All Forum Posts by: Gregory Walter

Congrats...Been down the road of working with contractors that will have someone else sign off on the work - has never worked for me in nearly a half dozen attempts.  Best bet IMO is find an actual and legitimate GC - one that uses ironclad contracts and will throughly qualify and take responsibility for all subs - thats what his fee is for, he is a general contractor, contractor being the key word.  If the contractor can't fulfill the contractual requirement of the job he probably shouldn't be your contractor, except in the sense he's doing work himself under your GC. Your main guy, that is contracting for the work, should be able to put his name on the line and if he can't do that he probably shouldn't be your guy.  

I can't imagine being invested in real estate and only getting a 10% annual return.  You'd likely be underperforming the stock market and have more work and risk.  Let me show you the light:

Two cities in North Carolina are among the fastest growing cities in the county - Charlotte, and Raleigh.  Both these cities are very landlord friendly in that rents are high relative to home values, and in other ways. Homes are newer than rust belt cities and the climate is mild which makes for less maintenance expense and less emergency situations.  Default risk is much lower than in other states due to landlord friendly laws that make eviction easier, and shorter, usually weeks, instead of months like other states.  Default rates are low due to a good economy.  Home prices are trending and appear to be continuing in that direction due to the quality of life, growth of the city, and good economy.  I think if you'll run the numbers and do some research you find these markets to be a healthy alternative to other markets for buy and hold real estate.

Your schedule E should reflect the interest portion of your mortgage payment, not the full payment. In residential lending they are more concerned with debt service coverage (albeit calculated via monthly debt to income ratios rather than DSCR like for business loans) than profitability. They should probably add back the components of your mortgage payment and deprecation on your schedule E and deduct the full amount of your mortgage payment as a starting point.

That being said based on the way you described it it sounds like they are double counting your mortgage interest in the ratio.  I've found that many bank "professionals" are glorified retail employees with little or no business background.  Find a new MLO that can read a simple form and has more knowledge of calculations for underwriting guidelines.

Fort Mill is a place with a high quality of life and decent access to Charlotte by way of a major highway.  Keep in mind with lot of available land and new construction picking up in the area a home you buy now will be competing with new homes eventually on resale which will affect market value of the home.  I only buy in fully developed areas for this reason.

It depends on where you family member works and what you consider to be attractive qualities in an area.  Feel free to PM me if you'd like and I can help point you in the right direction.

Good deal.  95K is a lot of money to tie up to only bring 1200 a month in rent in such a landlord friendly market as Charlotte.  The rate of return on your money will determine how quickly you double the money you have invested and that will increase as you lever up to a point.  If long term cashflow is your goal, it makes sense to snap up good deals on properties while you can lock in good long term financing at low rates.  With less money in the deal and more cash available to do more deals you'll have flexibility to build a wider asset base to generate income and cash flow.  I'm a local investor and broker in Charlotte.  Let me know if I can help you out in any way. 

Depending on your situation, the business structure may likely have minimal impact (if any) on your tax deductions, and overall tax burden at this point. Your might pay less tax by setting up additional business entities (an LLC or Sub S Corp) due to having higher expenses related to setup and in the end you might not even beneficial from it a P&L standpoint.

Feel the same.  I think HB1 hit us a little bit on the rents side of things.  Also, more qualified renters are buying so there is attrition in the rental market.  For investors like us, might be time to rotate to something else.  There are opportunities to add value in rehab properties in areas where move in ready, modern style properties are hard to come by, catch up on deferred maintenance, or chip in with a few investors to do larger deals, or diversify into other markets, or asset classes. 

There is downside risk in your plan, especially in option B.  What would happen if your units not only don't appreciate but lose value?  The amount people spending on housing relative to their income is quite high in Seattle and as a result I think you have some headwinds.  If you do a bad deal in the Seattle area it could hold you back in your plans when you move to Charlotte, which is where you have the opportunity to money much quicker.

Charlotte is one of the greatest if not greatest real estate markets in the US.  I think you'd be better off using your Seattle salary to plant a flag in Charlotte.  The rental deals in Charlotte are much better then those you're likely to find in Seattle.  The deals you described are quantitatively poor relative to deals you could do in NC.  Look in doing a deal in Charlotte for sure before you make a decision you regret.

Go with Charlotte.  I did and have done very well.  Prospects on the horizon are even better.  

I'd avoid anything in Cali - really tough to evict tenants and it changes the whole dynamic as a property manager.  I'd avoid the major cities in NE in general, older buildings and harsher weather leading to more R&M.  

There are exceptions but from my experience it seems to me like code enforcement is a lot tougher in the NE and in the South code enforcement is either less stringent or more reasonable.  The code enforcement agents in Charlotte have seemed very reasonable in every instance I've dealt with them. 

I've scouted real estate in almost every major city in the US however I haven't been to KC.  Part of the reason is there is nothing that made it stand out.

Charlotte is one of the fastest growing cities in the county, a day trip away from the beach or mountains, and has great weather, low crime, tourist attractions, and a great diversified economy. I think that it will keep growing for a while. NC laws are very landlord friendly as well. Great place to invest in real estate. That and the reasons above are why I moved here. Seriously consider Charlotte and if you do decide on Charlotte, private message me. The REI world is a small world even in a big city.

There may be other disclosures depending on, among other things, how often the private party lends.  Dale Fussell in Charlotte or B&K might be able to assist.  Dale Fussell handles a wide array of real estate work.  B&K is a large firm.  Both have NC offices.