All Forum Posts by: Wendell Butler

 1.) It was a true private money lender, a person that I knew that had money to invest.

2.) It was 5% interest which compounded because I did not pay until the refinance.

3.) Yes, instead of paying monthly payments to the private money lender, I negotiated to allow myself to pay at the end when it is refinanced. This allowed me to use the additional money for repairs/improvements. Also the lender was fine with this because worst case scenario if I failed, he would just take the property which would have already had increased equity in it from the improvements/stabilization I would have been making. So they would have won either way.

4.) Yes, so I bought the property for $470k, put about $110k into rehab, so around $580k total. If you add the interest I owed the private lender, then it is at around $600k total owed. The property is now worth around $850-$875k (appraiser tabbed it at $800k-$825k, but I know the market better and know it can sell for more), so I have around $250k-$275k equity in the property. I then refinanced at 75% LTV of the appraised $800k-$825k, paying off my private lender the $600k owed and now I own the true $850-$875k property with a loan of $600k on it with no money out of pocket. The property should be worth around $1M after a few years of continuing to increase rents as well.

 That is true, for some reason it wouldn't let me space out into paragraphs when I initially posted. Maybe it was too many characters or something.

Hey Craig! Midterm rentals are a great way to get extra cashflow. Usually you can get an extra $400-$500 from them. You do have to furnish the unit and include utilities in their rent though. Think of it like a long term rental and short term rental had a baby. The good thing about mid term rentals is that you know the travel nurses/professionals contracts (3-9 months or so). Knowing their move in and move out dates in advance, you can time the vacancies and keep the units filled nicely. 

Check out the site furnishedfinder.com. That is where you can market to these individuals and also see the stats for average midterm rents of the area. Worcester has a few large hospitals like Saint Vincent's, UMass and others so it is a great niche to get into!

Hey Emily! Currently I am about to refinance (closes January 30th) and I will get all the money back to my private lender, $0 out of pocket. Basically I got a private lender to fund me the full original purchase cost plus renovation costs for a preferred return on their money. I then had 1 year to finish the project, which once this refinance is finished, it will be 11 months or so. I increased the equity of the property to pay back the lender fully in a 75% LTV (cash out refinance). I then used the leftover cash out to pay the closing costs. The bank did take their sweet time with the refinance unfortunately, but I am glad it is finished and I can move onto the next project. I owed my private lender at the end of the day around $600k total including the interest, which the refinance covered. Now I have this 8 unit property with around $250k+ equity, that is now cash flowing, for $0 out of my pocket. I also had the private money lender roll over the payments so I did not pay them monthly, just at the end of the refinance. This is a tax advantage for them as they didn't want to make money yet on paper from this for 2022 for tax advantages.

It is all about pitching to investors, understanding their wants and needs and having a track record of doing these things. With the market crashing, or heading towards a crash, it was easy to get a private money lender interested in investing in me in real estate, where I get them automatic preferred returns. Then worst case they take the property if I failed. If they kept the money in the market, they would have lost a lot of money, instead they got preferred returns from my project and now are interested in doing another since I was successful. 

Investment Info:

Condo buy & hold investment in Charlotte.

Purchase price: $337,500
Cash invested: $30,550

I bought this condo on 12/09/2022 to move to Charlotte, NC to continue my career in real estate. It is in a very desirable area called NODA and should be able to get great rent as well as good appreciation. Charlotte is a booming market and is only continuing to grow, plus I was born here and it always felt like home when I came back to visit (even though I was only here until 2 years old). I am not a huge fan of condos, but this one just made sense. It was recently rehabbed and there is only miniscule updates I need to do, if I want to. Capex and maintenance/repairs are at the bare minimum. It is probably one of the top condos in the complex renovated wise. I purchased the property for $337,500 with $7,500 back for seller credit to do a temporary buydown for my rate (since rates are currently high in the market currently), which I will then VA Streamline IRRRL once rates come down in a year or two. I purchased this using the rest of my VA loan eligibility which allowed me to secure the property for smaller down payment/closing costs, as well as avoiding PMI. I will have a roommate to help with the mortgage costs as I live here. They will be able to pay about half of my mortgage (PITI)/utilities, which is great. The future plan for this property is to mid-term rent to travel nurses. The rent you can get in this area for travel nurses is around $2800 a month and it is easy to keep vacancies very low. With mid-term rentals you do need to furnish the property and include utilities in the rent, so it will be some out of pocket costs for that, but I am living here for a year or two and need furniture anyway. It is sort of like AirBNB and long term rentals combined, but you get higher rent and less vacancy time due to knowing the travels nurses contract periods (3-9 month periods) to plan ahead. It is also less work than an AirBNB. I will leave the furniture I bought for when I am ready to move again. This property should cashflow about $300 a month once I do move out (maybe more if rents continue to increase) after all expenses (mortgage, taxes, insurance, Capex savings, repairs/maintenance savings, HOA fees, etc.). I will manage this myself as mid-term renting is not very strenuous and I will be in the area for a while. This is not a home-run property, but a nice little base hit that is introducing me to the midterm rental market which is great!

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

I was moving to Charlotte, NC and the multifamily market here is very bare and overpriced at the moment, so another multifamily did not make sense numbers wise currently. I had to explore other options, so I found the mid-term rental market to travel nurses and went with that route in mind for the future.

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

I used a realtor that is investor focused and helped me find properties/condos that had good future mid-term rental opportunity. Condos do have rules for renting, so we had to find one that worked with mid-term renting and this condo fit it perfectly. 30 day minimum rentals allowed.

How did you finance this deal?

I used the rest of my VA loan eligibility to cut down the PMI expense allowing the property to cashflow more. I also got seller credit to do a temporary rate buydown to cut the costs for the first few years. I will look to do a VA IRRRL when rates drop down in 1-3 years.

How did you add value to the deal?

It was already renovated and very nice, but I did need to buy furniture for the whole place and make it very nice for future renting. Kind of like what you do with an Airbnb, but with the mid-term rental goal. Making the unit as nicely furnished as possible will warrant higher rental income.

What was the outcome?

This property will be a good long-term hold that will cashflow $300 a month to mid-term rent travel nurses when I move out. That cashflow will only increase with the growing rental demand in Charlotte, NC!

Lessons learned? Challenges?

This market is hard to find deals, but you do not need home runs every time. Get a base hit here and there and in the future they will feel like homeruns! I also learned a lot about mid-term renting to travel nurses which seems like a great play in real estate. Higher rents, less vacancies, and less work than an AirBNB, but a tad more work compared to long term rentals.

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

Yes, I worked with Evans Wright out of Charlotte, NC and also Envoy Mortgage as the lender. I am a Loan Officer for Envoy Mortgage as well, so I am a little biased ;)

Hello everyone!

I am starting to look into property managers that can take over my 10 units, some in Worcester, MA and some in Putnam, CT. I would like one management company to handle them all as I am looking to move out of state shortly. Gross annual income for these properties combine average $145k about.

If anyone has any recommendations of some management companies that do a great job let me know.

Some key aspects:

1.) Want low turnover (obviously) and fast turnover when it occurs with touch ups to the apartments for the normal wear and tear.

2.) Want increases in rent yearly to adjust with inflation/costs. I usually do 3% increase every year and if one turns over that isn’t at market rent I would fill it at market immediately.

3.) Great background checks (no evictions, felonies, sex offenders etc.), I like at least 650+ credit, 3x rent, first last and security (or first and 2 months security), around 2 years consistent work history.

4.) 24 hour service in case something goes wrong for quick maintenance. As well as good lawn care/snow removal.

5.) Looking for around the 7%-8% range for costs.

These are low maintenance properties that I have BRRRR'd that I really only need help with turnovers (hopefully it is low) and obviously some repairs/maintenance (rarely come up), lawn care, and snow removal.

Let me know if anyone has some recommendations!

 Hello Evans! Thank you for that information. Yes Charlotte is awesome, I was actually born there and then my parents work brought me up to New England, but every time I visit Charlotte it feels like home. It is looking like I will be heading back home! I would love to connect and talk more about real estate, especially in the Charlotte area as it is approaching the time I will look to move there. I will shoot you a text soon.

Hello!

I am planning on possibly moving to the Charlotte, NC area around the end of the year and will continue investing in real estate. I'm looking for a multifamily to purchase and house hack down there as I continue investing in the area doing multifamily BRRRR's, flips, commercial properties etc.

It seems like there are very few multi-families around that area that come up on the market, well less than where I live currently. Any realtors in that area that may have some knowledge or know of some off market inventory?

Also I'm looking to either BRRRR multifamily/single families for LTR and also focus on purchasing large residential commercial buildings.

Commercial larger properties are my main focus, but it seems multifamily/single family BRRRR's/flips might be a good play in the area as well.

Looking to connect with anyone in that location as well!

@Lucia Rushton Yeah a lot of nicer houses are for sure. Those aren't really what I am looking for though, I can definitely try to keep you posted on what I find in the BRRRR/Flip/Multifamily target area!