All Forum Posts by: Evan C.

@Chris Davidson Ha! Yes I do and thank for reminding me to update this! Taking the advice from the forums I requested the inspection report for some additional info to write a better offer. Well...good thing I did. Inspection report revealed the owner had updated ONLY the interior areas visible in photos, like the floors, kitchen, bath. He did not touch some epic structural issues, roof issues, water/drainage problems, an unlocated buried oil tank, other leftover oil heat infrastructure, some apparently DIY electrical arrangements, some apparently DIY roof repairs in the attic space, etc. The list was long. My entirely non-expert assessment was that I was likely to spend nearly as much putting it into good condition (MY good condition, I guess not the sellers') as I would just building a new house. Resale and rent did not appear to justify that effort, nor do I have the capital. I passed on this one.

@Mike Neff Hi Mike! I've worked with Saunders Real Estate, which has a PM arm as well. I'm sure there are several viable options but we worked with Saunders to buy our first investment in Winston-Salem. We worked with Holton Law for the closing, though I honestly can't say how they compare to other firms. Certainly everything went fine and it was a good experience. Still working on the second investment there now but can't make the numbers work so far on what's available. Looking to increase leads and save up my capital. 

Great discussion here. Getting good info on LVP flooring has been a challenge so this is helpful. Just wanted to chime in with our experience with CoreLuxe Engineered Vinyl Plank 7mm (Honey Mead). We installed in a basement with concrete underneath and it's been amazing. It replaced a cheaper stick-on flooring that came with the house and got damaged by minor water ingress in heavy rain. The CoreLuxe looks and feels amazing. It's distinguishable from hardwood, but not far off. The basement is used as a playroom and it's held up great. Bought back in Sep 2020 for about $2.99/sq ft.

Thank you @Chris Davidson and @Todd Rasmussen! Good points from you both! We'll see how this goes.

OK so there's a 3/2 with about 1300 sq ft next to a local hospital in a bedroom community of Greensboro and Winston-Salem, NC. It's been back on the market 5 times. Seller wants $95k, down from $99.5k. It's been on market nearly 300 days. It works for me at $80k. I think it would rent for at least $800. Problem is, listing agent notes suggest buyer has rejected lowballs before. What sort of offer could be made that allows seller to get (near) list price while reducing the effective price paid to near $80k?

For example, I seem to recall an example given on a BP podcast one time in which the offer was for list price with seller crediting back an amount at closing to reach the buyer's actual required price.

Interesting listing agent notes at the bottom.

Here's my analysis:

Purchase: $80,000
Closing: $6,000
Loan: 25% down, $60,000
Loan rate: 4% conventional 30 yrs 1 pt assumed

Estimated rent: $800
Taxes:$80/month
Insurance: $40/month

Repairs, Vacancy, CapEx all estimated at 5% each, $40/month each, $120 total/month.
Management: 10% or $80/month.

So bottom line:

Gross income: $9600/year
Expenses: $7272/year
Cash flow: $194/month or about 7% CoC ROI depending on how much I renovate. This isn't spectacular but fits my available funding and strategy.

Notes about the property:
-Adjacent to local hospital, so I think vacancies will actually be very low.
-Stucco siding
-Crawlspace foundation
-Fenced yard
- Window unit A/C
-Good interior condition, basic finish but new kitchen, mostly new baths. House was last bought very very cheaply in 2017, so this is like a prolonged flip for the owner.

Listing agent Notes:

NO OWNER FINANCING I believe it will not qualify for FHA due to the type of windows*...Reasons for listing back on the market multiple times for various reasons. #1 lost financing, #2-3 wanted unreasonable repairs in the seller's eyes, #4 was a buyer that couldn't live in a house with lead based paint( even though it was on the outside on a room inaccessible from the inside of the house and seller agreed to remediate), #5 was an investor that wanted to lowball after inspection and never asked for repairs, only a discount.

To me it looks like getting list price is important to seller but there's room to negotiate other details. Part of me says write the offer and he can just say no, but don't want to waste my agent's time. But he can't say yes either if I don't write the offer.

*I don't honestly know what is meant about the windows and FHA financing. Hoping it only applies to owner/occupiers.

Investment Info: Single-family 3/1 ranch style in Winston-Salem, NC.

Purchase price: $78,500

Cash invested: $37,800

What made you interested in investing in this type of deal? Cash flow with some appreciation likely.

How did you find this deal and how did you negotiate it? Through MLS with our realtor.

How did you finance this deal? Conventional, 25% down.

How did you add value to the deal? Painting and fixing throughout house, plus a decent kitchen reno and cleaning/painting storage room.

What was the outcome? A nice looking house that rented within a couple weeks and generates better than $350/month net of expenses/management/reserves.

Lessons learned? Challenges? Thankfully nothing major. We initially thought we could add a bath, but that turned out to be impossible due to one part of the foundation being slab while the other part was crawlspace. We had to do foundation repair too, but again it was less than it initially appeared.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others? Yes! Joey Miller with Saunders Realty and Property Management in Winston-Salem, NC. Justin Briles on the PM side managed the reno and leasing. Plus Jake of All Trades for the reno, he did a nice job duplicating a concrete countertop that came with the house. 

@Melissa Dorman That's fascinating. I didn't even know that was possible. Thank you for the explanation!

@Andrew Postell, wonderful post, thank you! Well organized and particularly useful to those with only a few conventionally financed deals.

If you don't mind, can you explain how you split a note in half and recollateralized one half and what that means? 

Originally posted by @Debbie Partain:

Originally posted by @Evan C.:

@Victoria Knutson, I invest in the Triad area (Winston-Salem, so far). I love the Triangle area though (Raleigh, Durham, Chapel Hill). The price points are higher but the economy is stronger. I grew up in NC and it has so many options for investors. 

I just moved to Raleigh a few months ago I'm originally from NY and also looking in the triangle area. Would love to chat with you if interested

 Of course, happy to compare notes! I have little on-the-ground knowledge of Raleigh myself these days but it's definitely shown steady growth for a long time. I'd love to invest there. Message me if you have any questions.