All Forum Posts by: Matt W.

Hello BP, 

Excuse me if this is redundant but I want to get this idea clear in my head. I am looking at a property to BRRRR. It is a SF, 3/2 @ 1500sqft, Wilmington, NC area. The property is a major rehab, already gutted to studs and floor joists. The current owner did all the gutting himself, and as far as the city/county knows the house is still in livable shape and is current on taxes/has no code violations.

For simplicity sake, lets presume I'm using all my own cash for the purchase and rehab, no bank requirements for general contractors, inspections for draws etc. Also, I would not do some large change like add a bathroom or an addition that would change the particulars on the tax record. 

My question is, given that no government agency knows how bad the property currently is, are permits necessary?  As far as I can tell, the bank's appraiser will want to see before and after pictures that show that quality work was performed, but does that mean reviewing permits?  Is there a need to re-certify and get a certificate of occupancy?

Note: I'm not saying I would cut corners, do shoddy work or skip having work done by professionals, I am simply hoping to avoid government expense and red tape.  Certain big items, such as complete AC replacement, require a permit inspection in my county. 

Thanks for any advice. 

Wish I could make it! How often does the brewery meet up spot rotate? I selfishly vote for WB Brewery or Waterman's. 

 Hi Jennifer, 

Did you ever find a contractor or go through with this project? I'm looking for contractors in town, any experiences good or bad is appreciated!

Thanks

Hey guys, 

figured I'd add to this thread before I start a new one...I'm looking for an investor-oriented buyer's agent in town.  I bought my first property very conventionally with a great young agent who I like a lot, but he just doesn't think "outside the box" enough for what I'm looking for.  

So specifically I'm looking for an agent who understands the BRRRR method and hopefully is an investor themselves and can help me find distressed sellers and properties. I'm getting hard money/cash lined up now.

Thanks!

@Michael Peters

Thanks, I’ll try my best not to lose a good tenant over an extra $500 a year, it wouldn’t be with it if I had to be vacant for an extra month.

@Josue Vargas

Why do you say do 12 month max lease? Assuming they are still good tenants and want to stay, why not keep rent the same but ask for an 18 month lease, then in summer if I raise the rent and they move out, I have better odds of renting it quickly with less vacant time. Maybe $100 is too aggressive, but something.

Anyways, good points that a good tenant staying is more important than an extra $50/month because one extra month of vacancy cancels all those gains.

Thanks for your responses.

I just rented my 3br/2ba house a few months ago; so far so good. I live in Wilmington NC and the rental market is much hotter in the summer. Unfortunately, my current 1 year lease started in December, so it will renew again in the winter.

Assuming the current tenants want to renew their lease and I want to keep them, I’m thinking of presenting them with 2 options. Currently rents at $1350.

Option A: only raise the rent @$40 but require them to sign an 18 month lease, making the lease expire in summer and putting me in a better position when it’s time to renew going forward.

Option B: raise the rent $80-100 but allow them to sign a 12 month lease.

FYI: they have 4 young kids and a dog and came from a much worse living situation. I’m hoping they will not want to move again. I don’t want to take advantage or turn the screws on them, but I have to maximize profits as well. They house cash flows well but I think the rent needs to go up a little next year.

Of course, if they end up being a pain I’ll have to part ways in December.

Thanks!

I discovered one guy had a felony so I told them I can’t rent to them. I guess I’ll have to market more or drop the price to attract more qualified applicants...thanks everyone!

Thanks everyone, 

I understand about discriminating against protected classes, but being a criminal and having bad credit is not a protected class, otherwise what is the point of doing a background and credit check. 

Jeff, my policy is credit below 550= 2x rent as security deposit, and that is applied to everyone across the board. However I have not heard if changing the actual rent amount is legal. I don't think the extra $100 a month I might get would be worth the potential legal issues,  so I'll probably skip that idea.

Bob A., yes I've had tons of interest but most people lead with "how low of credit will you take?" or "do you do a background check?" which of course throws up red flags.  Only a few people have applied and all have had absolutely awful credit and I never hear from again after I mention their report. 

Laurie, thanks for the tip, I'll call the probation office.  Will they just tell me based on their name or do I need some sort of court/docket number? 

Thanks again!

Hello BP,

I am renting a 3/2 house in Wilmington, NC and have had a hard time finding that "perfect" applicant.  Two 30ish guys came by and really want the  property, however one of them has about 6 arrests for drug and theft type crimes.  They were both upfront and honest about their past and have been very responsive to my questions about income, references etc.  They are both coming from a sober living house, I spoke with their house managers and sponsors and they both get glowing reviews that they are on the right track.  Both have good blue collar jobs, electrician and tile guy, and make plenty of money.

My question is, can I legally or should I change the terms to reflect the fact that many landlords would not even consider them because of their criminal background?  Specifically, I know I can charge up to 2x monthly rent as security deposit, but can I also raise the rent amount? It seems the same as a bank charging higher interest to those with worse credit.  I'm not trying to screw these guys over but I have to mitigate the risk of renting to them at all. 

Furthermore, should I even rent to these guys? I believe that people can move on from their past mistakes, but I want to run this like a business, not a charity.  

Thanks, 

Matt