All Forum Posts by: Account Closed

@Jared Larry thank you for your reply.  The affordable property in South Durham is so tempting, but I agree, it's probably a bit too risky for someone like myself who is just starting out.  Like any market, you can't anticipate when an area like S. Durham is going to boom. And you make great points about the lack of amenities being a dissuading factor to a lot of renters.  I'll start looking at other areas that are a bit more promising.

Absolutely wrong on several levels.  This is not okay.

I just purchased my first property (SFH, house hacking) in Durham, NC and looking to pick up another single family or duplex in the next 6 to 12 months. For those who are familiar with this part of the Carolinas, what do you feel about investing in South Durham, specifically around NC Central U? A lot of the neighborhoods are pretty rough but I feel like it's inevitably going to become more developed in the coming years. Part of me really wants to get into this market now while the getting is good, but I am concered about the quality of tenants and high crime. Is it wise to invest in an area like this if it's in the "Path of Progress"?

Ive followed various personal finance blogs and forums for a number of years, and doing so has given me a lot of sound advice for how to manage my money. However, I still remained fearful of money (or rather, fearful of losing it) and had no tolerance for risk.

Now, since educating myself on real estate investing, my actual *relationship* with money has improved drastically. I finally pulled the trigger and purchased my first single family owner-occupied house with 5% down (something I would have NEVER EVER considered prior to educating myself on real estate - I believed that 20% down was the One True Way). This is a property that I am house-hacking with 3 other people, so having most of my mortgage paid for me is pretty darn sweet.

Unfortunately, I didn't do the best due diligence, and we've discovered some structural issues with the home that are going to cost a substantial amount of capital to repair, in addition to other things that we KNEW going into the sale would need repaired or replaced. However, I'm not experiencing the torrent of overwhelming dread and doom that I expected from being in a situation like this. Parting with my money used to be an enormous point of anxiety for me. Now I see it as merely a vector for wealth building.  I understand now that issues like what I'm going through with this first house aren't the end of the world, and every experience (good or bad) is an opportunity for growth and learning.

On other forums, I felt like I was being dissuaded from taking risks and doing anything unconventional with my money.  Were it not for BiggerPockets and similar sources, I definitely would have waited another 6 months to a year to pull the trigger on my first deal.  Even though I'm under a lot of financial stress right now, I'm managing it surprisingly well and I know this is just going to prepare me more for the next deal, which I hope to land in the next 6 to 12 months.  Thank you BiggerPockets for giving me the knowledge and the confidence to start my journey in Real Estate.  It has truly opened up a whole new world of possibilities for me.  :)

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $245,000
Cash invested: $12,250

Single family owner occupied home, currently being house-hacked with 3 other people.

What made you interested in investing in this type of deal?

I originally wanted a duplex or a quad but was not impressed with most of the neighborhoods in Durham where multifamily properties are prevalent. Since this would be an owner-occupied dwelling, I wanted a place that I could feel safe. I decided to house hack a single family home instead, and we found this property in a great location that's close to shopping centers and the Research Triangle.

How did you find this deal and how did you negotiate it?

Found on the MLS, landed the deal with a substantial due diligence check of $7,000 and $5,000 over the listing price. Negotiated $5,000 from the seller for repairs.

How did you add value to the deal?

We are in the process of replacing / repairing 15+ rotten floor joists, and will be replacing the roof before the end of the year. We will be replacing the ductwork, as well as the subfloor and carpeting in at least one bedroom due to prior pet damage.

What was the outcome?

Purchased the home with 5% down at 3.625% interest. We later discovered some foundational issues the home that could have been avoided had we done better due diligence.

Lessons learned? Challenges?

My agent told me that she didn't feel that a structural engineer was "necessary" during the due diligence period. As a result we are now dealing with $4k - $5k in structural repairs.

Had I to do it over again, I would have brought along a jumpsuit to the initial showing and checked out the crawlspace myself. We would have noticed how bad the moisture damage was right from the get-go. In hindsight, I probably wouldn't have purchased this particular house, knowing how many problems there were.

I have room mates that will be helping to cover the mortgage and expenses.  I assume I will need to declare their payments as rental income even if I will not be making a profit from it.   Are there any good resources out there that address the legalities and taxation parts of house hacking?