All Forum Posts by: Gregory Walter

Donnell, 

I'm from NY and almost bought a multifamily building in Queens years ago.  I thank my lucky stars I never did because I wound up in investing in Charlotte and doing much better than I would have anywhere in NY metro.  The deals down here are just significantly better than those in NY.  I will speak to prospects in NC by giving you information based on my experience in Charlotte, the largest city in NC by population.  In my opinion these are some of the major benefits to buying in Charlotte, NC over NYC metro:

1) NC is an landlord friendly state.  Evictions typically take SIGNIFICANTLY less time than in NY.  Tenants know this and it positively affects the ability to collect and enforcement of lease provisions.

2) Charlotte rent to buy ratios are typically much better than those I've seen in NYC metro.  Properties are generally much cheaper relative to the rent they pull in, than in NY.

3) Lower fixed costs - lower real estate taxes for starters relative to your rent roll, etc.

4) Lower variable costs - labor is A LOT cheaper here.  

5) Less stringent code enforcement.

6) Less maintenance - milder weather, and younger average age of homes make for less maintenance.   

7) Diversification - low entry price to buy property allows and investor to manage risk by buying properties in different neighborhoods instead of putting more eggs in one basket.

In additional to the benefits I listed above the city is growing so fast that homes rent very quickly, often times before the sale of the home.  There is a renter culture due to so many people moving her from somewhere else that its possible to get tenants that enjoy renting rather than renting just because they can't afford to buy.  I also think the price have a lot of room to appreciate due to the relative affordability of housing relative to household income in Charlotte.  Charlotte is one of the fastest growing cities in the country and I don't see anywhere else where you can great cash flow and the opportunity for growth like here. 

If you'd like to talk about it further feel free to message me.  I'd be happy to help.

Many tactics.  Two common ones: 1) Find a mentor to work with to show you the ropes.  2)Link up with a strong real estate broker that specializes in working with investors, preferably someone that does his own deals as well.  You want someone who is experienced from multiple ends of a deal and walks the walk, not just talks the talk.  

Does anyone work for a bank or broker, or know someone who can write

1) mortgage loans for refinancing investment property in NC or

2)LOCs for investment property in NC

where the owner already has 6 financed properties?

I believe FNMA guidelines disqualify the #1 and #2 just seems hard to come by with the number financed properties I have and in this state.

I can cold call banks but I figured I'd try here first.

Asking which areas will offer steady appreciation is like asking which stocks will appreciate.  You can form an educated opinion based on trends but throwing darts at a board may prove to be more accurate.  The problem with the hot areas it that the future growth may already be priced into the purchase price.  Areas fall into favor and out of favor for very unpredictable reasons.  No one has a crystal ball.  Everyone buying on the merit of anticipated appreciation is speculating.  On a side note, I am speculating that Charlotte will continue to do well overall due to population growth and the value it offers in terms of weather, location, lifestyle relative to other cities.  I speculate in neighborhoods based on infrastructure projects and changes in demographics but changes are often times unsteady and I know that if I pick 10 different areas to buy in, some will do better or worse than I expected.  

I generally just wait until after the auction and put an upset bid in on the 8th or 9th day. The only benefit to winning at the initial auction is the bid increments are smaller than those required in the upset period typically $750 on cheaper property and a percentage (I think 5% but don't know off the top of my head since its not often I bid on property over 150k). I've found that nowadays the price paid on auction property does not properly discount the property for the likelihood of latent defects that an investor won't be able to find out about until after committing to a purchase. Properties are bid up by private equity firms that are willing to pay a premium so that they can market the fact that x% of their properties were acquired through foreclosure acquisition which makes uninformed investors feel like the fund is doing good by getting the property at supposedly bargain basement prices. Often times the property will sell for more at auction than it would if it was listed property in the MLS. #InvestorOptimism

NC has very strict laws about practicing real estate without a license so watch out for that.  You should probably read section 93A-1, 2, and 8 of the NC General Statues.  Its online, if you google it it'll come up.  They are not that long either.

If its for more than a year it should be recorded, not registered.  Some form of consideration would be required to make it a contract, otherwise its just a promise.  Beyond that, I don't think so.

If you are looking to buy and hold property, I strongly urge you to look outside of the North East. The age of homes, and code enforcement climate in the northeast creates so much potential for a big liability down the road if your forced to bring the house up to code. The snow, and cold winters ware on a house much more than the mild weather in a place like NC or Texas. Cost of labor for repairs and maintenance is much higher in the NE as well.

NC is a landlord friendly state. The real estate taxes are absurdly low by north east standards.  The homes are newer.  There is a constant supply of new tenants with good paying jobs with all of the relocation to Charlotte (it is 2nd fastest growing city in the country). I have done phenomenal with my own rentals and now work mainly with investors, many from the North East.  I'm originally from NY and started doing deals on long island and in queens before seeing the light.  

Before I started to look in Charlotte, I never though there could be such good deals.  I thought if there were deals like these - someone would bid up the price.  Well, prices are going up but so are rents and Charlotte is still a great place for rental real estate investors.  Take a look and if there is anything I can do for you let me know.

Rent.  If you don't have enough money to buy multiple houses you want to make sure that the house you settle in suits your long term location preferences.  You don't want to buy a house and regret it because you'd rather be living in a different neighborhood.  

I recently took the MLO prelicensing course and was told the Fannie/Freddie selling guidelines (professional literature for underwritters) was recently updated to address income for owner occupants who intend to have boarders or roommates that pay rent.  That would lead me to believe it may not be consider mortgage fraud.  Best to be up front about with your MLO and ask him to ask the underwriters about their take on it.  I'm not a attorney and a lawyer may know better but if your not making a misrepresentation or omission on your application, I don't see where it would be considered fraud.

Markets are different. If your in a market like Charlotte, its usually not a matter of what the seller will take, its a matter of if you bid is going to be high enough so your bid is not outbid. Those guys that said THEY gotten bids accepted at 44% implying that they have some special sauce are something else. My BS meter is ringing. If a property sells at 44% of list price there is probably some circumstance that lead to a better offer not being made. In the end its not the percentage of list price, its the value of deal that matters. Your not bidding against HUD, your bidding against other buyers anyway.