as hands off as possible. I could not imagine running a STR myself or even getting it started. My strategy is to buy and hold these properties, unfortunately I bought this one in January when rates were high. While I know they will come down eventually and I can refinance I am feeling the sting right now, and with not alot of applications coming through I find myself open to more ideas like this (rental Arbitrage). Who knows, it could be a tremendous win. But I think I am always skeptical which is why I am reaching out here...

She did share with me she would furnish the entire house, post pictures, pay 2-4 months of a deposit, and begin with a 12-15 month lease and see how it goes. Not sure if that is helpful for you all reading. 

I have a 2/1 800 sq ft, house in Durham, NC. I have been unable to rent it for about 5 months now and I am not seeing the price point I was desiring when I closed on it (around $1700-1800). Currently property management has it listed at $1450 and still struggling to get a renter in even during the summer season. My mortgage on the property is $1773 and it is a brand new construction. 

Today I was approached by someone who is offering me around $1800-1900/month to rent the property from me to run a short term / medium term rental out of it, primarily for traveling nurses or other business people. They would pay all utilities and maintenance on the property and provide 2 months security deposit. 

My question is, is this to good to be true? Should I have concerns or is this a legitimate opportunity? What are the questions I need to be asking? 

Thanks for your help everyone!