All Forum Posts by: Tom Matousek

@Jeremy Toney

Welcome Jeremy! I’m right down the road in Morganton. If you’re ever in the area feel free to reach out!

@Elena Coney

Both my neighbor and I have STRs in a similar mountain/rural setting. There was a small drop in demand initially due to COVID but has since soared. This increase could be short lived but travelers seem to looking for the rural setting.

Neighbor: 2/1 Cabin, 1200 per month.

Myself: RV site, 450 per month.

Hope this helps!

Really want to throw them off? Ask for an appraisal on a log home. First 285k, second 185k. Two weeks apart and both were “quality inspected” by a third party.

185k: We couldn’t find any comps so we had to use a Manufactured home 30 MILES AWAY because it had similar acreage.

285k: I think the log home across the street that just sold might be a good indicator.

@Kris L.

That was the joke between my family and coworkers after I closed. I explained it in the optional description but apparently that isn’t displayed anywhere.....

Thanks! I'm anticipating approximately 1323 per month fully leased after capex, reserves, PM etc. It's certainly a nice area, feel free to send me a message if you would like to know more about the market here.

Investment Info:

Small multi-family (4-units) buy and hold, value add in Morganton North Carolina

Purchase price: $172,000
Cash invested: $34,000
Appraised Value: $260,000

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

Economies of scale, location, value add and recession/coronavirus tolerant. Enough equity in the deal to leave room for first time mistakes and errors in calculations.

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

Located in a local news paper classified. 12 hours after the ad was posted an offer was submitted. After the seller seemingly fell off the face of the earth I happened to run across the wholesaler who scooped it up. We agreed on a price 9k above my initial offer. 

How did you finance this deal?

Commercial 30 year fixed, 20% down. 

How did you add value to the deal?

The purchase price left equity to work with but several minor structural issues were missed by myself and the inspector. A fair amount subfloor and joists were replaced due to termite damage. We will be converting units from  3/1.5 to 3/2 and complete cosmetic upgrade. (Came fully equipped with shag carpet and green toilets)

What was the outcome?

TBD. With the previous tenants, the property was at 500 per unit. Due to improvements to surrounding properties and lack of supply in the local market I'm expecting 875+ per unit (Neighboring sister units just leased for 850)

Lessons learned? Challenges?

• The rules are made up, read every document and assume the professionals have no idea what is going on. (This might be common in ruralish areas but I took the time to write this down as it unfolded.)
  
  Wholesaler's purchase agreement initially had the wrong address
  Insurance policy originally listed 8 units instead of four.
  Lawyer almost submitted articles organization as a manufacturing company and didn't know you could file for an EIN online.
  Few accepted digital signatures. (Renaming the PDF to Scan1234 seemed to ease most fears.)
• Lender required answers to odd questions like why so cheap, what do you know about the seller and added an addendum to fix the back steps.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The closing attorney was excellent and had a professional streamlined process. 

(Dear Inspector, since you're on here as well and if you read this no worries. I didn't chose you because of your experience as an inspector ;) )

@Tyreon Brown

Post the name of your town and potential employers will get a keyword alert. Also, pay close attention to your grammar. Since you have the ambition, the next best thing is to work on is your presentation.

@Francis Liu

Even if the leak is no longer active thoroughly inspect all framing and structure near the source. This could save you thousands. Unlevel floors or where the floor begins sinking below the wall is a good indicator of rot and frame damage.

@Taylor Phillips

Currently in the process of closing on a property through a wholesaler with @Harry Marsh. So far the process has been very smooth and their reps are very responsive. I highly recommend.

@Andrew Gratz

What part of NC are you in? The wholesaler I’m working with has had a lot of luck with these types of properties. She currently purchases, then lists them as lease options recouping her initial purchase price. Not my cup of tea, but she has been producing fairly stable income from this strategy.