All Forum Posts by: Stephanie Walker

Clayton is a rapidly growing area. I've been watching it closely myself as a potential for our next investment purchase. I've also been watching Hickory NC. I think there's great potential there for both midterm or long term rental strategies along with a strong potential for rapid appreciation. I own an MTR/LTR Property Management Company and have done extensive research in the area. Happy to talk you through options!

Finding a long term rental that cash flows with these rates isn’t easy. That’s the deal killer. I’d look at properties that have been sitting a while that may offer seller concessions to help with the rate or look at a different market altogether. 

I'm an MTR Property Manager in the Charlotte NC market. Have you tried reaching out to local LTR/STR management companies to see if they're familiar with MTR strategies? I know (for now) I'm the only one in my market who focuses on MTR specifically. I've met with several LTR/STR managers who have referred me business from those seeking specifically for MTR. They might be able to help point you in the right direction!

Most of our investor clients are from CA. I'm in the Charlotte NC market. I think it depends on what you're looking for. LTR is difficult to cash flow anywhere but I can get pretty close here with the right circumstances. MTR cash flows just fine. STR can perform fine as well.

If you’re looking for multifamily, I’d suggest you look at OH. Dayton, Cincinnati and Cleveland are some areas I’d been referring clients to look into if they want multifamily options!

I’d cut your losses.

Personally, I wouldn’t want to be cash flow negative $300/month for over a year.

What are comp rents looking like right now in that area? Because of the size, I’d look at what apartment complexes are charging as well - it’s not a true comp but it does affect marketability due to the amenities that come with complexes. 

If you were my client and after truly diving into the why’s, if it still doesn’t make sense, I’d cut it loose and deploy my money elsewhere.

I agree that real estate in general is a long term plan - but I like my money to make money.

The risk is the same for an unqualified "operator" of STR/MTR and an unqualified tenant. Their goal is to use your property to make a profit. If they can't make a profit, they are still on the hook to pay the rent. If they don't have the money, they won't pay the rent and you'll need to go through the proper steps and channels to evict. You need to make sure they can qualify to afford the rent regardless of whether or not they make a profit on your property. Think of it this way when you're going through the qualifying process: can they afford the rent for your property plus the rent/mortgage where they live? Most PM companies have a requirement where the tenants income needs to be 3x the rent per month.

There’s more to it than that - but it’s a lot to type out.

It's a popular strategy for those looking to get into STR/MTR and can't afford or can't qualify to purchase a home themselves.

Sounds like it could be good opportunity for you then. I would just be very, very diligent in your efforts to qualify them for your rental. People arbitrage when they can’t qualify to buy.  

What they're looking to do is called Rental Arbitrage. I would have them go through the same steps you would go through for a regular long term tenant. Background checks, credit checks, evictions, etc. and I'd look at how long they've been in business by looking up their LLC (if applicable) on the SOS website. Do you have an HOA at your property? If so, check your lease requirements. Lots of HOAs have 6 month or 1 year minimums. If everything checks out and you feel they are responsible, it could be a good opportunity. However, have you thought about maybe just turning your LTR into an MTR/STR yourself?

I’m biased because I’m based out of Charlotte and can’t speak as detailed about the Raleigh market as I can about Charlotte. 
I am pretty surprised that you’re finding Charlotte to be more expensive than Raleigh. I’ve not done a ton of research comparing the two recently but my general understanding is quite the opposite. We have a few investor clients that purchase here because it’s more affordable. 

Either way, I don’t think you can go wrong buying in either area over a 10 year span.