All Forum Posts by: Phillip Bradrick

@Ray Wells great to hear you’re looking to get into RE investing and there’s no easier way than turning your primary home into a rental. You’ll have the best rates and should be able to generate good cash flow.

I have several investment properties in and around Wake Forest and would be happy to be a resource for you. Depending on the extent of the work you need done, a general contractor may not be your most cost effective option. We use a few vendors to turn properties as a GC will typically sub out the work and just mark it up.

The combination of a good handyman, painter and cleaner does the job in most cases. If you want to DM me I can give you the needed contacts for that.

As for whether to hire a property manager, I would think through what your resources are for handling emergency and tenant communication overseas with a time difference. If you have family or friends that you can lean on you may be able to make it work for a while but it also is a lot to ask especially for 24 hr emergency calls.

Having a property manager will add cost but a good manager will also help make/save you money as well. If the PM has the right processes they will be looking to balance maximizing rents while encouraging long term tenants as well as avoiding unnecessary expenses and doing cost effective repairs. One of the biggest ways a PM can save you money is shortening your vacancy time frame between tenants. That alone can cost you thousands if not done quickly and efficiently and a good PM will often save you more in lost rents from vacancy than their management fees are for the year.

Let me know if you have further questions and I’m happy to help!

@Tom Pubins great question. There are some great softwares out there like ShowMojo or Tenant Turner that do just that. We manage over 650 doors and ShowMojo has been great in streamlining that process and scheduling showings in pre-defined time blocks.

@Logan Guerrero great question. Maintenance is key to maintaining long term tenants in the property and avoiding unnecessary turnover. I’m an investor and property manager and what we see is that ongoing maintenance items that bother the tenant or that will do damage to the home need to be proactively addressed. Larger capex investments like new roof or windows can be scheduled based on your cash flow position but need to be addressed rather than just pushed off. We see on average 5-7% of monthly rents going back into general repairs and about the same to capex depending on the property condition. I hope this helps as you think things through.

@Gopi Krishna you’ve got some great feedback already. I’d also recommend Peoples Bank and Fidelity Bank as local options. I’ve got some great personal contacts that I’m happy to share if that’s of value. A local bank is great as well as they have a great sense for the market and won’t be interested in underwriting a deal they don’t think will succeed.

@Pradip Chavan Glad to hear you're looking to jump into the real estate investing game.  I agree with assessment of the market that @Cory J Thornton gave you. Investing close into Raleigh or Durham it will be a challenge getting solid cashflow right out of the gate.  I would say that there have been a lot more off market deals being offered by wholesalers in the past few months and many of those are distressed with need to do some renovations to get the property up to speed.  

I am a huge fan of creating equity by buying distressed properties and fixing them up to build in equity from the start. Using a HELOC is a powerful strategy because you can make "cash" offers and close quickly and then refinance once the property is renovated and you can get it appraised. (depending on the lender this will be 6 months - a year) If you're able to find off market distressed deals you can still find reasonable cashflow but still have the appreciation benefits of a bigger market.

At the end of the day, it boils down to what your appetite and long-term strategy is. It may also be worth reconsidering getting your RE license depending on what you are looking to do. I would say that getting it just for MLS access is not worth it as it increases your liability because you are held to a higher standard by the Real Estate Commission. At least food for thought.

@Kara Beal thanks for sharing what you’ve done so far and what your future plans are. I’ve invested and worked in the Raleigh Durham triangle for years. It’s a great market and seems there is starting to be more opportunities for folks doing wholesaling. For a while that became very tough as the large I-buyers like Zillow were paying such high prices for things. Now that many of them have exerted the market I’ve seen a significant uptick in wholesale deal in the past several months.

As to building your network TREIA is a great place to connect with other investors and build your network. https://www.treia.com/

The main encouragement I would have is to try and focus your efforts. You may cast a wide net at first but narrow down to focusing on a few target areas where opportunities are opening up. Covering the whole Triangle and Triad sounds to me like you may stretch yourself in too thin.

You may find success in identifying some good cash buyers and focusing on areas they are purchasing properties. I work with investors across Raleigh and Durham and can certainly pass on your information if you have a solid deal.

I remember well, the feeling of completing my first wholesale deal and it was very exciting. Keep up the great work!

@Sam Smith Unless you are going for the downtown vibe, one of the outskirt markets would be my recommendation.  Wake Forest and Cary would to two that have similar amenities and general feel but have both grown very pricey.

Knightdale and Garner will give you a better value on what you purchase and still have very nice shopping and new infrastructure that has gone in as those towns boom.  I would recommend spending some time driving these areas and getting a feel for them to see what would be a fit.  

If you're looking for leads on renting a place let me know.

@Jack Yen

Hey Jack, I know a lot of the firms in the area and would be happy to connect about this. What are the top most important things for you as you look to transition to a new PM?

Different firms certainly have different focuses and expertise.

@Alex Thomsen. I see a lot of good advice here. I’m an investor and PM in Raleigh / Durham and for us we only let tenants go late a few days. If rent isn’t paid by the 6th then we send a 10 day “pay or get out” notice. This is the first formal step towards eviction. By the 16th if the rent isn’t paid in full we file a summary ejectment with the court to get them out.

Allowing tenants more leeway makes things messy and will almost always mean they will take advantage of the situation.

As for vacancy, 3 months is too long but I would keep in mind it was over the holidays. That will often cause for longer vacancies.

I’d lean towards looking for a new pm.

Take care.

Hey @Zachary Brown, You've gotten a lot of good feedback and there are obviously many perspectives on when and how to jump in.  Finding on market, turnkey properties that cashflow is very unlikely to find unless you go to outskirt markets.  I would recommend possibly building a relationship with a investor / contractor that you could do some creative partnership with.  If you can find someone with hustle and construction knowledge they may be able to help you take down a distressed property allowing you to create cashflow and increase equity significantly.  In the peak of the market, the amount of off market properties were very few.   In the past few months, I have seen a significant uptick in off market properties crossing my desk.

I agree with @Kai Kopsch if you show some patience and work both on and off market properties you can find deals it just takes time.  Also, I am an RE agent and I know if you are working with one that sometimes the amount of effort to find a good deal, especially an off-market deal just isn't worth the commission.  I would chat with your agent and see how you could feed him possible leads on deals and help find that perfect investment.

I'd also come up with the minimum cashflow/ equity you are willing to take and stick to your guns until you find a deal.  I bought a duplex in the peak of the market last year for 25K under the asking price.  I was shocked by it myself but they had so over played the marketing that the many investors that looked at it all walked away thinking it would go for over asking price and we were able to scoop it up at a great discount.  Those deals are few and far between but with a good cash position like you have, I think there is more opportunity now than there was for the past few years.  

I hope this is helpful as you think through your next move.