All Forum Posts by: Chris L.

@Annchen Knodt thank you for the info. I am familiar with hope Valley Farms. I live near the home that is for sale and Folks are constantly calling me to purchase my home and family’s that just moved into the area keep asking if we know of anyone that wants to sell. It’s pretty popular. Some folks have been offered 7–10k over asking price. I am pretty confident the price will rise and that I wouldnt have any issue re-selling. That said, things can happen. 

I heard back from the realtor. The owner had an appraisal done and the homes appraised at $325,000 with suggested selling price of $339k-349k. It’’s hard to find homes in this area. Is this a pretty home, nope, but is in a great area. I did a walk through and the home was in disarray as an elderly man lives there. Of some concern was  1) a leak along a window wall where there are gutters 2) a vertical crack on the wall above entry from LR to kitchen.3) HVAC is 16 years old and will soon be need replacing 4) Hot water heater is old and will soon need replacing 5)  There isnt a laundry room or hard wood flooring and carpet and paint need to be replaced. They pretty much have a bathroom with a toilet and laundry in the same room. 6) One of the “BR” has no closet and the house is listed on tax records as a 2 bedroom but from what I understand from other neighbors with homes from same builder, their homes are listed as 2 bedroom also. 

I looked at Zillow rent calculator and it was around $1800-1900. I’m not sure that would provide enough rent to come out even , so Im debating whether this is a buy to merely sell later with no income and possibly some funds coming out of pocket, or if I would be able to see some income. It’s hard when one has an advantage over others but the price is rather high comparatively to the rent one can take in. Now if the house went up 100k 0r 50 k in a year, well that would be great but who could predict that.  The prices have skyrocketed over the past few years though. Any input is appreciated..

@Billy-Dee Greenwood thank you for your reply. It seems that a few homes that were built at that time with 3 rooms were listed as 2 bedrooms as there are not closets in the 3rd room. My other neighbor, that had his house built by the same builder has a 3 bedroom but it’s listed as 2 br also and he is not quite sure why. 

Do you happen to know what a 3bedroom 3 bath home-2 full and 1 shares with laundry- would rent for near duke? I’m thinking the rent would be around $1900 per zillow. 

I just received a copy of an appraisal done by the owners realtor. It was appraised at $325k and suggested they list the house at $339k to $349k. Higher than I anticipated considering it’s condition, but I live in the neighborhood and receive calls often to buy my house and folks are always walking through the area asking if anyone knows anyone with a house to buy, so it seems logical. That said, it appears the appraiser didnt take into account 1) a leak along a window area 2) a vertical crack in entry wall going from one room to the other 3) place needs to be cleaned up, painted, carpeted etc. It was a mess..no hard woods 3) HVAC 16 years old 4) hot water heater old 5) the 3rd supposed bedroom has no closets 6) bathroom in kitchen is not so great with laundry squished in it also

With the price being that high , even if I deduct for repairs and improvements, I am not sure $1900 in rent yearly would break me even. I’m in a situation where I can negotiate so trying to figure out how much to deduct before making an offer. Do you happen to have an idea of the avg cost to inspect and repair a wall leak near gutter line, replacement of HVAC for 1800 sq, replacement of hot water heater, basic upgrades in bathrooms and kitchen, carpet and paint? 

I do know that the house value will go up over time as I reside in the same area and the demand is very high; however, just not sure a low rent like $1900 would cover all expenses and leave anything left over. 

@Curtis Mears, thank you for your reply. The owners realtor had an appraisal done and they appraised it at $325k and the list price the appraiser recommended was $339k-349k. It doesnt appear that the appraiser took into account the following:1) A large vertical crack in the pass through wall from dining room to kitchen 2) a leak from ceiling to floor along the window/gutter side of the house 3) The house is listed as 2 bedroom on tax records and the 3rd room-whether it be office etc-has no closets..It seems listing homes as 2 br were common in certain houses here that were built with 3 but 3rd has no closets. They are appraising as 3 bedroom, not sure how that works. 4) The AC is 16 years old and will probably need to be replaced soon 5) The hot water heater is also old 6) Crawl looks clean but there are rodent boxes down there-like the ones you see near businesses so wondering about that 7) The house was in disarray, needs new carpeting and paint and some work in kitchen, no hardwoods.Would need upgrading if re-selling 8) master is odd, no linen closet in bathroom but there is one in master bedroom 9) no laundry room- they have the laundry in a bathroom in the kitchen. 10) The entry is odd and unusually narrow, as if they enlarged a room and it encroaches on the entry. 11) bathrooms are small. Not sure any of these other than leak and crack matter though. Just some issues I’m thinking about. 

All of that said, I know the area and folks are offering $7-10k over asking because there just aren't any houses. Newcomers to the area are constantly asking folks if there any houses available in our area. Demand for properties is high but rental prices are odd in Durham. It seems that a 3br house would go for around $1900 if that. I’m pretty confident the price of the house will go up in value as we live in the area and have watched houses rise but I’m not sure the rental prices are good enough to buy this home. Tenants in this area are mostly professionals with a family or families that can’t find a home to buy.Any thoughts? Looking for any input from experienced folks. I’m still in the learning phase of purchasing investment properties and this just landed in my lap. 

Would you have any idea on the price of certain repairs or upgrades-ie hot water and HVAC prices, kitchen upgrade, bathroom upgrade, crack inspection and repair range, leak inspection and repair range...Trying to figure out how much I could attempt to deduct off selling price in negotiations and what the max is that I should pay for the property. Any input appreciated. 

Thank you!

@Annchen Knodt Thank you for the link! That was excellent and very helpful. 

Thank you for your reply @Annchen Knodt. No one has answered my questions but will read on here what I can. I will take any input I can get, so if you have any to throw my way please feel free. This was kind of thrown at me out of the blue-the offer to buy my neighbors house-and I am trying to get up to speed quickly. I would normally prepare better and research before even looking but, well, this house just came my way. It’s tough because I know the neighborhood pretty well and houses have typically sold fast and it’s really hard to come by a one story but it looks like things will be tight-as far as income vs expenses. The house across the street went up 100k since it’s sale in 2016 but most houses have gone up signif in the past few years alone. How does the market look in Durham, potential for growth and has COVID impacted sales?  Do you happen to know where one could get the best rates on re-financing and a loan if one has Excellent credit? 

Thank you again for your input. It’s greatly appreciated. 

How would the 2% and 5% rule apply to a single family house that costs 330,000 with a downpayment of $66,000 ,monthly mortgage payment of $1600  month and $8480 in closing costs with rent I could receive of $1900-2000 a month. Are you applying the 2% towards the amount you put down or the full price of the house? Could someone clarify how to apply the rules? 

@Jaron Walling Thanks for your input. I have experience being a landlord but not in the NC area and you’re right I don’t have experience with purchasing a rental property. I will check out the link. Thanks...The realtor is a close friend of my neighbor and is a part time realtor, works another full time job. He was initially going to have me just make an offer but then decided to have an appraiser to come in. I will ultimately offer what I think is appropriate according to comps etc but was just looking for some input. Thanks for your reply. 

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Hey there! I’m new to investing in Durham and I am thinking of buying a neighbors 3 bedroom house near Duke. It’s not going to be a steal because it’s close to Duke, but I think it might be easier to rent and or sell in the future. Wondering if you experienced folks could offer some advice to a newbie to purchasing an investment.

1. The location is good-near Duke-but it’s not a cheap house-roughly 330k or so less any repairs. The owner is my neighbor and has offered to let me make first offer. His realtor is bringing in an appraiser to give me a fair starting value and they said I could deduct from there for repairs because they are selling as is. Prior to COVID folks were often asking for homes to purchase in the area and even rent because of the housing shortage. Not sure how things ae now with COVID. I do know I get calls all the time asking if I’m selling my house and I reside right next door,but I’m assuming those are wholesalers . I won’t get a steal on the house but trying to figure out if its a good investment. How do you go about determining whether a property is a good investment? Do you have an expense vs profit calculator that helps guide you as to whether it’s a good investment?

2. Approx value of the house is 330k -it will probably be less as the owner is not doing any repairs or work and they said I could deduct. I don’t foresee major repairs but not sure yet. According to Wells Fargo I would have to put 66k down, closing cost around $8475 at apr of 2.729% and the monthly mortgage payment would be around $1427 per month. I’m not sure if that rate would be higher for a rental property, since I already have a residence,do you know?. The potential rent in the area for a 3 bedroom looks like about $1900 a month. That would leave me with about $473 per month for all other expenses. The taxes on the property are around $3300 per year, so after taxes I’m left with about $2376 for the year for all repairs and all other expense. What typical landlord expenses would I have to consider and where would I find the typical costs? What do you typically have the tenant pay vs landlord and how much do you set aside for property maintenance and emergency expenses. What is the minimum income your willing to accept when trying to determine whether to purchase?

3. Do you typically get a loan or buy cash? I told my neighbor I would pay cash but thats before I realized how expensive it was. I thought of buying with cash to get a better deal and getting refinance later, but not sure if the rates would be higher that way. I also don’t know how long you have to wait before you could refinance, after buying the house. Anyone know? I just thought perhaps I might get a lower price if I pay cash but not sure.

4. I have a disability and am not working but my spouse works. I live off my existing investments so I’m really looking for something that will provide me income or go up in value over time. I would like to be able to make some income monthly after expenses but Im not sure if it’s doable with this house. I really need to get a handle on what expenses will look like. What do you usually look for in a property? Do you typically want the rent to pay off all expenses yearly and come out with some income or do you hope to come out even? Do you avoid larger homes and purchase smaller less expensive properties? Just looking for some input as purchasing investment properties is new to me. Any and all advice is welcome.

5. In regards to paying cash or loan. If I pay cash then all the income is mine-less expenses-however then my 300k+ is tied up. I might also be able to get the house slightly cheaper also if cash. I would be getting roughly $1900 a month income though-less any expenses. This would probably work out to 4-5% yearly income after expenses..I think... If I use a mortgage my funds are not tied up but I probably won’t make much income monthly either. Which way would you all go-cash, mortgage, or cash and then refinance later? Most have said mortgage but just curious. I suppose if I get a mortgage then I would have more cash to put into other investments so that is probably a better move.

6. I noticed that the property is listed as a 2 bedroom on the property taxes but it’s a 3 bedroom and always has been. It was built as 3 bedroom. Some others with houses built by same builder have the same issue.Does that impact anything?

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Hey there! I’m new to investing in Durham and I am thinking of buying a neighbors 3 bedroom house near Duke. It’s not going to be a steal because it’s close to Duke, but I think it might be easier to rent and or sell in the future. Wondering if you experienced folks could offer some advice to a newbie to purchasing an investment.

1. The location is good-near Duke-but it’s not a cheap house-roughly 330k or so less any repairs. The owner is my neighbor and has offered to let me make first offer. His realtor is bringing in an appraiser to give me a fair starting value and they said I could deduct from there for repairs because they are selling as is. Prior to COVID folks were often asking for homes to purchase in the area and even rent because of the housing shortage. Not sure how things ae now with COVID. I do know I get calls all the time asking if I’m selling my house and I reside right next door,but I’m assuming those are wholesalers . I won’t get a steal on the house but trying to figure out if its a good investment. How do you go about determining whether a property is a good investment? Do you have an expense vs profit calculator that helps guide you as to whether it’s a good investment?

2. Approx value of the house is 330k -it will probably be less as the owner is not doing any repairs or work and they said I could deduct. I don’t foresee major repairs but not sure yet. According to Wells Fargo I would have to put 66k down, closing cost around $8475 at apr of 2.729% and the monthly mortgage payment would be around $1427 per month. I’m not sure if that rate would be higher for a rental property, since I already have a residence,do you know?. The potential rent in the area for a 3 bedroom looks like about $1900 a month. That would leave me with about $473 per month for all other expenses. The taxes on the property are around $3300 per year, so after taxes I’m left with about $2376 for the year for all repairs and all other expense. What typical landlord expenses would I have to consider and where would I find the typical costs? What do you typically have the tenant pay vs landlord and how much do you set aside for property maintenance and emergency expenses. What is the minimum income your willing to accept when trying to determine whether to purchase?

3. Do you typically get a loan or buy cash? I told my neighbor I would pay cash but thats before I realized how expensive it was. I thought of buying with cash to get a better deal and getting refinance later, but not sure if the rates would be higher that way. I also don’t know how long you have to wait before you could refinance, after buying the house. Anyone know? I just thought perhaps I might get a lower price if I pay cash but not sure.

4. I have a disability and am not working but my spouse works. I live off my existing investments so I’m really looking for something that will provide me income or go up in value over time. I would like to be able to make some income monthly after expenses but Im not sure if it’s doable with this house. I really need to get a handle on what expenses will look like. What do you usually look for in a property? Do you typically want the rent to pay off all expenses yearly and come out with some income or do you hope to come out even? Do you avoid larger homes and purchase smaller less expensive properties? Just looking for some input as purchasing investment properties is new to me. Any and all advice is welcome.

5. In regards to paying cash or loan. If I pay cash then all the income is mine-less expenses-however then my 300k+ is tied up. I might also be able to get the house slightly cheaper also if cash. I would be getting roughly $1900 a month income though-less any expenses. This would probably work out to 4-5% yearly income after expenses..I think... If I use a mortgage my funds are not tied up but I probably won’t make much income monthly either. Which way would you all go-cash, mortgage, or cash and then refinance later? Most have said mortgage but just curious. I suppose if I get a mortgage then I would have more cash to put into other investments so that is probably a better move.

6. I noticed that the property is listed as a 2 bedroom on the property taxes but it’s a 3 bedroom and always has been. It was built as 3 bedroom. Some others with houses built by same builder have the same issue.Does that impact anything?

7. Any input on other investment options to consider for income is welcomed

Thank you!

Hey there! I’m new to investing in Durham and I am thinking of buying a neighbors 3 bedroom house near Duke. It’s not going to be a steal because it’s close to Duke, but I think it might be easier to rent and or sell in the future. Wondering if you experienced folks could offer some advice to a newbie to purchasing an investment.

1. The location is good-near Duke-but it’s not a cheap house-roughly 330k or so less any repairs. The owner is my neighbor and has offered to let me make first offer. His realtor is bringing in an appraiser to give me a fair starting value and they said I could deduct from there for repairs because they are selling as is. Prior to COVID folks were often asking for homes to purchase in the area and even rent because of the housing shortage. Not sure how things ae now with COVID. I do know I get calls all the time asking if I’m selling my house and I reside right next door,but I’m assuming those are wholesalers . I won’t get a steal on the house but trying to figure out if its a good investment. How do you go about determining whether a property is a good investment? Do you have an expense vs profit calculator that helps guide you as to whether it’s a good investment?

2. Approx value of the house is 330k -it will probably be less as the owner is not doing any repairs or work and they said I could deduct. I don’t foresee major repairs but not sure yet. According to Wells Fargo I would have to put 66k down, closing cost around $8475 at apr of 2.729% and the monthly mortgage payment would be around $1427 per month. I’m not sure if that rate would be higher for a rental property, since I already have a residence,do you know?. The potential rent in the area for a 3 bedroom looks like about $1900 a month. That would leave me with about $473 per month for all other expenses. The taxes on the property are around $3300 per year, so after taxes I’m left with about $2376 for the year for all repairs and all other expense.  What typical landlord expenses would I have to consider and where would I find the typical costs? What do you typically have the tenant pay vs landlord and how much do you set aside for property maintenance and emergency expenses. What is the minimum income your willing to accept when trying to determine whether to purchase?

3. Do you typically get a loan or buy cash? I told my neighbor I would pay cash but thats before I realized how expensive it was. I thought of buying with cash to get a better deal and getting refinance later, but not sure if the rates would be higher that way. I also don’t know how long you have to wait before you could refinance, after buying the house. Anyone know? I just thought perhaps I might get a lower price if I pay cash but not sure.

4. I have a disability and am not working but my spouse works. I live off my existing investments so I’m really looking for something that will provide me income or go up in value over time. I would like to be able to make some income monthly after expenses but Im not sure if it’s doable with this house. I really need to get a handle on what expenses will look like. What do you usually look for in a property? Do you typically want the rent to pay off all expenses yearly and come out with some income or do you hope to come out even? Do you avoid larger homes and purchase smaller less expensive properties? Just looking for some input as purchasing investment properties is new to me. Any and all advice is welcome. 

5. In regards to paying cash or loan. If I pay cash then all the income is mine-less expenses-however then my 300k+ is tied up. I might also be able to get the house slightly cheaper also if cash. I would be getting roughly $1900 a month income though-less any expenses. This would probably work out to 4-5% yearly income after expenses..I think... If I use a mortgage my funds are not tied up but I probably won’t make much income monthly either. Which way would you all go-cash, mortgage, or cash and then refinance later? Most have said mortgage but just curious. I suppose if I get a mortgage then I would have more cash to put into other investments so that is probably a better move.

6. I noticed that the property is listed as a 2 bedroom on the property taxes but it’s a 3 bedroom and always has been. It was built as 3 bedroom. Some others with houses built by same builder have the same issue.Does that impact anything?

7. If you have any other ideas on investments that would help one make passive income please share. 

Any input would be appreciated. THank you!