All Forum Posts by: Kyle Groseclose

@Rick Grubbs because they are paying to the tune of $125/month with a market rate of $700/month and we need to rehab the properties. The living conditions are not suitable either. 

For others that may view this thread seeking answers... I am hoping for more info but this was a helpful find:

https://www.ncbar.org/media/209959/landlords-and-tenants.pdf

Hello everyone,

My partner and I are under contract on our first property and the units have current tenants that are not under any sort of lease, but are paying monthly(Well below market rate). 

My main question is, where should we go to find definitive documents of landlord/tenant rights in NC? I have found numerous law firms with a bunch of vaguely helpful summaries, but can't seem to find formal state documents. I would like to become a SME in the area so that I can ensure we are in compliance with all state requirements. 

Secondary question is: Does anyone have advice for this particular situation? The intent is to vacate the properties after closing. I have read that in NC you need only to provide 7 days notice to evict month-month tenants... but we intend to give them ample time to vacate because who can get out of a house in 7 days!? 

No problem! I did have a bit more of a thought around this question though and realized I should note that it also depends on your strategy. 

If you have plenty of funds on hand and can afford that extra payment, then in the long term I believe my answer above holds true. 

That said, if your goal is to have each property cash flowing, the extra 4% payment will be detrimental to your cash flow. So do be sure to run your numbers well and make sure that you don’t fond yourself in a situation where you run out of funds and have properties with negative cash flow... because that is a recipe for disaster. :) Your cash flow looks solid though so I’m doubting that is an issue here.

Hello everyone,

Wanted to pop in to ask what everyone recommends for coverage on rental properties under an LLC. Specifically in North Carolina if that matters.

My initial assumption is that at minimum we will need landlord and liability coverage; does landlord cover fire as well? Any other recommended policies, or recommendations on coverage levels?

If it helps, we are focusing on verysmall SFRs or multi family. So in this case, we are looking at two 600sqft SFRs on the same parcel of land.

Thank you for reading!

-Kyle Groseclose

You would be better off finding contractors at a local REI meetup, or consulting a trusted Realtor. Always confirm the terms, but most hard money lenders are interest only payments with a balloon payment at the end. Be sure to check for pre-payment penalties, and extension availability/fees.

For instance; I have one local lender that does 6 month term loans interest only with a balloon and only 1 point origination fee. However after 6 months the loan automatically extends to 12 month and they charge an extra 1% origination fee. A very solid deal in my opinion considering most lenders charge a 2-3% origination fee anyways. Finish your project early and be rewarded! :)

Considering your HELOC is a 4% interest I would personally consider it an "extension" of your mortgage. It is money loaned to you at a 4% rate. Would you pay off a mortgage at a 4% rate?

My personal action would be to continue saving for your next property. I am certain that you can make more than 4% on your money! Go get 'em!

Woops! Forgot to comment on the paint. Coming from a place of "I will never rent something I would not live in myself" I definitely understand her desire to paint. This is one area I would ask for compromise however. Her tastes may not equal that of your tenants. If the paint scheme would generally be considered acceptable I would say save the $ and keep it. The odds are just as good that you could repaint to her tastes and potential tenants will hate it. Now if the current paint scheme is something like neon-green and pink to look like a watermelon, maybe change it to something a little more generic. :) 

Congratulations on starting your journey!!

The recommendation is essentially to always, within the realm of reason and within your boundaries of personal taste, to make your rental "renter proof".

Tile - I personally prefer the idea of using a good looking laminate throughout. Much cheaper overall, looks great, and is all around better for a rental scenario in my opinion. 

Fireplace - Will this be usable? Gas or fire? Keep in mind renters may not be as careful with it as you would be as the owner. If it is wood burning I would personally seal it off as an accent only. Gas is safe enough.

Landscaping - Don't underestimate the landscaping! If your goal is to stand out from the competition; the landscaping is your first impression. There quite a few good looking low maintenance landscaping options. Definitely avoid anything that would require frequent maintenance or re-planting.

All in all I think you have a sound plan. The biggest $ return renovations for sales are typically kitchen/bath. These will definitely increase your rent value/appeal but be careful not to go overboard. I would recommend quarts as it looks good and is durable. You don't want renters damaging your brand new granite counter tops! 

That said, if you are looking for rental value: look at the possibility of altering the floor plan. Do you have room anywhere for a second or half bath? Another bedroom? Does it have a basement or loft that could be converted into a bedroom? Bed/bath additions can have a fantastic ROI for rental income.

@Charlie Cameron @Eric Weireter @Brian Corbett

Thank you all!

Charlie - Thank you for that addition! For some reason I was thinking out so far ahead that I failed to see that. Very good insight!

-Kyle G