All Forum Posts by: Chris London

@Owen Mitchell

I drove by these 2 when I was checking out a different property in Holly Springs last week. More work than I'm into but I walked the lot, it's right next to downtown and I see a lot of upside. They are 61 DOM and the owner keeps dropping the price. *I have no connection to any of these properties.

221 W. Hickory Ave Holly Springs & 225 W. Hickory Ave Holly Springs

I manage properties in Central Durham and see a lot of opportunities here as well. The neighborhood is rapidly gentrifying, next to a university and walkable to downtown where they are now putting up multi million dollar condos.

Check out:

1000 Juniper St Durham

1212 Dawkins St Durham

@Tikka Koti, Joe Splitrock above just provided the NC Real Estate Commission guidelines on when DD is refundable. Your real estate agent is NOT the person to interpret if this is a material breach, you will need to pay an NC Real Estate attorney to do this. While I have never personally gone done this road it is my general understanding that the chips are not in your favor, unfortunately.

• Speculation = Guessing what the market will do next.
• Facts = calculating actual cash flow on a deal.
• Motivation = my cash in the bank at 0% interest during rapid inflation.

@Daniela R.

Rough math:

$225K (20% down at 3% for 30 years) =$1,000/mo mortgage payment and a $45K+ down payment. +$30K in additional repairs + 1 large bottle of advil.

$254K (price you said for larger and fully renovated house) = $1230/mo and a $50K+ down payment. 

Personally, for a home I'm going to live in I'd rather pay an extra $5K downpayment and an extra $230/mo at a very low-interest rate than come out of pocket $30K for the dis-pleasure of a decent size rehab in a time of labor and supply shortages. I might wait for the next renovated one to come on the market. 

That $230/mo will take about 11 years to equal the $30K in repairs.

@Greg Pawluk we work with a shared living company here in the Triangle.

The benefit is they inspect and clean the property regularly. The downside is the beginning where you have some vacancies waiting to fill the rooms.

@Andrew Curro I think the 1%, 2%, 50% (expenses), etc rules are good starting points and necessary if you are going to be a hands-off investor. However, the more hands-on you are and the better you know the property and avg vacancy rates the more you can adjust these numbers.

For example, in terms of expense, if I'm looking at a townhouse where the HOA covers the roof, siding, landscaping and I know the HVAC and appliances are pretty new I'm assigning a lot lower expense to repairs & cap-x. If I'm in a hot market (like Raleigh/Durham) and I get multiple qualified applications per property the 1st weekend I list it then I'm assigning a smaller % to vacancy. If I manage my property myself I'm not assigning a management fee (although I know many do anyway).

While I buy for cash flow and not appreciation I'll consider taking a haircut on my cash flow (1% rule) if I can find something in the right area where older ranch homes are being bulldozed for $1M homes.

I agree with all of the rules of thumb as a starting point, just make adjustments (up or down) as you get additional information.

@Michael Williams I think you can split it into two categories, knowledge and process.

1) Knowledge, will have some state-specific information, handling and disposition of the security deposit is a good example of this. In your home state of California, you can find some information available to non-licensees on the Ca dept of RE page here. For non-state-specific examples many here on BP find the Brandon Turner books to be a great resource as well as searching these forums. NARPM if you have a licensee typically but they may have some information avail to those without.

2) Process, starting with deciding on software is a good start. Sometimes that means picking simple free landlord software available on Zillow or Apartments.com or investing in something with more horsepower like AppFolio (what I use) or Buildium etc. There are lots of good posts on this site that discuss software. Then I would create a file/binder and start documenting the steps starting with company values, fee structure, running comps, creating e-mail templates, advertising and leasing, pet deposits or fees, creating work orders, handling of maintenance requests, paying invoices, lease renewals and so on. My binder is 259 pages and growing.

Hope that helps and lmk if you have any additional questions,

@Suzanne Player Applecross limits the number of rentals in the development. You do NOT want to invest here.

@Nathan Yarnell 

In God we trust. All others must bring data.

Here are your tax benefits, make sure you understand these as a dollar value and not just a quote from your agent.

1) Mortgage Interest: pretty easy to figure. In most cases, you are offsetting your rental income.

2) Depreciation: spread usually over 27.5 years.

3) Property taxes: the average in your home state of Kansas is 1.37%

4) Repairs: sounds great but you still have to pay for the repairs.

5) Other: milage is a good one. Advertising doesn't usually add up to much. Insurance, utilities if you pay them. uncollected rent (hope that doesn't happen) and probably a few others.

@Mel Park locals will tell you that Holly Springs followed by Fuquay Varina is the next Cary/Apex. They are relatively newer areas with newer construction so you are limited on your ability to find flips (although there are some). IMO one of the best places to find potential flips is going to be Central Durham. Here are a few examples of each:

Central Durham: 1005 N Hyde Park. $159K, 820 sqft brick bungalow w. electrical and other repair issues. 36 DOM. 

Central Durham: 403 Red Oak Ave. $170K, 1005 sqft.

Holly Springs: 225 W. Hickory Ave. $174K.Seller looking to sell as package deal w/ 221 W. Hickory Ave. $164K. Both are right next to downtown and Womble Park.

Fuquay Varina: 6832 NC 55. $230K, 1.37 acres. The seller is asking for a quick close so at 20 DOM I'd make an offer that works. You are on the highway which is not great in any city.