All Forum Posts by: Evan W.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $255,000
Cash invested: $8,000

Put 5% down on a 4bd/2ba SFH flip with ADU in the backyard south of Raleigh, NC (negotiated 15k seller credit that made my cash invested effectively zero). I rented the 4 bedrooms up front individually, and lived in the ADU for a year while still bringing in profit each month. Moved out February 2022 to pursue next house hack. Over 100k equity, and 17k NOI after renting the ADU last year. Appraised at $375k and closed on a HELOC in July 2022.

What made you interested in investing in this type of deal?

The numbers worked. Cashflow estimate was huge with 5 total rentable spaces.

How did you find this deal and how did you negotiate it?

MLS with my local agent

How did you finance this deal?

5% down conventional loan for primary residence

How did you add value to the deal?

I added value by negotiating 15k seller credit, and creating a room rental model that doubled the rent potential.

Lessons learned? Challenges?

Trust your gut (the way you feel around them) when vetting potential renters. I made the mistake of renting to someone who showed me red flags from the beginning. The energy and attention it sucked out of me was not worth the extra month of rent.

Agree on prices with your contractors up front - unless they are organized professionals (most independent guys are not), they will usually bid you high with the first number. Tell them what you can pay. It's always a negotiation with these types.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Dana Ben with Dana Ben Realty Group is an agent in Raleigh who owns a couple investment properties. She will hustle for you if you are open with her.

Hey friends!

I have a decent rent by the bedroom tenant lead flow in Raleigh, and often have my bedrooms full or availability that doesn't align well with potential renters. I wanted to reach out and see if there are any other rent by the bed investors or house hackers who would be interested in joining a referral group where we could share our leads and qualified renters with each other. That way we can keep our funnels pumping in leads without losing good valuable renters! I'm sure we would find other ways to help each other as well!

Let me know if you'd be interested, or if you just want to connect with a fellow Raleigh bed investor!

Warmly, Evan

@Kenton LeVay I've flirted with the idea. Just look at where it's landed @Victor Steffen. 

@Kenton LeVay I know Alcove does rent-by-the-room via the arbitrage model. There's more profit in arbitrage, but less opportunity to syndicate and partner on deals. RBTR management seems like a good opportunity to take on yourself if you want to add value and stand out from other investors.

@Mario Valenzuela Thanks for sharing your thoughts on this. The FHA laws are the same for all states as far as I understand - legal addicts are actually a protected class. I will have to get creative and hope she is at least somewhat cooperative.

Hello BP family,

So I've found myself in a difficult situation in my rent by the room rental, and the fact that it is a rent by the room house makes it much more pressing.  Turns out one of the tenants I just signed has a pretty serious prescription drug problem, which has just forced her to be taken to the hospital by an ambulance after her roommate called 911.  Both personal references were obviously covering up the truth for her and there was no mention from most recent property manager.  The story was that she was on Disability for a bad back that was holding her out of work and had been living with her daughter since her divorce.  She wanted to move out of her daughter's house because her daughter got married.  I just learned that her daughter had actually kicked her out of the house for her drug problem.  This tells me that this has been going on for long time and has probably refused rehab.  I already know where I have made a couple mistakes in my own due diligence here & missed some red flags, but the reality is that we have signed a 12-month lease (that she has no intention to break) and I know that a legal drug addiction is not grounds for eviction.

Thinking my best approach is to try to genuinely help her and possibly find a more suitable living situation (may be very difficult because of her addiction).  I doubt cash for keys will work because she is covered by Medicare/Disability, and also has $1500 coming in every month.  Money is not enough incentive for her to have nowhere to live. Still brainstorming...

Would greatly appreciate any insight or prior related experiences you all can offer.  Thanks!

Hey @Igor S. Who did you end up going with for your rehab? Were you happy with the results?

I have been following this as well. The uncertainty sounds like opportunity to me especially if you plan on renting your primary residence. The restrictions will likely only loosen from here

 And you're exactly right @Michael Douglas. There is not much going on as far as enforcement.

Michael, welcome! That is awesome to hear man! It takes some strength to make these changes. I actually recently moved back to Raleigh from Columbus and got a SFH under contract in Garner (13min south of downtown Raleigh). I run a short term rental/Airbnb management business, and can tell you that you are definitely in the right place for your strategy!

I would suggest buying post-move if you are serious about getting here. It is going to make the process a lot easier and less time-consuming for you. I was shopping and analyzing deals for over a month, but as soon as I physically moved myself to the area and started touring in-person, I had a property under contract in 4 days. Granted, I am a bit of a minimalist as compared with others so it was fairly easy for me to pack up and leave, but being here gave me a sense of urgency and ripped me right out of "analysis paralysis."

As far as where to look for STR success, there are lots of awesome places to be in Raleigh and I think you will likely succeed regardless of what neighborhood you're in. It will largely depend on your budget and personal needs, but within the belt-line, Cary as long as you're reasonably close to I-40, Southwest Raleigh, anywhere West Raleigh between downtown and the airport, will serve you best.

The main reason I ended up in Garner is because of my budget. It's definitely not the hottest place to be for STR, but it's a up-and-coming town just a short drive from most places. I'm going to be renting by the bedroom for my house hack in Garner - essentially what you already do except long-term stays. If you want to discuss further, shoot me a profile message. I'm here to help. Good luck man!

@Corby Goade Yes you're right, very competitive market. So competitive that it is standard to provide a 1% due diligence fee (non-refundable) to the seller. I lose out on $2k if I walk, but the seller is also forced to disclose these issues now if he wants to go back on the market without fixing them. I think I have some leverage heading into slow season as well.

Yes, I am working with an awesome realtor. She will be negotiating on my behalf before submitting anything in writing, but I wanted to get some different perspectives from experienced investors on BP. Interesting that you say the only material fact is the mold... do you mean that getting it treated is non-negotiable? What about the small ponds on the roof that have shown damage to the skylights in master bedroom? And the HVAC not working because the drain pan keeps filling up. Do you mean that these other issues are just not typically viewed as "non-negotiables" like mold presence in the crawl space/joists?

Appreciate your input!