All Forum Posts by: Christian Hansen

@Rob Jones  Hi, as a PM here in the Raleigh area I'll chime in. First, the utility changeover stuff sucks! Theres too many players in the mix. 

I think one thing to remember is that I don't believe you or the PM can set up/create a utility account on behalf of the tenants, they have to do that themselves, as their credit gets checked etc. However, the tenants are obligated to setup and pay utilities by terms in the lease, or should be, its definitely stated so in the Standard Form lease used by most here in NC. So, if they don't it's really the same as unpaid rent and should be charged back to them. But I see where you would want the PM to cut the power at a certain date. On the flip side, I will say that I (as a PM) am very careful to make sure power stays on. Because, if there is an ice-maker or ice cubes in freezer with no power they melt, leak out and can really damage the flooring (depending on type).  Also when its 100 degrees outside its not good for the house to get that hot inside. At the end of the day really bad tenants like this will cost you money one way or another, better a $200 utility bill than some type of intentional damage that would undoubtably exceed $200 significantly.

There are a lot of variables here but it does clearly sound like the vetting process really was not up to snuff! That, is of course entirely the PM's responsibility and one that can minimize these situations down the road. I find the lease up process to be a super critical step in the whole lease term going well, for everyone involved.

Sorry you had this experience, feel free to reach out if you need anything.

@Chris Martin Hmmm, yes I see your point. If they are on top of their game then yes I guess they can probably keep it going. I remain skeptical but it's more of gut feeling.

BTW: Thats a fat Walleye! I caught a bunch way back in the Boundary Waters, (?) miles from Canadian border, maybe across it ;-) But they weren't that fat. Good times up there!

Have a nice weekend!

Chris, good points. Yes, what they really are is a flipper I guess with a RE lic, “wholesaler” has, to me, always meant buying at a very low price and that’s not really what they do. That was my main objection to “wholesaler”. But your right they are really just a very large broker/flipping operation. 

That’s my concern with the model, if there is a slowdown I would think their holding costs or purchase price would be an issue. Yes they have control to improve etc. But that’s just putting more $ in the game that has to come back out. 

I think it’s really interesting that we have opposite views on what would happen. It’s really the reason why deals can still be found in the market. 

The process I experienced 2nd hand at my neighbors house didn’t instill much confidence in their model. Obviously super tiny sample size(one house) but a decent neighborhood in Cary so not an outlier in terms of property type. They paid $283k 

New roof

Entirely new plumbing (was polybutylene, but with the copper connections so not bad re: leaking)

Lots of Sheetrock/painting work cause of plumbing. 

Replaced kitchen cabinets and appliances (Cabinets are not very current, very odd)

BUT

Then did not update the master bath(1995), nor the 2nd bath.? The eye catching rooms!

Back “yard” was and still is a disaster,

Listed for $315k  

I know someone offered full price, then asked for 8k in repair $. They said No, it sat another 5 months and various subs would show up randomly to do stuff, more $ spent, finally sold for $310k. 

I’m thinking if rates went up or economy dipped they might’ve had to sell at $290k and I have to think that would have been a significant money loser, especially factoring in holding costs.

I guess the difference in our thinking is that you feel they may have an advantage in a slower longer DOM scenario by being the owner of the property. 

I think that would be a problem for them. They can’t decide to just take it off the market and keep it like an actual resident homeowner. From what I saw there were clear signs of inefficiency due to scale. They are competing with residential homeowners but are a huge operation that might have more operational costs/$ leakage than they are seeing in a hot market like this.

Anyway, I am not trying to convince you or prove I’m right. Just clarifying my thinking. I don’t have a direct stake in the game, but they are such a big force now and whatever happens it will have a significant impact on the market. As you said, time will tell! 

Cheers!

@Chris Martin Hi, I’m in the Raleigh mkt as well and have wondered about Opendoor. I became very curious when my neighbors suddenly sold their house to them. I don’t know if I really agree they are a Wholesaler in the traditional sense. From what I understand/saw they pay a fairly high price for properties but actually charge the seller(original owner) a bunch of fees. Then do some cosmetic renovations and resell at about market price maybe a couple points below. It seems to me it’s all about the volume and I think they are very vulnerable to any market slowdown. I feel their model is very much dependent on the market being strong with low inventories.

This is not a deep data driven conclusion but based on what I’ve heard from various brokers and by looking at some of the purchase and sold prices.

BTW: RE Brokers hate dealing with them as they are not very responsive, I suspect just due to the volume. But again if the market gets a bit squeezed I feel like they could face some challenges if they can’t keep up the pace and are left holding a lot of inventory.

Would love to hear what you think.

@Maricruz Romero Hello, I'd be happy to chat with you about the area beforehand, unfortunately I will be away during the time you are here. I run a PM co. and have some investment properties here in the area.

@Avi Levine Hello, I run a PM co. here in the Raleigh/Cary area. Hope to connect.

Hmmm, I know typically a lease contract would survive intact after a sale for the duration of the initial term. But, I guess if the tenant agrees to it, it should work. 

If you are a Licensed Real Estate Agent then you might want to double check with an attorney, but if not I bet you would be fine.

@Ray T. Hello, yes I live, work in RE and invest here. Growing area good demand, prices have come up but as everywhere theres still deals if you look hard enough. Let me know if you need anything.

Collect all the details and juxtapose that with what your intentions are: buy&hold, flip, live in, etc.  I would recommend calling a good insurance agent, they can look up the prop, find the type of zone and what that would cost insurance wise AND what limitations there are. Also, remember after a law in mid 2000's if a property is on a designated "Wetland area" you cannot change the footprint and if the property is ever destroyed or demolished you CANNOT rebuild. So the Realtor saying its a tear-down might leave you with a lot you can never build on again! 

As always, gather all facts from multiple sources and make your own call, the amount of misinformation often is greater than actual info ;-)  Good luck.

Hi, Alyssa

I am a broker and owner of a Prop Mgt co here in the Raleigh area. I would be happy to connect/chat and answer question s you might have about the area here. It is a solid market but not full of cheap 2% deals anymore. That's not necessarily a bad thing though as it means its becoming more desirable and stable.