All Forum Posts by: Chris T.

Congrats @Dairius Kawewehi

Can you give any more details on your deal?  What was the condition of the building when you purchased?  What rehab was required?  How did you find your tenant and how long it take to place them?

We have used Triangle Pest in the Charlotte area.  They are super quick to respond and will come out between regular treatments if there is an increase in pests.  Not sure they are the cheapest option, but definitely a good option.

@Troy Harris - another thing to keep in mind with your search is that there are STR ordinances/restrictions in Blowing Rock. Just make sure that you are looking in the properly zoned areas.

Blowing Rock STR Ordinances

Does your NOI take into account any repairs/maintenance? To me it is structured more like a commercial deal with a gross 10 yr lease with added rent bumps. The 5.51% cap rate is going to make it hard for any financing on the deal so you would be looking at a cash buyer most likely.

Commercial investors are able to get NNN properties at similar (and trending higher) cap rates. I think some were purchasing multi-family at low cap rates but they have the ability to increase rents quicker than 2.5% annually.

I second @Dave Foster.  I have used him and his team for 3 successful 1031 exchanges (all in the Carolinas).

@Blair Carney - I will start off that I am neither a CPA or Tax Professional

My plan for my children is the same. From my research, yes, you are able to use 529 funds to pay for off campus housing. Whether that is to a LLC that you own or a 3rd party landlord/company.

There are some guidelines you will would want to follow....

- Yes, your son will need to pay rent.  That is how you are able to use the 529 funds.

- The rent paid with 529 funds can not exceed the published housing costs that each university posts (they typically list On campus and Off campus housing costs).  

- Treat your son and any other tenants equal and as if they were any other tenant (sign a lease, equal rents, etc).  You need to be able to show that you are not trying to evade anything if you were to ever be audited.

- I'd have the house owned or at least "managed" by an LLC to whom the rent is paid. That again prevents the appearance of you paying yourself.

Again, I'd have a conversation with your tax professional, but that is the understanding that I have.

@Roy Gottesdiener - It is still an area that is very much in transition.  There are still many areas that are pretty rough, but there have already been many homes torn down and rebuilt with much larger, modern homes that don't exactly fit with the area.  This has caused some consternation among the older residents.  I know that the city has identified these areas as "Corridors of Opportunity" which means they are working to bring businesses and infrastructure money.  There has also been some headway in designating areas as historical areas.  

All that to say that there is a lot of positive things going on but make sure you are getting specifics on any area project you are thinking about.    

Another option is you could do just a light rehab  (paint walls, paint or just new doors on kitchen cabinets, new light fixtures, etc.).  Those are all relatively quick and inexpensive but might spruce up the house for the refi.  After the wear and tear of it being a rental (college kids or not) you can then redo the kitchen, bathroom, etc. before selling.  The other benefit is you then don't run the risk of rehabing now and then the style becoming "dated" even in that short of a period of time.

I've worked with @Dave Foster on now three 1031's.  He and his team, while not located in NC, are very easy to work with via email and phone calls.  I would highly recommend them.

@Roy Gottesdiener - I am not familiar with the rental market with Kings Mountain specifically, but there is grow happening in that area with the building of the Catawba Two Kings Casino.  They have a temporary facility open now, but have plans to open a large permanent casino in the future.  Both construction and eventual casino I would imagine bring more people to the area.  Just my 2 cents.