All Forum Posts by: Troy Gandee

@Edward Galan Herrera Taking advantage of the VA loan is a great resource for getting started. I've helped quite a few people stationed here use the VA loan to purchase a primary, then convert to rental, refinance and do it again.

@Nathan Hawkins We have a monthly networking meetup called REI Central for investors in the Charleston area. I'd suggest you check that out to network and learn as much you can.

@Jerell Williams I would say it depends on the extent of repairs needed. If it's pretty minimal, you can try to assume the cost of repairs yourself when you view the home. If it's extensive, you'll want to get a contractor to draft a scope of work so you know more concrete figures. Once you've been doing this stuff for a while, you don't always need to have a GC to scope it. I can usually get pretty close assuming the costs myself. However, you should be able to get yourself a due diligence period where you can inspect and have contractors walk the property while you're under contract. Some of the off-market transactions don't give you much due diligence time, but tradition on-market transactions typically do.

@Kari Alford You can usually access the county's tax information system to see mortgages that have been recorded. It does not show a current balance there, but you can usually estimate. We have access to that database fairly easily as real estate agents in the area, but it's a little harder to find it from the public facing side. 

@Shane Abbott I always suggest smaller agencies when possible. Large brokerages like them do have some advantages with marketing and resources, but I find that you can get lost in their system and not get great care. I sent a full price, cash offer to one of their agents a few days ago. I never heard back from them. I had to reach out a handful of times and eventually CC half their team to get a response. As a seller, I would want a full price, cash offer in my hand ASAP. Similar to what @Mark H. Porter said, I don't find that they like to co-operate with other agents much. They seem to try to keep both sides of the transaction for themselves, which is not usually the best service to the seller.

@Laura DenHaan that's actually the first that I'm hearing of this, but I would be extremely surprised if this came anywhere near serious consideration. The majority of our state lawmakers are conservative, so they don't usually legislate favorably on the side of the tenant. Our eviction proceedings that changed a couple of years ago were an exception to this. Similarly, marijuana legislation is discussed pretty much every year, but rarely ever enters serious conjecture because we're still just very conservative politically speaking. We do have more Democratic representative in the State House than I think we've ever had, so this may make it farther than I'm giving credit for, but we'll see.

@Tray Ross 10k per client may not be terrible, but it really depends on the management cut per booking. If these are beach rentals, that may not be a bad number. If these are run of the mill homes in residential areas, you're not likely to make that 10k back nearly as quickly.

I would be more concerned with the net profit. That's always the bottom like when buying a business anyways. Revenue projections are fine, but the bank wants to know what you're netting. See if you can get 2 years P&Ls and balance sheets to see the whole story. The revenue in my brokerage is multiple millions, but 90% of that revenue goes back to the agents, so it's not nearly as impressive as it seems initially.

@Mandy Adams I do both in Charleston. Charleston is really challenging for long term at the moment. Prices are just too high to make much cash flow with rates like they are. Medium term still works quite well in most areas, but some specifically. We have a lot of schools, higher education, specialists and major manufacturers here. Those things all lend themselves well to medium term rental. Medium term generally doesn't gross as much as short term, but you're saving a lot on management and can avoid any STR requirements if you lease more than 30 days.

I wouldn't say Charleston is a great subto market. There are plenty of people doing it here, but I don't think that type of deal is plentiful in this market.

@Allison Hodges You can probably use one of those generic forms, but may be worth having a RE attorney draft the lease for you. There's also a standard SCAR lease that Realtors use.

Be very careful not to be discriminatory for any reason. Fair Housing Law are no joke. 

I would usually suggest having a parent be a co-signer for a college rental if the student doesn't meet certain credit/income requirements.

Definitely require that they carry renter's insurance. Even if you just bake it into the lease amount. College students tend to be pretty rambunctious, but it will not hurt at all to require them to carry renter's insurance. 

And be mindful of the sub-letting stuff in the lease. College rentals are pretty infamous for having roommate disputes leading to sub-letting or swapping roommates around. Just go ahead and set some rules for that in the lease. 

I would also put something in there about a maximum number of guests the tenant can have. This could reduce the likelihood of parties. Or if they do have a large party, this would be an explicit violation of the lease terms, which could help with eviction, if necessary.

I can only speak for SC. The due diligence only period is relatively new for us. Our contract changed last summer to remove the traditional inspection period know as the "repair request" procedure entirely. Now we only use the due diligence period in the standard SCAR contract. This gives you an agreed upon amount of time to do anything you want as far as due diligence goes and can terminate for any reason during that period. The due diligence fee is not typically regarded as a deposit meaning you don't have to pay it to an escrow or trust agent up front. It's usually a "fee" you have to release to the the seller in order to terminate the contract. The fee has to be released along with the appropriate notice document to fully terminate the agreement. For properties that are in poor condition, we're usually able to get the purchaser a fee of $0.00 because we expect there will be issues. For properties in decent to great condition, it's usually hundreds to thousands of dollars depending on the price range. Ultimately, all of this is negotiable, but this is generally how it works.