All Forum Posts by: Scott Ashworth

Investment Info:

Townhouse fix & flip investment.

Purchase price: $225,000

4/2.5 Townhome adjacent to Downtown Cary.
Seller staying in home rent-free through end of June. I will fix it in July and put on the market in early August.

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

I flip 1-2 properties per year to help me finance the purchase of my buy & holds. After picking up a few rentals, it is time to purchase a flip.
Also, if I find a property within a certain geographic area, I want to buy & hold. I also look for properties just outside that geographic area to flip.

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

It was an off-market deal with an Agent I purchased another property from last year.

How did you finance this deal?

It is an all cash deal.

How did you add value to the deal?

We negotiated:
FREE rent to Seller for 6 weeks
Paying for Seller's closing costs up to $1,000
Discarding any personal property the Seller does not want
**In exchange for the Seller receiving permission from HOA for us to have construction dumpster at the property

Lessons learned? Challenges?

We are in the process of purchasing all the materials needed for this flip (construction to begin July 1) -- we will put in a box truck and will have available to the contractor so we are not keeping him from hitting his timelines.

@Saurin Pandya to piggyback on your point re: Rentals in Cary/Apex/Morrisville/Raleigh. Correct me if what you've seen is different: but what I have found is the properties/locations in Holly Springs that are going to garner top $ in rentals cost no less than properties in Cary or Raleigh at similar price points. Now, you may have to find some of those properties off-market in Cary/Raleigh but the effort required to find these good investments is the same. **Disclaimer: higher rents do not equal higher profitability...but I am seeking Class B properties in Class A areas**

So my point is: for the same acquisition cost, my preference is to stay in Cary because (a) it is closer to Raleigh, RTP & RDU and (b) I believe in the long-term appreciation for Cary (especially certain sub-markets within Cary) over many other places in the Triangle.

That said, if ones comfort level lies in Holly Springs, I believe we will look back in 10, 15, 20 years from now, and say without a doubt, Holly Springs was a good investment. 

@Jennifer Kim

Does the Seller have an Agent? I ask because several of my off-market deals have an Agent. 

Here is what I do when I am working on an off-market deal when a Seller's Agent is involved:

I lay out my Terms...if Seller is agreeable, then the Seller's Agent can type everything up in the Offer to Purchase Contract (since they are getting paid and I'm not).

Here is an example of my Terms:

Terms:

Purchase Price: [$-amount]

Closing: [Date]

Rent: FREE from time of Settlement through [30-90 day window].

Attorney’s Closing Costs: Buyer will pay up to $1,000 in Seller’s Attorney’s Fees (not to include prorated property taxes)

Removal of Debris & Trash: Seller can leave whatever they do not wish to keep, and Buyer will discard or donate FREE of charge

I hope this helps!

@Anks Desai if you follow the path of growth in the Triangle over the last 5-10 years, Apex, Holly Springs and Fuquay are growing like crazy. 

Like @Patricia Taveras stated earlier, you may be trading appreciation for cash flow. Unless you know what you are doing, that isn’t advisable from the onset. 

One possible strategy that could help you cash flow from the beginning is short term rentals or corporate rentals. I, myself have not employed this strategy, but I have some investor friends who have been very successful with this strategy — to the point they quit their W-2 job 

good luck!

Call the water company (Town/City) - in my Town of Cary, NC they can see how much water was used by the day. If the water usage was evenly distributed, sounds like you have a leak. Call Town/City...see what they can tell you about the usage.

@Chad Gray - great feedback. Two [2] notes: (1) Did you mean Morrisville or Mooresville (near Charlotte) (2) I'm an investor here in Cary, and the market here is HOT. The only properties that have made sense to me over the last 3-6 months have been off-market deals. Off-market properties are not impossible to find, but they do oftentimes require a lot of rehab. 

And, the property values in Cary has been exploding recently as well. 

I'm a huge advocate for investing in Cary, but know going into it: Cary is not cheap and investing for cash flow is difficult...but finding a renter is not a problem here.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $242,250

We just purchased this property (April 29, 2021) - Seller will rent back for $0/month through July 31, 2021. We will do extensive renovation & Rent

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

This property is within my specific niche market.

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

Direct mail (post cards)

How did you finance this deal?

Cash.

How did you add value to the deal?

We closed in 2 weeks, and are renting the property back to the Seller for 3 months for Free. This allows Seller to have their money up front, and then purchase when it is convenient for them...and allows them time to move out at their leisure. Lastly, we threw in some extras like: whatever Seller doesn't want, they can leave and we will discard...we also paid Seller's closing costs, not to include property taxes

@Danny Kaminsky great insights! I am unable to speak intelligently about specific markets within the Triangle except to say Cary is seeing incredible increases in values. We have found success off-market. On-market deals in and around our properties in Cary are getting 10s of offers, well above asking. 

In short: Cary is a great market, but I’ve found it only makes sense if you can find some off-market deals.  

I bet it is more than you think right now. One on Kathryn sold for $405,500.

Sean, have you read anything about this park? I ask because all of Downtown Cary is revitalizing. Home Prices within 1 mile of Downtown Cary are soaring. 1500 sq ft homes, 3 bed, 2 bath are going for over $400,000. And they are not completely renovated. I've purchased 2 properties within 0.5 mile from this Park, and both have seen considerable increases in value.

I am also getting good rents on these properties: $200 cash flow on one, and $100 on the other. Not huge, but with the appreciation and debt pay down (15 year mortgages) I am not too disappointed.

@Sean H.