All Forum Posts by: Yizhen Su

I bought a property in Lumberton, NC.  It was just before Hurricane Florence where the Lumber River rose 25(ish?) feet.  25% of the town flooded out, as in house under water.  My property was located next to a flood zone, closer than that on your map.  The water came up to my backyard porch patio that was basically a level concrete block but never approached even the crawlspace, it was 10 feet out from it.  My house sat 3 feet above the crawlspace.  (I did some research before purchasing it and determined it was indeed elevated enough to avoid a major flood since in 2017 they had a "once in a lifetime" flood and it did not get touched in the year prior.)   So I think as long as your house sits high enough, and the water dissapates enough, it's safe.  It depends on the drainage around it, how well it's situated, and when was the last time the reservoir over-flooded and what was the result?

I invested in a single family home 5 years ago, the house has appreciated to twice the sale price, the market was very hot and even in poor condition, it sold nearly at market so after putting in 55k of repairs into it, I was able to rent it out and make a good return up until last year when the area's market started cooling off a bit. I want to exit that property eventually with some cash in hand as it has appreciated a good deal in order to invest in a different state where the market is much better.  I don't have a steady "job", lost it in Jan and haven't found a steady one, just been able to land a "gig" that pays well but it's not steady, I have at least 5 years of documented rental income from that house and others and it's currently rented out until Aug 2021.  I don't qualify for traditional bank loans or home equity due to the high amount of government student loans (doctoral school) and I'm on the PAYE plan so there's no expectation to suddenly pay it all back at any time and it's capped at 10% of my earnings every year. Despite the lack of steady employment at this time, my credit score is still stellar.  I've found a few properties, have a very good contractor that is more reliable than the others I've worked with in previous years.  Now I need to figure out how to fund my next purchase and I'm open to ideas, I'm kinda new to the borrowing part as most of the time I've been able to fund the purchases myself with cash but as I don't want to sell the house with the tenants in it - I know them and they are happy working with me and the market may recover in that area after next year so I may make some cash flipping and pay back the loan completely or just sell the initial house, I want to still take advantage of the investment opportunities presented to me utilizing my cash investment I spent previously as leverage.  Some of my professional colleagues that have known me for years have offered to fund me but I always get weary of going the friends and family route when there's no clear lines or rules so I just wanted to know 

1) how do people fund their projects with cash tied up in properties?

2) what kind of interest rates do you guys look at for flipping or short term? 6 mo with 10%? i.e. What is fair? (I'm working in NC and in the 50k-200k range single family homes)

3) Any recommendations for lenders?

House I'm hoping to leverage with numbers:

Purchase: 3BD 2BA 122k, 120k purchase price, 2k fees

Repairs + furnishing: 55k: I hit the jackpot and "found" a pipeline for another bathroom which was added, kitchen had to be redone completely

Total cost: 177k, rented furnished to students

Ownership: 5 years; total rental income at approx 80,000 total for the 5 years

Current estimate sale price by experienced realtor in the area, she said we may get more if I make a few changes and change the office into another bedroom; 3BD 3FullBA (possibly 4BD): 240,000, after fees, commissions, minor repairs, and taxes: 204,000

Total gains with sale: 284,000-177,000 = 107,000 after 5 years while I worked a full time job and that's just one of my properties.

I'm not saying there's no deal to be had (I lived in that area for 2 years), but in general do not expect military base and surrounding area property values to increase much beyond 200,000.  Also there's a hard number limit on what the military is willing to reimburse for housing as well as "future business" investment - last I checked was 500,000 for personal businesses/house investment.  So if you work in a certain price range you may be able to make it work.

Zillow presents an instant gratification opportunity. I recently went to see an investment property with a realtor that contacted me after I clicked interest in a city I've never invested before. she literally replied to me about five times in one day and I was hooked. I had no idea who she was beyond a first name and what brokerage she was with or what she did has an experience realtor but her responses definitely got me going to see a house with her. After some basic networking I think I will be working with her later on. I definitely think a proper response and timely is a plus. I would throw the estimates in the trash from Zillow. It takes a radius of property values instead of the neighborhood. Basically if your wealthy million dollar neighborhood happens to be located next to a bunch of townhouses that are owned by people in the middle class, their townhome values will be calculated in the estimate for the 8-bedroom 5 garage with a pool mansion. It just doesn't work. The best way I've seen estimates done is basically looking for houses sold in the last 6 months and comparing it from the same neighborhood.

Investment Info:

Townhouse private money loan investment.

Purchase price: $72,000
Cash invested: $20,000
Sale price: $167,000

Rented for 900 after HOA+Fees+Maintenance sold for a bigger investment.

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

Susan Craig, AMAZING seller's agent. Always prompt, practical, got the best deal, sells it like she owns it, she would be selling my other properties in the area as well!

Investment Info:

Townhouse private money loan investment.

Purchase price: $72,000
Cash invested: $20,000
Sale price: $167,000

Rented with 900/mo cash flow after HOA+Fees+Maintenance, sold for a bigger investment.

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

House was foreclosure, had good bones.

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

MLS - traditional RE agent

How did you finance this deal?

Cash Loan from private lender along with personal investment

How did you add value to the deal?

cosmetic changes, buy and hold

What was the outcome?

sold for twice the cost and + 7 years of 9000 per year rental income

Lessons learned? Challenges?

Townhomes are harder to manage than single family housing with HOA restrictions. I don't enjoy HOA managers.

Feel free to correct me but can't you just put the vinyl hard plank on and let it float with some padding for the dips and then just take it up and repair the flooring correctly once you've got more cash freed up?

That's my question, since I reside in NC and have my primary residence in NC but own property in GA, should I get a GA attorney (who would be familiar with the local reg) or a NC attorney (who is more conveniently located to me)? I'm assuming the tax laws for real estate are different in each state too so should I get a CPA in NC because that's where I'm at?

I haven't sold the houses because I haven't had time due to school and it's been 1 year since I've moved away from that area and there hasn't been any major issues other than calling to make sure the lawn maintenance guy actually showed up instead of saying he did so it's been low maintenance.  The renters I rent to are high quality professional students from my school with a lot of work and not enough time to do recreational things like throw a party at the house. The equity in the houses keeps going up in value and while the momentum has definitely slowed their value as a rental is greater than the profit from a single sale of the house because of the low cost of my initial investment. For example House 1 I purchased at 72,000.  It's current estimate value based on neighboring sales is around $140,000.  The house net profit is $900 as a rental per month. That's $10,800 a year.  It's rented out for 1 to 2 year contracts due to the nature of the school. So far I've rented it out for 4 years (including next year), earning 15% of my initial investment per year after property taxes, insurance and saving for maintenance fees every year.  I want to be clear that I could be asking up to $1100 net out of that property as comparable property in the area rent for higher than that with occupancy but I give a discount to students from my school in order to attract high quality renters as well as give a break to medical students like myself.  My other house performs similarly. Due to the school growing in the area (they are adding more degrees like a physician's assistant degree) and they are currently at 60% occupancy of the land they actually own in the area, you can see there's only growth potential for a rental market within 1 mile of the school itself for a while so the equity will continue to increase in value while I continue to collect rent at the local market price.  I think selling out at this moment may not be the best idea until the school is at least done growing and as if right now I have no urgent need for a cash infusion.  The downside monetary wise to selling is that if I report a high gains on my income I will be told I made too much money by the government and need to pay more of my student loans back right now increasing my monthly payments to the government black hole and lose that investment profit and equity leverage I had before I sold.

Hi, I'm hoping for some advice from more experienced people.  Maybe this post isn't original, maybe some already had this problem but I couldn't find a message thread about it so here goes.

About 5 years ago I purchased a house near my medical school since the school did not have student housing on campus. It was post 2008 and the market was horrible near ATL and everything was being sold for 50% or less of it's value so I bought it with cash from a family loan that I can pay back at my convenience without interest and lived in it. While I was there I had received rent for living expenses and when I had to move out of the area for training 2 years after purchase, I rented the house out to a couple of colleagues thinking if I had to move back there for the next phase of my training then I'll have my house back. When I did have to move back at year 3 I realized that the housing market was returning to normal in the area and the house was worth 75% of it's original value before the crash. So I did a business turn and bought another house nearby with the same financing deal as the first house within walking distance of my school for about 75% of it's value but needed a LOT of work (new roof, fence, kitchen, 3 bathrooms, new flooring and some electrical work). I did break even on the fixing in estimated worth in the current value of the house and I am making good money on the rent. It is also rented out as a furnished house because that was the other thing I recognized lacking in the market I was in. I kinda got the whole buy low, rent competitive, plan to sell high later part down. But I'm totally confused on what to do with my accounting/bookkeeping, taxes, I have been using TurboTax for personal investors and I feel like I'm doing it wrong somehow because I'm guestimating and I want to do it right. Some people are advising me to put it in a LLC to protect my investments and I feel like that would be a good thing but I have no idea what to do with State boundaries because I've recently accepted a training position in NC and my properties are in GA. Do I need a NC property lawyer or a GA lawyer? I'm living in NC and now I'm looking at getting a mortgage for the first time for a place I'm going to actually live in for the next few years of my training. Should I attempt to sell my properties as rented out properties and see if any investors are interested? Should I just hire an accountant and a lawyer to make my life easier?