All Forum Posts by: Sara Eastler

@Caleb Kelley if you contact me privately I'd be happy to connect you with those who are already building and renting tiny houses.

Sara

Welcome to the area @Damon Simpson

Join a local group such as UCREIA (SF and small MF) or USAA (MF) to meet colleagues and potential team members. Be sure to say hello if you see me.

Sara

Hi @Brandon Benzing,

Congratulations on the win-win thinking.

The first year you rent out your primary residence, you will still earn the 4% tax credit because you lived there for most of the year. After that, it will change as it will become an investment property in the new calendar year. However, in the new year you may also protest your taxes if you believe you have good reason. It hurts less to pay 6% on a decreased basis. It also hurts less when you're cash flowing every month on top of escrowing taxes. In other words, don't worry about the tax increase because your qualified tenant will be paying it.

I'm unfamiliar with NC tax laws. In some states and towns short-term rentals (i.e. AirBnB) are not permitted or are taxed differently. I'm sure you've noticed there's a significant cost difference in houses from Easley to Asheville...

If this is your first rental experience, I would educate myself on Fair Housing, qualifying tenants, and arranging for a handyman you trust to call on once you've moved out-of-state.

Kind regards,

Sara

Hi @Steve Muise

According to HomeUnion 2017 NSFR Report (and my lender who invests there) Charlotte is an excellent market to invest in.

"An anticipated increase in single-family construction in 2017 will start to reverse this trend. While prices have climbed, cap rates remained steady at 7.1 percent due to higher rents, making Charlotte a strong market for investors seeking above-average returns.

MARKET OUTLOOK

I invest in the Greenville area and this one is strong as well, but there's power and efficiency in having your SFRs in the same location where you can capitalize on your team.

Regards,

Sara

Hi @Tyler Goulden

First of all huge shout out to you for being a lobsterman from Arundel, Maine! I partly grew up in Maine and went lobstering two summers ago when I moved back stateside after living across the pond so to speak.

I second all of the above books that have been mentioned. I'm formerly in publishing and am an avid reader, consuming (that's definitely the right word!) hundreds of books every year, 80% of which are nonfiction and many of which are my favorites over and over again.

There is one book however that I found to be indispensable to my first MF purchase as well as to my other MF investment properties in which I am part owner. That book is "How to Read a Rent Roll: A Guide to Understanding Rental Income" by John Wilhoit, Jr. This book is single-handedly the most important book in my repertoire because you are actually purchasing an income stream and you must know how to evaluate that income stream. Don't get me wrong, the brick and mortar are great too (and it's because of that "improvement" to the land that you'll be receiving huge tax deductions each year), but while you're in the feasibility stage and before your earnest money goes hard, you need to verify the rent roll.

The other books I didn't see listed that are on my list of having been worth reading more than once include: "Investing in Apartment Buildings" by Matthew Martinez, "How to Make Big Money in Small Apartments" by Lance Edwards and "How to Build Wealth" also by John Wilhoit, Jr.

As much as I love reading, I can't say enough about how important it is to get out and see other people running their apartments. I found out job shadowing, interviewing others, and conducting market surveys in person were far more valuable tools than any of my beloved books (except maybe for the rent roll book). In addition, the National Apartment Association offers an excellent online introductory course for the Independent Rental Owner Professional (IROP) credential that I'd highly recommend as another first step. 

Best of luck to you. (Ayuh.) ;-) 

Warm regards,

Sara

Hello Steven Wilging,

Deciding where to move is a big decision. I moved to Greenville less than a year ago and I purchased ten units in 2016 and have 2 SF under contract in 2017 so I do not agree with the sentiment that this area is a challenging location in which to acquire investment properties. I moved here as an outsider in June 2016 and by June 2017 I will have at least 12 units in the area, my goal is 13.

While I always do what you do, that is I ask local investors for their perceptions of their market, I find that's not an accurate way to assess a region. Have you checked out the larger statistics based reports on SF and MF markets? If you email me off BP, I will send them to you as attachments and links for you to read yourself. As humans we all have unintentional bias, but reading the statistical trends will provide the most valuable feedback for you. 

I hike, rock climb, bike, and enjoy water sports in this region. I miss the beach but it's too far of a drive for me while living in the Greenville area. I hear my neighbors say they like to rent a house on the beach for 1-2 weeks out of the year. The proximity to Atlanta, NC, Florida, and Savannah is great

Follow your heart - there are no coincidences and you'll choose the right home for you and your family. No matter which market you select, you can make money in RE as long as you buy right.

Kind regards,

Sara 

Hi @Juan M. Jaramillo,

I second @John Magovern's recommendation. Brandi and her boss at Petra Property Management have a lot of experience, lease quickly, have a supportive maintenance staff in place and provide excellent customer service to their owners and the tenants they're in charge of. They use AppFolio as a property management software so owners will always have detailed reports at their fingertips.

I've discovered after moving to this area from Houston, where property management is taken very seriously, that there a great many property management companies in this area that have no business being in business. Good luck with your search.

Regards,

Sara

Sure, @Mario Brown I'm available this evening at 8:30 for about 15 minutes, would that work for you?

Friend me and I'll send my mobile number or call my work number at Stoncreek Homes, LLC: Six eight eight 9066

Kind regards,

Sara

Okay - much better. Your numbers don't look bad but is your loan conventional or a hard money loan? On eight units I would expect $8,000/year in my pocket minimum, but hopefully you have some room to push rents and/or renovate a few units to command higher rents. Plus, it looks like you'll be using 3rd party management, which could be a good thing. You'll need to know how much you plan to put into the property for rehab as well. Always be overfunded. Your 2% reserves is light to me - to me reserves should cover at least a roof replacement and 2 appliances or the cost of replacing a water heater and an AC unit minimum. What I do is use the first 6 months of "profit" to renovate the building and store up reserves. After raising the value of the property (meaning I could sell at any time for a profit), then I start looking to put money in my pocket and to establish a decent trailing 12 in case I plan to sell.

At 240K for 8 units you're only paying 30K/unit which is much less than current industry average (unless your property is located in a town like Clinton, SC where it's mainly section 8 and slum housing with no trends towards job growth).

This property is definitely worth pursuing. Be sure to interview the management company as well - they should be on their very best behavior falling all over themselves to court you as a new potential client.

Kind regards,

Sara

hi Ryan,

When I'm looking for a good investment property, the number one thing I look for is location. Specifically, how close is it to major commuter roads, what are the ratings of the schools in the area, what new businesses are expanding or moving into the area, have any new franchises recently opened within a 2 miles radius of the neighborhood, and what is the crime? I also do a brief market survey and check out all the competition, current rental prices and availability, and what the market saturation is. After that I look for a pocket deal (preferred), HUD auction, or other deal at 10-20% below market price. I never flip- flipping is a full time job that delivers close to zero tax write offs and zero passive income and it's risky if you don't know a market first hand and have a trustworthy construction/rehab team in place.

@Timothy, if you friend me here or send me a private email,  I would be happy to recommend some local real estate agents to you in the SF and MF realm that I have personally worked with and would recommend doing business with. 

Best of luck to you in realizing your financial freedom goals,

Sara