All Forum Posts by: Troy Gandee

@Brandon Vukelich Same here. My partner and I would still do it when the seller was made abundantly aware of the situation and it was the right solution for everyone involved. However, for the last 5 years, we almost never went into an acquisition/disposition with that strategy as the goal. We would only go that route if it was the best option. We generally buy the property ourselves because that's what our marketing says we intend to do. Then we wholetail or flip it from there. 

I'm not saying all wholesalers are bad apples, but I have seen way too many vulnerable homeowners be taken advantage of for this not to a problem. It was just a matter of time. Part of the issue is that a lot of these wholesalers will immediately market or list a property they don't yet own for like 50% more than what they have it under contract for. That definitely brings a spotlight to that practice. The REC and the opponents of wholesaling frequently use the term "equity stripping" when they refer to the practice as we know it. 

I'm not stating that it's inherently wrong, but aspects of it have gotten out of control. Especially in a market like Charleston where affordability has become a huge pain point in recent years.

@Sean McDowell @Jay Hinrichs When the wholesaling legislation first passed in June, the general consensus was that wholesaling was dead. Most attorneys in Charleston refused to close any more assignments. Then a couple of the more maverick attorneys felt that the legislation was a little loose and that you could continue assigning as long as your went about it very delicately. Basically, you couldn't make it look as through you were selling the real estate. ONLY the contractual position. I personally felt that was not the clear intention of the bill, but they were willing to stand by it. They also made the parties sign some kind of disclosure stating they were doing everything legally. 

That lasted a few months, but the REC recently released a new bulletin clarifying the legislation and basically saying that bill was meant to stop all forms of "wholesaling" as a business practice. They were pretty firm in the bulletin to say that it needs to be ceased ASAP. This does only apply to residential properties, so commercial and raw land can still be assigned the way it used to be. Assigning contracts as a legal instrument when necessary is still fine, but not as a business practice.

Gonna be interesting to see how it affects the investing community here, but I've been encouraging people to just take the title for the last couple of years knowing this ban was coming. And there are a couple of folks in town who are suggesting using installment contracts as workaround, as well.

@Anne Christensen Feel free to reach out when you're here. You can shoot me a DM and I'll send contact info. If you're here on Feb 6th, we'll be holding out big monthly investors meetup from 6-8pm through REI Central. We usually have 80-100 people in the room.

Hi @Anne Christensen 

We're all investors over at Maven Realty. One of us will be happy to help you if you haven't found someone yet!

@Minnina Smith You guys have a great meetup there. I believe it used to be called REI Live, but is Deal Finders or something like that now. You can find them on Facebook.

@Jose Remor These are great suggestions here. I would recommend you really take your time selecting the right software. Do some demos and make sure you feel very comfortable with the one you ultimately select.

If you're unsatisfied, it's a huge hassle to have to transition later when you have multiple properties under management. Don't choose something overly complicated. You want it to be easy for your tenants to use to avoid non-payment or technological issues on their end, too.

@Eli Fazzo The 6% rate is a bit of a misnomer. That's the starting rate and then there are millage rates that bring it down to the actual tax rate. The 4% and 6% rates are just the names given to differentiate commercial and owner-occupied.

The 6% rate is obviously significantly high, but it's fairly average nationally. It would likely be comparable to what you pay in the NE.

Just google "Lexington County tax estimator" or whatever county you're interested in and you'll usually find a web tool from the County you can use to estimate the tax bill based on the previous year's assessments.

There is also a law called the ATI tax exemption that can potentially lower than 6% rate by 25%. Just look that up. There are conditions that must be met.

Also, I believe the taxes are higher in Richland County than Lexington County, but I don't like there, so I don't have personal experience with that. I've just heard that from many people over the years.

In general, SC is experiencing an economic renaissance, so it is a good time to invest here. 

@Mark Hamilton Feel free to check out REI Central. We have the most activity and most frequent groups (1 main meetup and 3 subgroups each month). Our annual pass is stupid cheap for what we offer.

I will say that while we do have a whole lot of sub2 investors that attend these groups, we don't put an emphasis on that strategy. It's a pretty murky niche and everyone does it a little differently, so we don't want to give platform to anyone that may give risky advice. There's a glut of sub2 education/information out there these days, so you certainly won't lack in that regard.

Some of our members have done hundreds of them without issue, so just seek those people out at the meetings and talk to them.

Hi @Constantinos Zavos. @Patrick Roberts is correct. ATI is only applicable for 6% (commercial properties). If this is a primary residence, it does not apply. That's mostly because we already get the 4% residence tax rate for your primary residence, which is a very low tax rate.

As long as what you purchased is commercial, you can apply for it. The exemption is either the previous assessment amount or 25% less of the new assessed value, whichever is higher. It's not really worth doing if you don't have enough of an assessment difference to actually get a 25% reduction. A lot of properties don't enough spread to even meet that minimum, so it just ends up being the new assessment ratio.

It's actually really easy to fill out the application and submit, but they will not respond and tell you whether or not it's been approved. You basically don't know until you get the bill. Bills are already out for the year, so it may be difficult to get them to adjust it for this cycle. The bill is due in about 45 days.

I'm not sure what county you're in, but here's a link to Charleston County's form. I have also heard that they will not take these retroactively for the previous year, but it's still pretty vague.

https://www.charlestoncounty.org/files/forms/tax/ATI-Exempti...

@Kyle McShea Like @Sarah Kozlik said, you should definitely join us at REI Central if you plan to get more involved in the investing space. We meet monthly and have 3 sub-group meetings the rest of the month for our annual members.

@Jacob D Adamczak has helped a lot of people purchase house hacks. He's a fountain of knowledge with this strategy if you need more assistance.