All Forum Posts by: McKenzie Bagan

Thank you everyone who has commented and offered advice and support. This has definitely been a learning experience. We are looking to do what we can, recover, regroup and move forward. Thanks again all

This is a not happy post and we feel like we are in a difficult spot. I did my first Brrr property and things have been tough from the start. I was able to get the property renovated, refinanced and listed with a property manager. It has been a difficult process for the beginning. The repairs were more than estimated and the refinance came in a a not good rate. I can admit I made mistakes in buying this property and investing but it has been a very valuable learning experienced. I am in the process of getting it rented with a property management company. Unfortunately, when the PM was showing they found the property had been broke in to trashed. Looks like some teenagers came in and messed the house up. The management company was good an contacted the police for a report. We are going through insurance for repairs. We feel upset and saddened by the news of course. We feel like our hard work has been torn down. It just plain sucks, but we know that these risks are involved in reral estate investing and we were just unfortunate. 

The property is in a bad neighborhood and it has been difficult to rent. We have had no applications in 3 months despite lowering the rent rate. The latest rent reduction would have us not cash flowing at all. We would be ok with just having the mortgage and expenses covered but now that the broken in to and trashed we are thinking about cutting our losses and selling. We will go through insurance to have the property repaired but we are worried that it will just get broken in to again. Vacant properties in this area just get terrorized by teens and we are not sure how we could secure the property more even if we put bars on the windows. We would like to keep the property and make it work but we are worried that there is just no saving this neighborhood and wonder if its better just to accept the loss and move on with the lessons we learned. 

Does anyone have experience with cutting your losses on a property and getting out? Should we keep trying to fix it and get it rented evening though the area is not improving (or at least won't turn around for what we can see)? Can you carry forward real estate losses on your taxes? Do you have to right off all the losses at once or can you do it over time? Figure if we have to cut out we can look for a silver lining somewhere and save a little on the gains from our other ventures. Any thoughts, comments, or just support messages is greatly appreciated.  Thanks

Hello BP Community,

I am looking for creative insight on a complex deal. I’m weighing pros and cons and seeing what the best case scenario I can do, and if anyone else has done anything similar to this. I’d love to hear your thoughts on how to navigate through this deal/situation. I love how creative this community is!

This spring I purchased an off market investment property to BRRRR. Using hard money and rehabbing and now in the middle of refinancing out of the loan.

Unfortunately I purchased right before the interest rate hikes, and spent more in rehab than initially quoted (found things behind walls, bad roof, etc), and since interest rate hikes I’m trying to salvage what I can from the deal.

I am working with a lender on the loan and will have to bring cash to closing table for the deal, for a conventional investment property loan.

Also while rehabbing the property, I moved in with a friend, to put my primary house on Airbnb. My BF and I are intending to buy a house together next year and use said funds for a down payment for a primary.

The investment property is in Charlotte NC area. I would move in/change my address to live with the BF but he is in SC, and I’m in NC and W2 Job is located in another state (I’d have to file taxes for 3 states with my W2 job in one year). At the end of the day I’d like to avoid the nightmare, and the plan is for us to purchase a primary in NC in 2023.

Lender said since I just moved in with my friend and within next 12 months the BF and I will buy a primary, I could get away with a lower rate for a primary loan, and I'd walk away with cash at the closing table. Instead of the investment property loan 75% LTV I would get 80% LTV with a primary loan. We talked and even though I have no intent on living at the property and renting it from day one, He said you can get away with a primary res loan. He said people change their plans all the time when they buy a primary. So just say it will be a primary but my plans changed and I made it a rental if they ask. Friends in the investment real estate business say lenders never pursue the due on sale clause or investment issues as long as the mortgage is paid each month. Has this been your experience?

Is this skirting on mortgage fraud? Did he really suggest it? The original plan was to proceed with the investment property loan and quit claim it back to my LLC.

Also I am worried about my liability. If I did refi it to a Primary, I have an Umbrella Policy, would that be enough liability coverage when renting? I'm aware I cant put a primary into LLC. But putting it in to an LLC is my preferred option.

Should I change my primary address to the investment property for the Primary Loan?

We have our goal set out for next year, trying to strategize. Having this investment property would bring in about an extra $100 per month in cash flow. So I want to take the lenders recommendation but I don’t want to do anything that would get me in trouble with the lenders. I have been told they don’t care as long as the mortgage is paid but I want to hear from others experience. Thanks in advance, I look forward to hearing you’re thoughts and posts.

Hi Mike,

I know this is an other post but how did this play out? Did the HOA vote to ban STRs and if so where you grandfathered in because you purchased before the rule was put in place? We are specifically trying to find more information on whether the ability to STR is grandfathered if the HOA did not ban them in its inception? My father is in a similar situation. His property is in a HOA that has not banned STRs. He started to run one but the HOA sent him a stop letter. An attorney wrote him a letter citing NC case law that the HOA language did not ban STRs and that he could continue. His worry now is the HOA is going to meet and vote to ban STRs after his prior win with the letter. He is unsure about the community. Its small. He thinks that most of the residents would vote to ban but he is not sure they have the 80% votes necessary. He is trying to resolve things without burning bridges but some neighbors just want to be in each others business. Any thoughts or details of your experience would be appreciated.

@Keith Dowdy

Hi Keith! I'm looking to purchase my first STR this Q1, or Q2 this year in the Beech Mountain STR market. I would love to chat more about your experiences running properties in the area.