All Forum Posts by: Michael Jackman

There is an opportunity for a complete remodel to a commercial property with store front first floor and residential remaining floors. It is also located in an QOZ. I'm not familiar with the tax benefits, though I have spent a little bit of time studying up on it.

I'm just curious if you have had a good experience with this? Has it been a good tax deferring strategy for you? Pros/cons if any?

Thanks!

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Where do read about the sprinklers required in ADU's specifically? I couldn't find it in the legislation. Nor would that make sense for residential buildings with less than 3 stories. Are you referring to apartment buildings?

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Originally posted by @Dave Olverson:

@Dana LaBerge - thanks for following up. For what it's worth, I think what people say is true. I HATE repeating this phrase because it feels like such a copout, but it truly is block to block. In fact, I know some streets where I would feel more comfortable buying on one side of the street than the other due to crime associated with a street that has properties with a back yard that meets the back yard of one side vs the other.

It is a very hot market and I think that cash flow based on no improvements is not really possible. Cash flow based on buying a distressed house and rehabbing it are certainly possible if you find the right deal, but you have to be really careful that you know the specific area well to know if it is a good investment.

I even know really "hot" areas that still have high crime (or perhaps have even higher crime than they used to because they are hot and gentrifying, which causes tension).

Durham just passed legislation called Expanding Housing Choices which makes ADUs and duplex conversions legal throughout the city. I think the only way I would invest in single family rental homes here right now is if I could get them for a deal and add an ADU or split it up into two units in a cost-effective way.

Of course, others may have more appetite for risk than I do and I certainly think that Durham as a market is continuing to rise and get even more robust with many more people moving to the area every day.

Dave, when you mention ADU, does that refer to a owner-occupied property only? or is this a property that can be permanently split and rented out as a true duplex? triplex? quad?

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Originally posted by @Steven Griffith:

For everyone's info, this is a new development currently ongoing in Pittsboro, NC - just south of Chapel Hill off of 15-501. By ongoing, I mean planned with a lost of the initial groundwork being done. No housing yet. It's a mixed use community - supposed to have apartments, townhome, SFH, restaurants, shops, schools, etc. There are some restaurants and storefronts opened now, however. I'm also interested in this area, so I've been doing my own research.

@David Gaudet when you have the time, take a drive down to Pittsboro. The developers have recently opened a store front in downtown Pittsboro where they have all the plans for Chatham Park laid out, along with estimated timelines. I was there a few weeks ago and it was really helpful. You can see where the SFHs will be schools, restaurants, townhomes, etc and get a rough idea of when different phases will be open. Some of the information is here: https://www.chathampark.com/. Regarding eventual plans, here's a quote from an article about a year ago:

"Eventually, Chatham Park is expected to have 22,000 homes, along with stores and offices. The development will be broken up into four or five villages that are made up of neighborhoods."

@Mike Hyder makes some great points about the pros and cons of buying new. The one additional thing I would add is, given the scope of Chatham Park and the fact that there are no homes now, if you're going to invest here then consider investing early. Developers raise the prices of homes in a neighborhood as time goes on. If you buy your new home early during a neighborhood's development, you will have purchased your house for less than someone who buys the exact same house a year or more later. And certainly for less than someone who buys their house 5-10 years later. While I doubt you'd be able to do anything to force the appreciation of the house initially (as it's a brand new house...), there is almost an inherent appreciation because the developer will raise the base price of the house every couple months. Especially around the Triangle area, as I'm sure you know.

Great info, Steven. There is a similar planned neighborhood near me that has been under development for the last 15 years. It is one of the highest demand neighborhoods but that comes with a cost. Houses have definitely appreciated with the current market but HOA fees also go up as amenities are built. But with that, the demand has stayed. Also remember @david gaudet, that if you try to sell later that you will be competing fiercely with the new construction, for years to come.

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Raleigh, North Carolina

@Miles Stanley

It completely depends on your numbers and how long you plan to hold. You can install GFCI breakers or outlets and work around it that way and have your up-to-date outlets, but eventually....it will need to be updated. And like what @Darius Ogloza mentioned, a 200 service is standard these days and allows for future expansion/renovation possibilities.

Also, what do you want to do now when construction is already taking place vs. do you want start new construction later to take care of a problem you know exists? It almost always will be cheaper to do things sooner than later.

My 2 cents, as an electrician.

Good luck!

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@Matthew Christman

Matthew, Congratulations!

How long was the project? How much time do you think you invested weekly? I would be curious to know a bit more details about some of the bumps that came along and how you dealt with them. And I'm glad to hear the good feedback about working with @Jonathan Taylor Smith. Congrats to you both for the team effort.

Thanks!

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Originally posted by @Justin Vinton:

I will draw a distinction here that there is the topic of having an emergency fund for your business(each rental property is it's own microbusiness) and a separate emergency fund for your personal budget. As a risk adverse individual I would say never sacrifice your personal family emergency fund for an investment. You want each investment to provide a blessing to you and your family not become a burden, which can easily happen without a proper buffer. I have established a 5000 emergency fund for each property then reinvested the excess either into additional principal payoff or other property. That has worked really well for us with 3 investments(2 paid for). Real estate investing is a long term game to retire well and leave an inheritance to my children's children.

Thanks for the clarification.

I completely agree with the separated funds. I was referring to having personal security blanket before saving up for investing but it is great to see where other peoples minds are.

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@Alex Cardenas

The alumiconn are for small remodels that won't be holding a high amp load for very long. I definitely would not recommended them for permanent use, though they are UL listed for such use.

As an electrician, I would recommend doing things right the first time before you have tenants in place, but since you are planning on selling, it probably won't be that big of a deal since the connectors are listed for that use. Make sure you get a licensed electrician with proper insurance to install them though. They must be installed correctly.

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@Joseph Firmin Thanks for the input. I believe the report was targeting A-B class.

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@Scott Trench

Interesting topic. looking forward to the results.

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All Forum Posts by: Michael Jackman

Michael Jackman has started 16 posts and replied 54 times.

Post: Qualified Opportunity Zone question

Post: Durham Neighborhoods

Post: Durham Neighborhoods

Post: Chatham Park - North Carolina

Post: Does replacing electrical/rewiring improve home value?

Post: Home rebuild Investment property - 112 S Joyland Ave. Durham, NC

Post: Save for a emergency fund or invest?

Post: Pigtails For Aluminum Wiring

Post: Large MFH investors, what is your current cap rate?

Post: What's the Best Cash Flow Market in the Country?