All Forum Posts by: Chuck Hollowell

@Dawn Brenengen 

@Mike Ritter 

Thanks for the feedback!  I'd love to hear from any folks familiar with the Raleigh rental market about how hard it will be to rent this house in late fall.  If all goes according to plan with the short sale, we would close in October or November. I'd need a little time to get it cleaned and ready for tenants. So, I'm concerned about trying to find a tenant at that time of year. Thoughts or experience?

Also, what's the best way to get the lease term onto a schedule where it will turn over in the summer?  The insurance quote I got from USAA does not insure rental property for leases less than one year (I can get another quote if needed). 

Thanks!

@Dawn Brenengen I've written off the 2% rule for the Triangle market (at least for the areas I'd be comfortable investing in). Yes, this is SE Raleigh, but not the sketchy parts. It is close to Garner in one of the newer subdivisions. Thoughts on vacancy issues there?  Or the amounts I've got for repairs and capex?  I think I'm likely being pretty conservative there. 

@Chris Stromdahl yes, there would be a 20% down payment. 

I've run these numbers through a couple different SFH rental spreadsheets and the BP calculator. But I'd love to get a check on any of my assumptions from folks with more experience. Thanks!

I am working on my first buy and hold purchase.  Seller is in pre-foreclosure and has a short sale firm helping him sell the property.  

Home was built in 2009.  I had a home inspection yesterday and there's basically nothing wrong with it.  Just a couple minor repairs.  It's in a subdivision with new homes being built across the street priced in the $140's and $150's (with more square footage).  

Home is 1585 SF, 3 bed, 2.5 bath, 2 car garage.

Here are the numbers:

Market value with minor cosmetic repair (paint, carpet) = $135,000

Short sale price = $110,000

Market rent = $1,150/mth

Property taxes = $1,400/yr

Insurance = $700/yr

Maintenance/Repair/Capex = $1,500/yr (I'm thinking this is pretty conservative given the condition of the house, but let me know if you guys think otherwise.)

HOA = $480/yr

Vacancy = 10% (This one makes me a little nervous because there are a good number of other SFHs that are rentals in this area. American Homes 4 Rent has been very active in this area. I ran the numbers on rentals on MLS in the immediate area and the average days on market for similar properties was 56.)

Mortgage = $459 (conventional financing with 20% down)

I would do property management myself.

With these numbers, cash flow is >$200/month.

What do you guys think?  It is nowhere near the 2% rule, but nothing in my market (Raleigh, NC) will come close to that (at least not in any areas that I'd be interested in).

My other thought is that I would be getting it at enough of a discount that I could possibly do a "paint and carpet" flip.  I'd rather buy and hold if the numbers make sense, but the vacancy factor seems like a bit of a wild card, so I'd like to have another exit strategy.

Thanks in advance! 

Check out this blog post on how to hack your housing. If you are just out of school, this might be a good strategy to get started. I wish I had thought of something like this when I was your age. Congrats on focusing on REI at a young age and good luck with your investing!

http://www.biggerpockets.com/renewsblog/2013/11/02...

@Christopher R. 

I am a new investor living in Cary as well, so I can appreciate your question. It will take some hunting to find the good deals in this area. One newbie tip... If you want others on the thread to know you responded to them, you need to type "@" followed by their name. When you type the first few letters of their name, it will pop up below and you can select it. That way you can keep the conversation going. Good luck with your investing!

I am working on my first investment property purchase. I have found some short sale opportunities on the MLS that I am interested in pursuing. I am trying to decide if it makes sense for me to connect with a buyer's agent to assist with this.

I understand that conventional wisdom in most situations is to get a buyer's agent.  But, I have heard it suggested that if the listing agent in a short sale is getting an additional commission, he might be motivated to work harder to make my offer work.  Since this market is hot, I expect multiple bids on these properties.  Is the short sale situation one where it makes sense to just work with the seller's agent?

Or is it just smarter to try to connect with a good investor-friendly realtor and let them assist me as a buyer's agent?

In case it impacts the analysis, one of the listing agents is using a third-party company to assist with all the paperwork and negotiation involved in the short sale. Presumably he is splitting his commission with that company and he's not getting involved in the day-to-day work required to help bring it to closure. So I feel comfortable that that particular listing has folks involved with expertise in this area. The other listings do not have such a third-party company involved.

Thanks in advance!

Welcome to the Triangle and BP!  The Triangle is a great place to live.

Happy investing!

Thank you all so much for the warm welcome!

@Dawn Brenengen Nice to meet a fellow Tarheel on BP!  That's great that you've had a good experience with properties near NC State.  I having really been considering rentals that would attract students, but I should probably look at those as well, especially given how hard it is to find good SFHs in good neighborhoods below retail. 

@Michael Jobe Nice to meet you, and thanks for the heads up on the TREIA meeting tonight.  Getting to a local TREIA meeting is on my to-do list.  Unfortunately, I won't be able to make it tonight.

@Jonna Weber Thanks for the greeting. The crazy thing is I just listened to your podcast yesterday! I told my wife she had to listen to it because you guys sound so similar to us in terms of goals, stage of life, etc. You guys are much further down the REI path, of course. But hearing stories like yours is very encouraging and inspiring. Great to connect with you!

Hello, BP!!  I wanted to drop a quick note to introduce myself to the BP community.  I've spent the past few months devouring as much BP content as I can.  The guides, articles, and forums have been great.  I have also been burning my way through the podcasts, as well as several of the books mentioned on the site and in the podcasts.  I am very glad to have found this amazing resource!

I attended UNC-Chapel Hill undergrad (Go Heels!) and live in Cary.  I don't have a lot of real estate investing experinece yet, so am still neck deep in my education phase.  My wife and I have set an initial goal of buying one single family home a year for the next ten years.  I'd like to find that sweet spot of positive cash flow and appreciation potential.  Our plan is to use the passive income to supplement our retirement.  I'd also like to include our children in the business and teach them about making wise investments at a young age.

I have started looking at single family homes in Raleigh and surrounding areas (Cary, Apex, Garner, Wake Forest, Durham, etc.) and am learning that the market is very tight for good SFHs at a good price in this area.  I think we will likely need to find a property that needs a little work and use a "hybrid" investing strategy. 

I'm looking forward to this REI journey!