All Forum Posts by: Troy Gandee

@Pat Lulewicz @John Underwood is correct. Each individual municipality in the Charleston area has their own rules and regulations. The majority of them now have STR requirements to secure a permit. Some are much more stringent than others. It really depends what areas you're interested in and what your budget is. There are a still a couple of areas that do not have permitting criteria, but it's only a matter of time until they're regulated, as well.

@Lindsey Johnson Check out REI Central. We have a big networking meetup the 1st Thursday of each month and them smaller, more focused groups the other Thursdays of the month. You'll meet most of the active investors in the market there.

@V.G Jason Yes, it usually will come from the downpayment. The listing agreement usually says that the commissions are paid by the seller from their proceeds. Since there's no change of a purchase money mortgage, the only funds for the commission to come out of it is the down payment. It's all negotiable, but it most often comes from the down payment.

@Michelle Cuggy

1) You can't purchase an investment property with 3.5% down. The lower down payment options are for owner-occupied homes. Most true investment property loans are 15-25% down. Most people start with house hacks because you can put 3.5-5% down on a primary residence and then eventually move out and make it a rental property.

2) You can find wholesalers by attending REAI meetings, meetups or finding them online. I will warn that most wholesalers only want to deal with cash buyers and most will want to work with investors that they feel have experience to close the deal. I don't typically recommend trying to purchase assignment/wholesale deals for your first home. They usually need a lot of work, don't offer much due diligence time and often require non-refundable deposits.

3) It is normal to view a house more than once. You can take a contractor. In our market, 2 showings is totally acceptable. 3 is a little much. More than 3 is very uncommon. Usually, a 2nd showing is done to confirm the buyer really wants to make an offer. I would recommend 1 general showing. If you really like the property, then take your contractor for the 2nd showing to confirm a general rehab budget.

4) It's recommended you talk to a lender before you start hunting. Ask for a pre-approval letter. They will pull your credit, gather some initial financial information and give you a general estimate on what you can afford. Most sellers won't entertain an offer without it, so it's important to do that ASAP.

5) You can try to gather as much information as possible on sites like Zillow, but the historical sales date is difficult to find. You'll usually need a real estate agent to help you comp the home because we have access to the sold records in the MLS. You can also use the tax records, but they're not easy to navigate. This is one of the reasons I would recommend you have an agent assist you. Especially when you're new and don't have experience with the contracts and protocols of the sales process.

@Ray White REI Central is the group I co-founded with some investor friends. It's far and away and biggest meetup in the area. We have a big meeting the 1st Thursday or each month and are in the process of rolling out smaller groups the other Thursdays of the month. We currently have a commercial investing even the last Thursday of each month. You can purchase a ticket at the door or online before the event. 

@Neil Sample I'm in Charleston, but very similar market to MB. In general, long term rental management rates are 8-10%. Most managers also charge fees for new leases, renewals, a percentage of rehab budgets when renovated, etc. 

STR management rates are usually 20-25%. Much higher rates, but a lot more work. That 20-25% does not usually include cleaning/turnover fees. Those are usually a separate expense. Plus, you'll have to cover all the utilities unlike a traditional long term rental.

@Christopher Young No problem. The bar for entry is pretty high these days. We're saturated with STRs. I'd suggest one of the more beachy communities. They're always more STR friendly. The prices are pretty similar anyways. It all depends on your resources. Feel free to reach out.

@Christopher Young I think you're referring to the STR overlay. That's in the Canonborough-Elliotborough area, but it's just a sliver in those neighborhoods. In order to operate an STR full time with no owner-occupancy restrictions, the property must be in the overlay and also zoned commercial. It's pretty difficult to find a property that checks both boxes. There are quite a few listed, but they're expensive. They're trading as more of a hotel than a residential rental.

City of Charleston has 3 "zones" and the STR overlay. You can technically STR in any of the zones, but they all have degrees of owner-occupancy restrictions, permitting restrictions, etc. Downtown is obviously where the cashflow would be the highest, but there are quite a permitting/zoning restrictions to overcome there. The City's website has some really helpful maps and information. We can certainly help you, but just wanted you to know that it is pretty difficult unless you've got the resources to basically buy a boutique hotel.

@Christopher Smith Myself and my company specifically help investors. It's about 50% of our total production. The biggest advice I can give you is to BE AN INVESTOR. Too many agents try to jump on this investing bandwagon, but have no practical working knowledge of how any of it actually works. They may know the formulas and generics, but they've never had to evict a tenant or get a 3am phone call about the brand new HVAC system being stolen from a flip. Start investing yourself. That's the best way to prove to investor clients that you know what you're doing. 

Secondly, BP used to be a phenomenal place for getting yourself out there. IMO, it's become very watered down over the last few years. I just don't get the same value I used to out of the forums as an investor or service provider. There's much less activity than there once was. Something mechanically changed when the company was sold a couple of years ago. BP was doing a marketing package for vendors for a time, but the leads really trickled down. I just stopped getting them. I believe they overcrowded the market.

Otherwise, find your local REIAs and start plugging in. That's the best way to meet real investors in your market. They're not your out of state investors, but they're the real players in your space. Get to know them ASAP. It took me 3 or 4 years of investing myself to start to build a name as an expert. Now we're the primary investment focused brokerage in our market. We'll do about 250 side amongst 40 agents this year. Well over 100 of those would be investment properties.

@Jocelyn Canfield @Jeff Copeland is exactly right. The 6% commercial tax rate is the default rate. The 4% owner-occupied rate is an exception that the owner-occupant must apply for in order to be granted. It isn't a higher rate for the investor, but a lower rate for the owner-occupant. The 4% rate makes SC one of the cheapest in the country as far as property taxes are concerned. The 6% is frustrating, but it still lands us pretty low in the tax affordability category.

More importantly, taxes collected for the 6% rate are largely used to fund our schools, which need all the help they can get. Without the 6% rate properties, our education system would be even worse off than it already is.

I'm an investor and broker, so I welcome investments from out of state owners, but our metro areas have become borderline unaffordable for low-middle income residents. The 4% exemption does also help affordability for in-state residents more than most people realize.