All Forum Posts by: Greg Fitch

Hi John -

Are you thinking about getting a HELOC? I'd recommend checking a variety of banks like BB&T, SunTrust, a credit union like SECU if you qualify, etc. and go with the product you like the best. It's a commodity so transaction costs will be low. It may be a bit premature to build a relationship with a banker until you have a longer track record, but a second buy and hold will help get you there.

Ben, first of all, congrats for having a job. Not only will you learn invaluable life and job skills but having a W2 also opens up important loan opportunities. I would recommend you prepare for making your first multifamily acquisition, by: 1) check your credit and improve your scores if necessary, and 2) start talking to banks to find out what sorts of lending products they offer. Some will lend against the property and not your own ability to pay. That's what you want. Avoid the large banks; they are a hassle to work with. Find your smaller, locally headquartered banks that love small businesses. And 3) save, save, save whatever you can from your income. Squirrel away enough for a downpayment on a smaller property. 4) Have you considered a house hack? Check out Bigger Pockets for information on that. But in brief, if you buy an 2, 3 or 4 unit multifamily and live in one unit at least initially, you can qualify for a FHA loan and only 3% down. That is a lot less money to save.

You don't need to be a commercial broker to do any of this, and in fact you may want the advice of such a broker.

You might also consider cheaper markets outside Charlotte like the Triad or Spartanburg. Multifamilies in the latter are going to better cash flow.

Good luck!

My experience is that investors have poured into Durham in the past two years, pushing prices up dramatically. There's a lot of money chasing single family now. In some neighborhoods I'm not confident returns will be sustainable if the housing market slows down -  you might get 'caught' which is a bad place to be. Keep in mind too established investors there also going to have a lock on good contractors (although you are based in Raleigh so you have have a good team already). You may have better luck partnering with an experienced investor in Durham than going it alone, at least initially.

Durham varies dramatically from neighborhood to neighborhood so I recommend walking them to get a feel for where you want to be, and while you are at it, go to open houses on Sundays and talk to the agents - if they are trapped in an empty house for hours, they're often happy to chat with you.

There are also some wholesalers active in Durham here on Bigger Pockets; you might try to establish relationships with them. I have not had much luck there though.

Dawn or Brandon - if you know of multifamilies in Raleigh (NOT Toledo!) let me know. Of particular interest are B/C garden apartments inside the Beltway with renovation/repositioning opportunities. I know there is much demand for them.

Michael I think Greensboro and Winston-Salem are good places to look for cash flow positive rentals. Multifamily assets are cheaper than surrounding markets and yet the area's economy is strong and well positioned for light manufacturing, distribution, fulfillment etc. job growth - disproportionately renter profiles - being located on I-85/I-40.  Good luck.

Hi Charles - dont get discouraged! I would suggest talking to local banks like Bank of NC or Fidelity Bank. They'll have more flexible underwriting criteria than national banks for multifamily. 

And yes it is very difficult to find cash flow positive rentals in the Triangle. Chapel Hill in particular is tough. You might also look at the Triad where there are better returns and only an hour away.

How interesting. Thanks Chris Martin for sharing the information. It gave me the opportunity to read up on these institutional buyers. This area east of the Raleigh beltline is a more speculative sub-market, and if I owned properties there and believed that we face a decent chance of a market correction soon (which I do), I would be looking for ways to selectively reduce my exposure there while increasing cash reserves. Those areas dropped in price a lot during in the last recession since buyers (the few out there) bought in neighborhoods located closer to jobs - inside the beltline, inside the Triangle, etc. A building boom was following by a buyer bust. I think those dynamics are still at play.

Hi Nathaniel -

Congrats for being the BIC for a 45 agent office. That's a lot of responsibility! Because of that, you may more connected than you realize. I'd suggest talking to loan officers at the smaller local banks in the Triad - they will have more flexibility in their underwriting criteria than the big banks, might be willing to spend more time with you assembling a good loan if he or she feels a relationship can develop, and will be more in touch with the local marketplace. They may even know of active deals to share with you. Ask folks in your real estate orbit - closing attorneys, other agents, investors - for referrals. I'd gravitate to loan officers with deep roots to the community, i.e. grew up there, attended school there, on local boards. Folks are usually happy to share positive banking experiences with others. You'll get a few names pretty quickly.

Anatoly - I've also been following pricing for multifamily units in the Triad. The Triad is a different market than Charlotte and the Triangle where I live. As you know housing reflects job growth and pay levels. The Triad was particularly reliant on textile and manufacturing jobs and the overseas exodus of those jobs was sudden and severe. They've reinvented their economies pretty successfully but jobs still skew lower wage. Also in Winston Salem had some corporate headquarters but mergers too many out of the area, impacting the local communities in several ways. The Triad is still growing and as part of the booming Raleigh-Atlanta I-85 commercial corridor it has a secure job market which makes me bullish about investing in multifamilies there.

Ben, if you have ruled out townhomes at that price, to me the best values seem to be single family homes in East Durham and adjacent Cleveland/Holloway. With their proximity to downtown, those areas are seeing lots of development. Look at Canal St. for example. Downside is for the price you'd probably be looking at renovating the interior especially the kitchen and bathroom, and also quality of life, with sidewalks often lacking and crime an issue. But you could rent a clean, updated house in that area very easily, and values will go up over time. Hope that is helpful.