All Forum Posts by: Steven Griffith

@Clay Maddox

Clay, I feel your pain. It's happened 3 times to me over the last 6 months. Just crazy. Where are you finding the distressed deals? The MLS? Or a Wholesaler? Thanks!

Hi @Pete Silan,

I own rental property in Charlottesville and have had a slew of hospital-related or grad student clients. Like everywhere, the market is HOT. The problem is also compounded by a lack of inventory. For rentals, duplexes go like hot cakes. If you see one, be ready to jump ASAP.

A few weeks ago, I put in an offer on a Single Family Home, with a basement that had been turned into an apartment. Home was zoned R-1, but there do appear to be many of these pseudo-duplexes. My PM told me they manage several nonconforming homes, so from a rental perspective, maybe consider finding homes that have a Full basement with apartment, or unfinished basement that you can finish so your kids can live there while also bringing in some rent. But even these pseudo-duplexes go fast.

The home I mentioned above had an asking price of 375K. I offered 383K. The house was listed on Thursday and they had 9 offers by Sunday. Nine. My bid did not win, even going over asking - the market is just crazy right now. Best guess is that home may have gone for near 400K or up (I had an escalation clause). This was by the hospital, on the bus line, etc. If you want to talk more about Charlottesville, areas to look for/reconsider, send me a message and we can set up a time to chat.

@Matt Goldstein

It depends - what state is your primary home located in? But honestly for a HELOC on your primary, most of the big banks offer that. Your options really only become limited when the house is no longer your primary, which is why I'd encourage you to consider doing this before moving

@Matt Goldstein

One more point of clarification - the initial purchase price of your home doesn't matter. All that matters is what the appraisal value of your house is - or rather, what the bank says it's worth.

@Matt Goldstein

Yes, you can get a HELOC after you refi. All that will matter from your refi is the new loan amount. So if your new loan amount is 185K, and the bank appraised your house for (let's be conservative, based on your estimated sales price) 250K, then your HELOC amount will be 250,000*90%=225000. 225000-185000=40,000. So you could access about 40K of your equity. Keep in mind the HELOC works kind of like a credit card - you have access to the money, but don't have to use it all, and you don't pay anything until you start drawing those funds. Again, shop around on HELOC rates, and try to find one that let's you access the most equity. At least, that's what I would do but then again I'd rather keep the asset. If possible. Does that make sense?

@Matt Goldstein

If I were in your shoes, I'd refinance to 2.75% and keep the asset. 2.5% if you can find it. Then, I'd get a HELOC while the home is still my primary for the highest amount I could find (I've seen 90% LTV advertised on primary homes) before moving. Then I'd rent the house for a rent that can cover the HELOC payment if fully drawn and mortgage. If you can rent the house for 2K, and be $750 in the green before Capex, vacancy, etc, then I'd do so. Use the HELOC to access some of the equity and find another rental, BRRRR, whatever your preference is. But that's just me. North Carolina has some great, but competitive, markets. Good luck!

@Tony C. Try TD Bank or Huntington Bank. Their LTV isn't as good (75%), but another couple options. Search the forums too if those don't work. Someone made a list a while back of all banks that provided HELOCs on Rentals and shared it. it was very helpful!

@Tony C.

Yes - Pentagon Federal Credit Union. They provided me a HELOC for my rental. Back in April. Their rates are all online - 80%LTV, 10/20 draw/repayment period, they cover closing costs, and 4.75% interest. 10yr draw requires interest only payments. Those numbers may have changed, but that's what it was for me.

Hi @Michael Douglas,

I'm biased, but Raleigh-Durham-Chapel Hill is a great area!  Congrats on your impending move!  There is a BP meet up that occurs once a month - once you're here, I'd encourage you to get involved to build the network!

I don't want to come across as negative, but just know that STRs within Raleigh City Limits is difficult as the outgoing City Council passed some incredibly restrictive covenants in the summer of last year specifically in regards to STRs.  Further, as of the end of 2019, some additional restrictions were: 

1) The homeowner must live onsite of the STR (no living next door or somewhere else in the city); 2) You can only rent out up to 2 BRs max of your home to 2 adults and accompanying minor children; 3) No whole-house rentals; 4) STRs cannot have their own kitchen space; 5) Homeowner must keep a record of all renters over the past 3 years; 6) Backyard cottages (or other Accessory Dwelling units (ADUs)) can NOT be used as STRs; 7) You must notify your neighbors and apply for a permit to operate as a STR.  Google "Raleigh Homestay Rules" for a full list.

Now like I said, this was the outgoing City Council at the end of 2019. The newly elected City Council held a preliminary vote in March 2020 to change and modify these rules to be more in favor of STRs, and decided at that meeting to review the rules at a later date. To my understanding, this included allowing ADUs to be used as STRs and no longer requiring you to notify your neighbors of applying for a STR permit. However, you still need to apply for a permit. Interestingly, there was some fierce infighting going on, but then Governor Cooper signed an update to the state's Vacation Rental Act (VRA) which prohibits local cities/governments from requiring STR owners to get a permit. Now the City of Raleigh is still requiring you to apply for a permit...how that jives with the Governor's update to the VRA....well, that will be decided in courts, eventually.

Of course, that March 2020 vote was just a Preliminary vote to determine if there was a desire to change those rules.  By the end of March (1 month after that vote) COVID was in full swing, and I haven't seen or heard anything since.  So as of now, the restrictive covenants are still in place.

That was a very long winded way of saying: the STR market in Raleigh is in flux and is currently not very favorable to investors. Be aware that there's no telling what's going to happen. You may consider looking in Chapel Hill/Carrboro, as that has traditionally been, and continues to be, a market that looks much more favorably on STRs. I don't know as much about Durham, but some of my network told me they tend to follow what Raleigh does.

Quick disclaimer - I don't currently own any STRs (I own LTRs), but it's a market area I've been exploring and researching extensively. Again, not trying to be a Debbie-Downer, but just wanted to make you aware that the STR policy in Raleigh is tough.

@Mike Wall

I live, and invest in, Chapel Hill as well as other college towns. Glad to connect!