All Forum Posts by: Jiri B.

Figure I would share this article. Take this for what it is..

Raleigh, NC tops the #1 spot for flipping homes. More in this "local" and im guessing totally non-biased article..

https://www.bizjournals.com/triangle/news/2019/01/...

and here:

https://www.realtor.com/news/trends/where-home-fli...

Other top spots:

1. Raleigh
2. Charlotte
3. Orlando, Florida
4. Phoenix
5. Las Vegas
6. Oklahoma City
7. Houston
8. Providence, Rhode Island
9. Atlanta
10. Detroit

@Scott Luetgenau based on what you said, im guessing you would be refinancing the property in your name, not a LLC, correct?

I would recommend talking to a local small banks or credit unions. If you are purchasing / refinancing property in your name, that will make it easier. This also depends on your personal credit score, but i think you should be able to do 80% LTV which would give you another 15k. 6% right now does not seem that high although i think if you work with smaller local bank / union, you might get closer to 5.5%-6.0% right now. I don't have any good experience with large banks / institutions for investment properties so i always work with local small lenders.

I typically first find a new property, then do the closing and refinancing at the same time. It saves me time and money. I would also make sure to talk to a tax attorney to make sure you won't have any tax implications etc. It is all in details.

Also make sure you can get approved for the other property. There is a limit on how much mortgage you can pay if its all in your name. 

If you are going to live in the property as owner occupied for at least one year then yeah you can do FHA with 3% down. But if you are planning on renting it out then you have to do conventional with 20% down. You can't get FHA and then rent it out few months later. Thath would be considered a mortgage fraud (fine and jail time). I'm not an attorney nor mortgage lender so dont take is as an legal advice. Just from what I know or what I have seen..

@Douglas Middleton other then what was already said there are few other things i would also consider:

1. The long term value. As you mentioned, manufactured homes don't appreciate as well as typical site build and lenders and insurance treat those a bit differently as well so those are the main reason i personally stay away from them. Even if they look great on paper.

2. I know this is very location specific, but Wake Forest 3beds 2baths manufactured home renting for 1400/mo? That seem a little high to me. I would make sure you did your comps correctly. That can change a lot. Most manufactured homes around WF rents around 900-1100/mo.

3. Is the property connected to public utilities or is it on septic tank and well? Those will be additional expenses you should always account for. For a rental property, it would be owner who pays for maintaining those. Again, this will eat a lot of your potential profit.

4. Land value is great, but it is not tax deductible. Depreciation is a big factor in long term investments.

Hey @Kimberly Scott what a great age to start with investing in real estate! It will get very easy to get discouraged but as long as you keep pushing hard and make it all work, you will get there.

From what you said, here are few things that i would look into more:

1. FHA 3% down - for investment property you will need to put at least 20% down, conventional loan. Or fix and flip loans.

2. 15k including rehab is very little. Do the math:

   - closing cost 3k

   - 4k rehab (and this could be as little as new carpet, paint, and small fixes). If you go into something larger like new bathrooms or kitchen, you will be in the 8k-12k range work cost

- this leaves you 8k out of your 15k budget which is about 40k purchase price (80% LTV) which is very unlikely to get anything in the triangle for.

3. As you said, and that is very good observation and very true, the less time you have hands on, the more its going to cost you.

So for your situation, i would recommend going over your finances and see if you can pull more cash, i would say if you want anything local, you could get a condo or a townhome for about 60-120k that does not need much work to get it rented. Then get a good property manager and let that be your first investment and see how that all goes for you.

You can get something cheaper in other markets out of state, but you get what you pay for. I would make sure you know the market well so you know it will increase in value over time and that it would be easy to rent.

Those are the main reasons i invest locally.

@Scheryl McDavid that's a great plan! I would recommend starting with your finances first. If you haven't done so yet, talk to a lender to see what you can actually afford to buy. Most new investors get very surprised when they learn how much they will actually need to put down. Typically, 20-25% down for investment property. Your income will also play a role on how much mortgage you can actually afford. 

Doing this first will give you a price range to start with.

I invest in those areas as well and the most easiest properties are the median houses - 3beds, 2baths, 1400sqft for SFH. Those typically rent around 1300-1400/mo and you can purchase them in decent neighborhoods like in Wake Forest for around 180k thus giving you the best cost / income ration you can get in current markets.

Townhomes are great too and better for a lower starting cost, but you have to watch out for HOA, those can be pretty high.

Not sure about driving for dollars, unless you have lots of time and enjoy driving a lot. I would start with looking at Zillow or similar to get an idea of what the prices are, how much the rents are etc and see if you can find something that will work for you.

Good luck to you!

Thanks @James Wise @Tiffany Alexy and @Andrew Kerr for the input! 

I think even if we had the exact same economic situation as we had in 2010, i still wholesaling as it would not work anymore. To me, its a dying theme. Smartphones and social media we just in the early stages and it people did not know how or where to find the value of their home. So it was easy to go knock on few doors and make a sale. Now, everyone have smartphones and with all the social media and websites like zillow, anyone can check what their home is valued at. So getting 200k home for 140k is no longer the case as people are more aware.

Also companies like Open Door, Knock or even Zillow now offering direct buy with no showings, hustles, etc. that just makes is too easy for anyone in distress to sell to a more reputable source then just someone who sent letter.

I was just curious if you are seeing the same trend or if just something i made up in my own head :)

Ok, I'm talking about North Raleigh specifically. I get lots of off market deals for one or two hours drive out but nothing in good or desirable locations.

I see bunch of home owners selling directly to Open Door or such but I don't see any wholesalers getting those deals?

Is Open Door the new platforms for home owners to sell directly to? Is it because those locations prices are high and most sellers in those zip codes are too educated and informed to sell for a low enough price for wholesaler to make a profit?

I've been watching North Raleigh for a while but mostly seeing just MLS deals.

Are other investors seeing the same? I don't have enough time to knock on the doors or send 5k letters so im willing to pay for someone else to do that..

Are you having similar experience in more expensive neighborhoods?

@Account Closed I think you are going the wrong way about this.

I would recommend making your rental requirements very clear to all prospective tenants and make sure they understand those before looking at the property. Also make clear there is a fee for the application.

If you specify you do not accept any tenants with previous evictions and you charge application fee I don't think you would get many with evictions. Then ask those questions on the application and do a national eviction report together with other screenings to validate everything that the potential tenant declared on the application.

I make my requirements very clear and if I do get potential tenant that does not qualify, they always ask me about that during scheduling the viewing. No one wants to waste time and money.

There will always be some that will lie on the applications but you catch those with the screening after they give you their information. 

I don't think those reports are free or just available for public on the county website. You need to find a screening service that covers all those reports.

Hope this helps.

Welcome to Raleigh @Cameron Barnett and good luck with your investments!