All Forum Posts by: Cory J Thornton

@Gopi Krishna - Local banks are the way to go. They are more creative and able to look at the quality of a deal then determine if they have an apatite for the debt. My guess is, based on the discretion you offered, you're probably looking at a commercial loan product. DSCR is a way to get the deal done, but it will have a higher interest payment, a higher origination cost, and usually a prepayment penalty. I have several properties under a DSCR and it is a valuable tool, when needed. When possible, I try to find a conventional or commercial product.

I have several local banks who would potentially be able to help. Benchmark, Touchstone, First National Bank, First Citizens, First Carolina, Wake Forest Federal, and Providence ... all depending on the location and the deal. If it helps, feel free to connect so we can chat a little bit and then I can try to get you connected with a few lenders with the potential to help. Not all banks entertain all deals ... for example, Truist has zero interest in investment properties. 

@David S Richardson - TREIA has a monthly meeting for STR investors in Raleigh. TREIA

I know several arbitrage operators who are giving up their arbitrage properties and keeping the STRs they own. At renewal time rents are increasing and with STR income dropping some, their margins are getting squeezed.

We have had several clients buy new STR properties in the last six months. The ones that seem to be meeting with success are targeting Raleigh and Durham properties with a good proximity to something in high demand (airport, university, downtown, hospital ...).

We also have seen rural STRs do pretty well. These function more like hotel replacements. There is far less STR data in the areas 45-60 min away from Raleigh, so there is more risk here .. but it is being done successfully.

If there is anything I can do to help, don't hesitate to connect. Best of luck on your RE investing journey! 

@Lynne Gregorio - Sorry to hear about your current situation. In all cases, my first recommendation is to manage to the terms of your lease. Our process, supported by our lease, is If they have stopped paying rent, we notify them that a late fee is due after the 5th of the month. If we get to the 10th without collection, we automatically send or deliver a pay rent or quit notice. This initiates our eviction process. 

If the person in question has communicated that she has moved out of the property and has in writing indicated that she is turning it back over to you, then I would not hesitate to get the place back on the market. If she has communicated that she is out of the property, then I would read your lease and see if there is a clause dealing with abandonment. 

@Pradip Chavan - 

If you are investing for cash flow, then you will likely need to leave a decent amount of equity in a deal if you are targeting things within a 20 minute drive to Raleigh or Durham. These areas are rapidly growing and seeing good appreciation, but the rents have not caught up to support the price. These are towns like Garner, Knightdale, Wake Forest, and Youngsville. 

Cary is one of the highest average household income areas in our market. If you find something for $300k with three bedrooms in Cary, it may not be livable. 

If you are willing to expand your geography to a 45min - 60min commute to Raleigh or Durham, then you can get properties with much better returns, but you are trading location. Personally I think there are a few town that are still under value a little so you may be able to land appreciation and get cash flow leaving less equity in the deal. Places like Kitrell, Wilson, Rocky Mount, Roxboro, Sanford, Oxford, and towns with a similar radius are all interesting places to consider. 

Personally, even though I am a licensed agent, I frequently use realtor or Zillow to run searches. Our local Triangle MLS does not always get access to things in places like Rocky Mount, Wilson, Littleton, and other outlying areas.

Best of luck on your real estate investing journey! If you are in the Raleigh area, Triangle Real Estate Investor Association meets next week on the 8th in Raleigh. It's a great way to connect with a ton of local investors all at once. 

@Logan L. - 

There is not a right or wrong answer for your question. We all operate with moral absolutes as a foundation, but decisions beyond that arena largely come down to understanding the trade offs and optimizing for the result that fits best for your family. 

Each of us, as investors can invest two different ways and both of us be "right." We all have different jobs, different networks, we are married to different people, we have different interests, we have different timelines .... it should make sense that we all have a different approach to how we invest. 

Personally, I always target cash flow because I have a very long term time horizon. Historically the average single family home doubles in value in 20 years or less. Even if I loose value, I don't really care as long as cash flow is maintained. Home value doubling every few decades is primarily a function of inflation, but I personally think the intrinsic value of a home provides a better inflation hedge then other assets like the S&P 500. 

I think there is a very strong case for investing within an hour of Raleigh and Durham and finding cash flow with a high probability of appreciation that outpaces inflation. 

I also think that while nationally they are tracking average rents declining, within that hour radius of Raleigh and Durham the trend will be flat to increasing rents.  

If you ever head into Raleigh and want to grab a coffee/lunch and talk real estate, feel free to give me a shout. 

@Harrison Jones - In persons meet ups are key when you are getting started. In Raleigh I recommend checking out Pints and Properties hosted by @shane 

@Shane Lafleur, there is a monthly Raleigh BiggerPockets meet up you can find here in events, and I recommend joining the Triangle Real Estate Investor Association here in Raleigh. 

I have made some awesome real estate community connections at all three of those events. 

I look forward to seeing you soon at a meet up! If there is ever anything we can do to help, just give me a shout. 

@Iftikhar Khan and @Caleb Henley - 

With our rentals we set the following as a minimum for application approval. 

- 650+ Credit Score 

- Clear background check, eviction history check and sex offender registry check. We run all this through a larger software but before we owned a management company we used Trans Union. 

- Verified income must be a minimum of 3X the rent. 

- Current employer reference must be provided and we must speak with the employer. If they have not been employed at a place very long, then we want the previous employer also. Nothing moves forward until we talk to these references. 

- Previous landlord/s must be provided. Again, we must speak to the previous landlord/s before taking any steps forward. 

- If a pet is involved, there are third party pet verification services that you can contract with to help assess the risk of the breed. They can also do validation for applicants with "service animals." 

- With a pro membership there is a database of NC attorney reviewed documents right here in bigger pockets. You can also work with a real estate agent to lease the property and handle to docs. 

- Our minimum security deposit is one month of rent. If someone has a credit below our threshold, but everything else looks solid, then we will sometimes offer a credit contingency plan where we help offset the low credit score risk with a double deposit. After year one, with no missed or late payments, we will refund half the initial deposit. 

- We we were self managing properties I liked using Turbo Tenant, but I have heard good things about other platforms as well.

Best of luck on your self management Journey! If there is anything our team can do to help, just give me a shout. 

@Daniel Box - I would strongly recommend making the time for some in person networking events. There is a pints and property event hosted by @Shane Lafleur in Raleigh this evening. There is a monthly Bigger Pockets meet up, and I highly recommend getting involved with Triangle Real Estate Investor Association. 

This will put you in rooms full of local people on the exact same journey. Some who are just getting started and some who are further ahead and willing to offer advice along the way. 

I'm always a fan of connecting in person. Would love to grab a coffee, learn about the business you own as well as your goals for real estate investing. 

Hey Andrew - I would be happy to connect and answer any questions you may have. It would be awesome to connect over a lunch or coffee to chat REI, our local market, and of course, property management.

 @Amy Verges - Thank you for giving our team at Raynor Realty your recommendation! 

@Nicholas LaMotta - If you are local, lets set up a time to grab coffee or lunch, discuss your goals, and see if there is something we can do to help. If you want to learn more about our company and how we think, then check out our socials on LI/FB/IG at Raynor Realty NC. I look forward to connecting!