Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the "Small Builder" borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and "Ground up Construction Loans" for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Hello, this is Bill Fairman.
By the way, as you can tell, it's early in the morning for
me and it takes me awhile to get going even though it's after nine o'clock it's
still early in the morning.
me and it takes me awhile to get going even though it's after nine o'clock it's
still early in the morning.
So let's start again. Hi, I'm Bill Fairman with Carolina
Capital Management, my lovely sister Wendy Sweet. She's also my partner. And
we're here with, with our friend Dennis Hampton. He is a builder / developer
that we do business with and he's doing these remarkably beautiful Charleston
style houses in the city of Rock Hill. And for those of you who are not
familiar with Rock Hill, South Carolina is a bedroom community of Charlotte.
It's a beautiful community. We love it. Our office is based here and it's being
redeveloped all around the downtown area and making it nice and walkable. The
city has done a marvelous job promoting the development of the downtown area.
These homes are within walking distance of this beautiful park called Fountain
Park. And you're going to see pictures of Fountain Park and the house
throughout this interview.
Capital Management, my lovely sister Wendy Sweet. She's also my partner. And
we're here with, with our friend Dennis Hampton. He is a builder / developer
that we do business with and he's doing these remarkably beautiful Charleston
style houses in the city of Rock Hill. And for those of you who are not
familiar with Rock Hill, South Carolina is a bedroom community of Charlotte.
It's a beautiful community. We love it. Our office is based here and it's being
redeveloped all around the downtown area and making it nice and walkable. The
city has done a marvelous job promoting the development of the downtown area.
These homes are within walking distance of this beautiful park called Fountain
Park. And you're going to see pictures of Fountain Park and the house
throughout this interview.
Right.We'll poke it in.
That's right. So, what was the story Dennis? What? Oh, I'm
sorry. Let me back up. By the way, share, like, subscribe.
sorry. Let me back up. By the way, share, like, subscribe.
And all those good things. Check us out on Snap A Chat.
That's what I always say.
That's what I always say.
Dennis, how did you get started in this business in the
first place?
first place?
Well I have a trades back background. Started off
actually. Getting an associates degree in Mechanical HVC and going, going
through trade programs, apprenticeships for plumbing pipe fitting HVC. I've
worked for 10 years doing commercial industrial HVC service work and on this
side I would always build my own homes. And so retirement, just continue that
process of construction and building and it led into me starting my own
business as a general contractor.
actually. Getting an associates degree in Mechanical HVC and going, going
through trade programs, apprenticeships for plumbing pipe fitting HVC. I've
worked for 10 years doing commercial industrial HVC service work and on this
side I would always build my own homes. And so retirement, just continue that
process of construction and building and it led into me starting my own
business as a general contractor.
Wow! Knowing all that kind of makes your traits a little
nervous I'm sure. Cause now, you really know what to, he really know what to
check and how to stay on top of them. That's awesome.
nervous I'm sure. Cause now, you really know what to, he really know what to
check and how to stay on top of them. That's awesome.
By the way, just to add onto this, I know most, most young
people are getting pushed to go to four year colleges because you're not worth
a darn unless you've gone to a four year school.
people are getting pushed to go to four year colleges because you're not worth
a darn unless you've gone to a four year school.
And come out with that $200,000 debt.
I remember during the crash you couldn't even apply for a
job as a receptionist unless you had a four year degree. Right. The point that
I'm trying to make is if you have any business acumen at all and you go to any
kind of a trade school and learn a trade, then number one you can always make
money at that trade, but if you have business acumen as well, it won't be very
long before you own the company or your own company. So keep that in mind.
job as a receptionist unless you had a four year degree. Right. The point that
I'm trying to make is if you have any business acumen at all and you go to any
kind of a trade school and learn a trade, then number one you can always make
money at that trade, but if you have business acumen as well, it won't be very
long before you own the company or your own company. So keep that in mind.
Right, right. Hint, City View Builders. Right? Correct.
Awesome.
Awesome.
So when did you get your GC license?
In 2004.
Okay. Right when we were thinking everything was going to
go smoothly.
go smoothly.
And it did for a few years. Right?
Well that, you know, markets are secular. Typically, and Wendy
and I had been in the mortgage business for, I'm not going to say how many
years because then it really puts an age on us, but 20 to 30 markets are always
going to change. But it's typically interest rate based and you know, that last
crash had nothing to do with interest rates. It just ran out of money.
and I had been in the mortgage business for, I'm not going to say how many
years because then it really puts an age on us, but 20 to 30 markets are always
going to change. But it's typically interest rate based and you know, that last
crash had nothing to do with interest rates. It just ran out of money.
That's for sure. That's for sure. So, well what is it that
got you into constructing houses? What was your big why? What is it that you
were trying to accomplish?
got you into constructing houses? What was your big why? What is it that you
were trying to accomplish?
Well, I enjoyed building homes. Awesome. So as far as
that, that was fairly simple and straight forward. I enjoy the trades, I enjoy
construction. I had an opportunity starting around 2004 to start doing the
significant rehabs in additions and developments around downtown Charlotte. And
around the downtown, uptown area of Charlotte. At the time it was, it was not what
we know it to be today, right.
that, that was fairly simple and straight forward. I enjoy the trades, I enjoy
construction. I had an opportunity starting around 2004 to start doing the
significant rehabs in additions and developments around downtown Charlotte. And
around the downtown, uptown area of Charlotte. At the time it was, it was not what
we know it to be today, right.
As we started to purchase homes and renovate them and sell
them, it actually led to more individuals offering properties to us at the
time. And so we, our business grew from there. We were able to acquire rehab,
resale and develop. As you all mentioned, the market, you know, changed, but we
had a fairly strong market through the end of 2008 in the Charlotte region.
them, it actually led to more individuals offering properties to us at the
time. And so we, our business grew from there. We were able to acquire rehab,
resale and develop. As you all mentioned, the market, you know, changed, but we
had a fairly strong market through the end of 2008 in the Charlotte region.
Awesome. And so what did you do during that time period
when you know, like 2008 till about what, 10 or 11 what did you do? How did you
survive?
when you know, like 2008 till about what, 10 or 11 what did you do? How did you
survive?
It was very, very difficult. In 2009 actually I had the
opportunity and privilege to work as a Charlotte fireman.
opportunity and privilege to work as a Charlotte fireman.
Oh, awesome. Thank you.
And so I was able to do that. The schedule was such, where
you work 10, 24 hour shifts. So we maintained and rebuild our business.
Obviously workload had changed just because there was little to no
construction. Right. For nine years. Right.
you work 10, 24 hour shifts. So we maintained and rebuild our business.
Obviously workload had changed just because there was little to no
construction. Right. For nine years. Right.
A lot of people completely gone out of that industry and
that's why we have shortages of labor now, correct? Yes. You know, they just
said, Hey, what's really funny is as soon as the crash happened, I finally
started seeing trade schools advertising for construction of education. I'm
going a little late on that boat, you know.
that's why we have shortages of labor now, correct? Yes. You know, they just
said, Hey, what's really funny is as soon as the crash happened, I finally
started seeing trade schools advertising for construction of education. I'm
going a little late on that boat, you know.
That's for sure. So, so you do rehabs and new construction,
which do like better?
which do like better?
New construction is easier, but I enjoy rehabs, especially
old beautiful historic homes in that you can actually came back to life. So
they, they each have their own reward, I'll put it that way.
old beautiful historic homes in that you can actually came back to life. So
they, they each have their own reward, I'll put it that way.
Right now, when you're building a home, are you doing custom
homes or are you, spec homes? What's your, what's your main gig on that?
homes or are you, spec homes? What's your, what's your main gig on that?
What we do probably falls in the category of semi-custom.
It's not in the category of track homes. Well, but nor is it the high end
custom homes that, that's a different market itself. For our price point,
we've, we've developed homes anywhere from 200 and has sold as high as 600,000.
So, so we're, we're about at that price point.
It's not in the category of track homes. Well, but nor is it the high end
custom homes that, that's a different market itself. For our price point,
we've, we've developed homes anywhere from 200 and has sold as high as 600,000.
So, so we're, we're about at that price point.
And then you say semi-custom, that means you kind of build
it and they come as you're building it and, and pick little things out. I would
assume that's the hardest thing to do.
it and they come as you're building it and, and pick little things out. I would
assume that's the hardest thing to do.
Yes. Everyone thinks they know what they want until they
have to make that decision.
have to make that decision.
That's right. And it's door number one or two or three, Oh
no, no, what am I going to do? That's right. And then, and then two, you know,
they'll say, Hey, I want this wall this way. And then you know, they can back
out at any time. And then you've created something, some kind of niche for them
that's different. Correct. That and now, now you've got to go to sell that to
somebody else. Boy, is that tough? Correct. How do you handle that?
no, no, what am I going to do? That's right. And then, and then two, you know,
they'll say, Hey, I want this wall this way. And then you know, they can back
out at any time. And then you've created something, some kind of niche for them
that's different. Correct. That and now, now you've got to go to sell that to
somebody else. Boy, is that tough? Correct. How do you handle that?
Well, you do your best you can in reference to when a
client makes significant changes, then you have to have them put a deposit
down, help secure those investments. I mean standard selections are, are
different obviously, but, but they, they typically, we try to steer our clients
in a way where make decisions that still allow them to have some personal
touches while also balancing what everyone wants. And that's something that's
going to fit their budget.
client makes significant changes, then you have to have them put a deposit
down, help secure those investments. I mean standard selections are, are
different obviously, but, but they, they typically, we try to steer our clients
in a way where make decisions that still allow them to have some personal
touches while also balancing what everyone wants. And that's something that's
going to fit their budget.
Right. And you've brought budget and financing up a couple
of times. So, what are some of the ways that your financing the, the deals that
you're doing, how do you go about that? I, you know, you've used us for a deal
or two and we're thrilled. Thank you. But what is it that, what, what's your
preference? What are the things that you're doing to get things financed?
of times. So, what are some of the ways that your financing the, the deals that
you're doing, how do you go about that? I, you know, you've used us for a deal
or two and we're thrilled. Thank you. But what is it that, what, what's your
preference? What are the things that you're doing to get things financed?
So over the years I've had a chance to use a lot of
different financing. I've used just conventional bank financing where there's a
commercial loan from a lender that does a typical 12 month interest only
construction.
different financing. I've used just conventional bank financing where there's a
commercial loan from a lender that does a typical 12 month interest only
construction.
Are they easy?
I wouldn't say easy is the right term. They all come with
a level of application. Paperwork is a process to get them closed.
a level of application. Paperwork is a process to get them closed.
Lots of red tag.
It is, it is. And over the years I've seen all that change.
So I work pre, yeah, 2009 yeah, yeah, pre recession and after the recession. So
it's a different environment today which can add another layer of
complications.
So I work pre, yeah, 2009 yeah, yeah, pre recession and after the recession. So
it's a different environment today which can add another layer of
complications.
And what are some of the other ways that you do?
The other ways is partnerships with investors silently.
You tell me how that works.
Typically an investor will come in and partner with me and
they will fund a project that we have with either a certain percentage on the
money that they lend us or splitting the profits at the end. It depends on the
relationship that we do.
they will fund a project that we have with either a certain percentage on the
money that they lend us or splitting the profits at the end. It depends on the
relationship that we do.
Now are they having a say in what you build and how you
build that?
build that?
Typically they don't want to have really any part in it.
As long as it's profitable and meet certain timelines. They're usually happy.
Now with that also can come as a builder. Slash. Developer, you may lose more
of your, your profits. You know.
As long as it's profitable and meet certain timelines. They're usually happy.
Now with that also can come as a builder. Slash. Developer, you may lose more
of your, your profits. You know.
But that's just like paying interest. Right? You're just
paying it in a different way. Correct. That's awesome.
paying it in a different way. Correct. That's awesome.
So each has its advantages. Disadvantages. One thing in
particular I've enjoyed working with your company is that the process has been
relatively smooth and seamless on time.
particular I've enjoyed working with your company is that the process has been
relatively smooth and seamless on time.
Awesome. Time is important. So have you done any builds
for people that on their land and they, they've gotten the financing themselves
and you're just drag to this building?
for people that on their land and they, they've gotten the financing themselves
and you're just drag to this building?
I do. And that's why in a lot of ways working with your company
is so important to our company. A lot of homeowners today, they may easily
qualify for the purchase of a home. They may even have gone as far as, maybe
securing a lot, but a lot of buyers today are not in a position to secure a
construction loan. The bank standards have changed over the years. We're now,
regardless of how much equity is in it, they're looking for 10% down. So on a
third, $300,000 bill, even though they may have already purchased their land,
they may still have to come out of pocket the additional funds.
is so important to our company. A lot of homeowners today, they may easily
qualify for the purchase of a home. They may even have gone as far as, maybe
securing a lot, but a lot of buyers today are not in a position to secure a
construction loan. The bank standards have changed over the years. We're now,
regardless of how much equity is in it, they're looking for 10% down. So on a
third, $300,000 bill, even though they may have already purchased their land,
they may still have to come out of pocket the additional funds.
That's interesting. I know when we had our house built
back, you know, turn of the century, I did the same thing. I already owned the
lot and I signed a lot over to the builder. He got the construction loan and
then I ended up with a purchase loan is at the end and use the lot as the down
payments. I didn't have any cash out. So that leads me to my next question. You
always start off as really good friends in the beginning. Do you end these
friends, when the house is finished?
back, you know, turn of the century, I did the same thing. I already owned the
lot and I signed a lot over to the builder. He got the construction loan and
then I ended up with a purchase loan is at the end and use the lot as the down
payments. I didn't have any cash out. So that leads me to my next question. You
always start off as really good friends in the beginning. Do you end these
friends, when the house is finished?
Hopefully. Oh yeah. Yeah, it is. It's a very stressful
private process. And that's why for, for builders, builders are really nervous
about taking additional risks after any builder that went through 2008, 2009
sure. They're, they're nervous about taking that risk because a typical
construction loan is just that. It's just temporary financing six to 12 months
interest only, which means that the builder, if the project isn't sold, has to
find a way, a path to refinancing or attaching permanent financing to it. And
so because of that, you know, builders are nervous, they are somewhat hesitant
because of that, even though it's a very strong market,
private process. And that's why for, for builders, builders are really nervous
about taking additional risks after any builder that went through 2008, 2009
sure. They're, they're nervous about taking that risk because a typical
construction loan is just that. It's just temporary financing six to 12 months
interest only, which means that the builder, if the project isn't sold, has to
find a way, a path to refinancing or attaching permanent financing to it. And
so because of that, you know, builders are nervous, they are somewhat hesitant
because of that, even though it's a very strong market,
well, markets can change at any time. You say you go up to
600,000. I know there's, has been some flatness in the above 500 market in
Charlotte, but you know, 300 or under, they're lining up for them. That's
right. And that's liable to change it at some point. But the thing about
working with investors, partnerships, private money, those types of
relationships are going to work with you as the market cycles change in the
middle of a build, right, versus your more traditional bank financing because
they don't really have the bandwidth to do anything different other than just
take it back. Correct. Correct. So that's why I, in our own stuff we always
push towards, even if it's a private lender, the thing is private lenders going
to be less expensive, but they don't have infinitely deep pockets. So it's hard
to scale.
600,000. I know there's, has been some flatness in the above 500 market in
Charlotte, but you know, 300 or under, they're lining up for them. That's
right. And that's liable to change it at some point. But the thing about
working with investors, partnerships, private money, those types of
relationships are going to work with you as the market cycles change in the
middle of a build, right, versus your more traditional bank financing because
they don't really have the bandwidth to do anything different other than just
take it back. Correct. Correct. So that's why I, in our own stuff we always
push towards, even if it's a private lender, the thing is private lenders going
to be less expensive, but they don't have infinitely deep pockets. So it's hard
to scale.
That's right. If that's all you're using as well. That's
right.
right.
You know, before the, we started rolling the cameras, we
talked a little bit about the market and the Charleston style houses that
you're building in Rock Hill and how the buyers kind of surprised you. Can you
talk a little bit about that?
talked a little bit about the market and the Charleston style houses that
you're building in Rock Hill and how the buyers kind of surprised you. Can you
talk a little bit about that?
Yeah. The buyers that are lining up. We anticipated that
it would be a lot of millennials, young professionals, couples, maybe ones
considering having a family or just starting a family who are now tired of
paying maybe 1500 a month to rent an apartment who want to transition over to
ownership where they can do at the same, same relative calls. And while we do
have interests from that category, the interest that's been surprising is how
many are 50 and older and are really looking at our homes as some with
downsides.
it would be a lot of millennials, young professionals, couples, maybe ones
considering having a family or just starting a family who are now tired of
paying maybe 1500 a month to rent an apartment who want to transition over to
ownership where they can do at the same, same relative calls. And while we do
have interests from that category, the interest that's been surprising is how
many are 50 and older and are really looking at our homes as some with
downsides.
Yeah. Yeah. And their complaint about the master. So there's
plant masters down in some plans, but in other plans they're upstairs and...
plant masters down in some plans, but in other plans they're upstairs and...
Not everyone likes stairs.
That's right. I don't, I don't like stairs, but the fact
that you can put an elevator in for 10 to 15,000, you know, you think it's
going to cost so much, but that's a great option.
that you can put an elevator in for 10 to 15,000, you know, you think it's
going to cost so much, but that's a great option.
Well, I was going to mention, now that I've thought about
it, it's probably not as surprising as you would think about the downsizing
because let's face it, it's not cost-effective for most track builders to build
affordable homes. There's not a lot of margin. It just takes one little
mistake. And you said they're already nervous. Think about doing a whole
subdivision. There's a lot at risk when you're doing that and if the market
shifts and then you're kind of stuck and if you don't have any margin to work
with, you know it's even tougher. So I'm assuming that the 50 somethings are
having a hard time finding new builds that are going to be at that price point.
it, it's probably not as surprising as you would think about the downsizing
because let's face it, it's not cost-effective for most track builders to build
affordable homes. There's not a lot of margin. It just takes one little
mistake. And you said they're already nervous. Think about doing a whole
subdivision. There's a lot at risk when you're doing that and if the market
shifts and then you're kind of stuck and if you don't have any margin to work
with, you know it's even tougher. So I'm assuming that the 50 somethings are
having a hard time finding new builds that are going to be at that price point.
It's very difficult to, for it, in my opinion, any builder
track home or semi-custom to actually be profitable building anything less than
250 yeah, it's very difficult. Yeah.
track home or semi-custom to actually be profitable building anything less than
250 yeah, it's very difficult. Yeah.
So you have to be more of a, you have to have a fix and flip
investor mentality when you're going out searching for the lots that you're
going to build on. Correct. And have to get them at the right price in order to
help maximize your margins on those
investor mentality when you're going out searching for the lots that you're
going to build on. Correct. And have to get them at the right price in order to
help maximize your margins on those
And then location means everything.
A location, and just as important as that is time. Right.
So if I do find something that works and I need to secure financing with it, I
need to be able to approach a partner quickly and say, we have X, Y, Z time.
Let's see, we can move forward with it.
So if I do find something that works and I need to secure financing with it, I
need to be able to approach a partner quickly and say, we have X, Y, Z time.
Let's see, we can move forward with it.
Once again, you're not getting that with your large
financial institutions. They move at the speed of snail. It's difficult. Now
you get great rates with them and if you end up refinancing along the way, if
that's possible, because most of them don't like refinancing something in the
middle of a build in the first place. But yeah, most, most people go towards
the, the partnerships or the private money really based on speed and being able
to take care of takes it down a deal when you can because all of us across the
country suffering from an inventory shortage.
financial institutions. They move at the speed of snail. It's difficult. Now
you get great rates with them and if you end up refinancing along the way, if
that's possible, because most of them don't like refinancing something in the
middle of a build in the first place. But yeah, most, most people go towards
the, the partnerships or the private money really based on speed and being able
to take care of takes it down a deal when you can because all of us across the
country suffering from an inventory shortage.
Yeah. And for builders, we've been doing a loan to at least
let you do the take down to get a hold of that lot or hold of that house that
you're going to knock down and hold onto it until you get your permitting and
zoning and all of that stuff in order. And then we'll modify the loan to
include the build cost to, to, to try and save you some money from having to
throw it all out at the beginning. So we do what we can to, to work with you.
let you do the take down to get a hold of that lot or hold of that house that
you're going to knock down and hold onto it until you get your permitting and
zoning and all of that stuff in order. And then we'll modify the loan to
include the build cost to, to, to try and save you some money from having to
throw it all out at the beginning. So we do what we can to, to work with you.
So are you considering doing any multifamily stuff? Maybe
condos or...
condos or...
I like to, I've had as we were talking earlier about the
50 and older and they're interested in flats, right? So...
50 and older and they're interested in flats, right? So...
Yeah, no need for an elevator. Yeah, they're great. Cheers.
And so, and so the key to doing it is being able to again,
find land and that, that works for you to, that, that level of development.
find land and that, that works for you to, that, that level of development.
And I think, and, most people know this already but I'll
just reiterate it, it's a lot easier to find the affordable land in the bedroom
communities around the major cities. And it is to find them in the, in the
major cities. It's funny, when we had our home build, everybody was moving out
to the suburbs. Then of course, as soon as you get comfortable, everybody went
back to that.
just reiterate it, it's a lot easier to find the affordable land in the bedroom
communities around the major cities. And it is to find them in the, in the
major cities. It's funny, when we had our home build, everybody was moving out
to the suburbs. Then of course, as soon as you get comfortable, everybody went
back to that.
Thank you so much for joining us again. Really had an
awesome time. I knew Wendy dis as well. We do. So if you like what you heard
and you want to see more. What do we do? You can hit one of these. I feel like
the hippy dippy weather girl, because we've got a green screen going on so we
could have a cold front moving in from Virginia or... Right? Come on.That's
funny I don't care who you are. So you can pick any of these other shows. We
have some here. We have some here. We have some here. Just pick one. Test it
out, right?. Also subscribe like, and our website is easy. That'd be a w. w. w.
w. w. That's a lot of W's.
awesome time. I knew Wendy dis as well. We do. So if you like what you heard
and you want to see more. What do we do? You can hit one of these. I feel like
the hippy dippy weather girl, because we've got a green screen going on so we
could have a cold front moving in from Virginia or... Right? Come on.That's
funny I don't care who you are. So you can pick any of these other shows. We
have some here. We have some here. We have some here. Just pick one. Test it
out, right?. Also subscribe like, and our website is easy. That'd be a w. w. w.
w. w. That's a lot of W's.
CarolinaHardMoney.com. Tell all your friends.
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