All Forum Posts by: Chris Lounsbury

Hey Nolan, It really comes down to if you have 20-25% for a down payment on a home you are not going to live in, and the repair costs to fix it up if needed.  Depending on your cash position, and it sounds like your lender/realtor don't think you have the funds to do this, then buying a house you can live in is going to be your best bet for sure.  I know here in CLT and where I live, Rock Hill, it is difficult to find a 2-4 unit property where you live in one side and rent out the others. 

Some alternatives to this, would be finding a split-level home or a home with a basement that could be converted into a 2 unit. Other options would be buying a home with quite a few extra bedrooms and bathrooms and renting out a couple of them while you live there to help offset costs. Remember, decreasing your housing expense is just as effective to continue saving money as cashflowing from a rental.  

Another alternative is buying a home that you may not love to live in, but would cashflow if rented out. Live there for a year before moving to a new home.  You can then start renting this property after you move out.  This will allow you to qualify for those 3.5-5% down payment homes.

If you ever have any questions, please feel free to reach out. I also host a monthly Real Estate Meetup here in Rock Hilll. It's always great to meet with other investors and bounce ideas of them!

@Nancy Stark when COVID came around in March I was in the middle of refinancing my duplex.  All Banks in PA closed down their loan departments, and I was left keeping hard money on the property until they opened back up.  My hard money came due in May, so I had to extend, and only last month did banks start reopening.  The wait time have been so long though that as of right now, I'm not set to close until September 29th, almost 6 months from when I originally wanted this all figured out.  

With all of that being said, heres what I learned: 

Make sure you can cashflow or break even with the original financing if you need.  While hard money is not ideal, if you can make the numbers work with it, then at worst you kick the can down the road, and break even or make less for the time being. I'm currently cashflowing about $200/month even with the hard money on it, so I can handle not being able to refi right this second.   

If you are putting your own money into the deal, make sure you don't need to get it out by a certain time to keep yourself afloat.  I would also strongly suggest you don't put the rehabs on credit cards, expecting the refinance to pay them off.  

Play it smart for now. These are unprecedented times.  But playing it smart doesnt mean you cant keep moving. If the numbers work, go for it and just make sure you have that second and third strategy in place just in case. 

Hey @Michael Nahm , Do you have a specific application standard you go by? This is the most important piece if you plan on showing them more information. If you have exact and specific standards, for all prospects, then you could release the information to them, however I would still try and remove as much information as possible.  

Instead of saying "you have collections with XYZ company for this much money," you could say, "all of our applicants cannot have more than 1 account in collections, and I am getting a flag that you have 2.  If you want to dispute this claim, please contact ABC credit bureau, which is where we pull all of our information.  We can keep your application on hold while you reach out to them, however we do have to continue processing other applications, and therefore cannot guarantee the property will still be available once you get it all sorted out.  If you are able to sort it out, please submit documentation of the error, and we can continue processing your application." 

99.99% of the time, you will never hear from these people again.

Hey @Matthew Smith I have handled this a couple a different ways in the past and honestly both ways worked.  Our most common way is with our single family homes and duplexes.  For single family homes, we just put the tenant is responsible, and never really get much complaint.  Most people wanting to rent a single family home know and dont mind the responsibility that comes with the privacy. For our duplexes, we usually choose whichever unit is the more desirable unit, and tell them they can rent it for the same price, but would be responsible for the lawn/snow.  They almost always go for it.  What is really only a $25 difference in price between unit A and unit B, saves us $100+/month in lawn services.  

The other option we provide is we sometimes start our rents higher than what we expect for people to rent them at.  So we'll list at $950/month, knowing market rent is more like $900.  In our market, quality housing is a rarity, so people will still inquire about these units, but will request us to lower the rent.  So we will "negotiate" with them and say, okay, we can do $915 if you are willing to take care of the lawn/snow removal.  Again, we come off as doing them a favor, when in reality, we are still above market and the cost savings of not having to hire a landscaping service far outweighs the "savings" they are getting on rent. It provides a win for them, and a big win for us. 

I would think impromptu visits, on any schedule the owner wants, with just a 2 weeks notice, under the assumption that they are inspecting for repairs/damage, would put tenants off rather than incentivize them.  What we have always done, is in our new tenant orientation letter, inform them that we will be entering once per quarter to replace HVAC filters, check smoke detectors, and make any small repairs that tenant requests.  They then feel like we are taking care of the property and them. They know upfront when we are coming and we send out an email about a week before reminding them of the service.  

Hey Everyone in the Rock Hill, York, South Charlotte area! We are hosting our monthly REI meetup at Dust Off brewing in Rock Hill this Thursday, 7/24 at 6:30 PM. All investor types and skill levels are welcome. As always it will just be a casual, networking style meetup. Look forward to seeing everyone out there!

@Rick Albert You should be changing Air Filters quarterly honestly.  AC techs would suggest monthly, but that is probably too much for a tenant most often. It's a perfect excuse to do an inspection 4X a year though. 

I would just be upfront and ask them.  Was it in your lease that repairs must be submitted to owner/PM? If not, they might have no idea that they couldn't hire their own handyman.  If you don't layout the ground rules to tenants, they will treat the home however they please. And honestly, they might be thinking they are upgrading the property. But an upgrade for them, could cause huge headaches for you.  

In the future, I suggest having a move in tenant orientation letter.  Just a quick, couple page letter detailing all of the rules that might not be easily findable in the lease.   I have found this to save me a ton of phone calls and lease violations over the years.  

Hey @Robert Rogers , have you tried the BRRRR calculator? May not be exactly what you are looking for but you could use the refinance section as the potential NOI, even if you don't actually plan on refinancing.

Hey Sterling! There are some great pockets in Rock Hill when you find the right properties.  Rents and home prices have been steadily increasing over the last ten years here, and as RH continues to grow as a Charlotte submarket, I think home and rent prices will continue in that trajectory.  While nobody can truly know what the markets are going to do over the next 1, 5, 10 years from now, I am very excited about the way RH has adhered to its overall vision and city plans. 

If you want to talk more, or need help with anything, feel free to PM me anytime!