Welcome and happy new year! Thank you for taking the time to read our monthly newsletter update from Hammerhead Capital. Hammerhead Capital is a real estate investing company that Wendell Butler created to invest in value-add real estate. Our goal with this newsletter is to provide insight into the existing projects we are actively doing, past deals we have completed and provide context for prospective and future investors. Our team currently owns, has under contract, and manages 40+ units, which consist of rentals, in progress flips and land throughout Massachusetts, North Carolina and South Carolina. We are constantly looking to add more high-quality properties to our portfolio. December ended up being a pretty busy month for us even with the holidays, which should create great momentum going into 2025!

  New Waxhaw, NC Whole-tail Closed!

We have purchased a new whole-tail project! We secured this property from a wholesaler just before the new year and made sure to close before 2025 arrived. The sellers needed to sell this property before January 1st, 2025 or they were going to get hit with a large fine due to personal family situations. We made sure to close this property very quickly and help them out of that situation. Because of the speed we moved and helped them out on, we got this property for $415k and it is worth as-is around $540k! All this property needs is a few touch ups, cleaning and then can be immediately listed. We are looking to spend around $5,000 on this and list it within a week or two. A whole-tail is a situation where you can get a property for a great discount that does not need much, if any, work at all. This is the definition of a wholetail and we are excited to get this listed and turn a profit very quickly!

  Charlotte, NC Fix/Flip Closed!

We have officially closed on our new Charlotte, NC flip! This deal was found by utilizing our real estate agent network and this particular agent had a seller that was in a time crunch. They needed money from selling their current house to be able to secure the loan and purchase their new property they were under contract for. This is where we stepped in to purchase the property very quickly to allow them to have less stress knowing they will sell their home in time for their move. We bought this property for $260k and the after repair appraisal came back at $390k! This is higher than the $370k we underwrote for, so that is very good news. The property needs some touch ups and also a new renovated kitchen where we are expecting to spend around $35k-$40k after getting some contractor quotes. We are expecting to be able to fix this up and get it listed within 45-60 days of closing to quickly turn around and sell it. This is a win-win for everyone involved that we can make some quick profit on, while helping these sellers get into their dream home stress free. Stay tuned for more updates on this project!

Rock Hill, SC Fix/Flip #2 Cosmetic Portion of Renovation Underway!

We have finished the interior demo as well as the initial rough-ins for electrical/plumbing. Our team is now moving full force into the cosmetic renovation of this property. Wait until you see the transformation coming this month! This project has been delayed a bit, which happens, but it should take until right before February to be finished then we will look to list it shortly thereafter. When listing properties, the winter/holiday time is one of the slowest times to try to sell a property, so sometimes it is better to wait a few weeks to list than during the holidays/new year anyway. That is okay because then we can make sure all the final punch list items can be completed, we also conservatively underwrote for a time delay for this. Stay tuned for before and after photos! 💯

We’re excited to announce that we’ve accepted an offer of $2.7 million for this property, with the closing scheduled around the end of January 2025. This sale represents an impressive 26%+ return for our investors after just one year of ownership. To maximize these gains, we plan to execute a 1031 exchange, reinvesting the proceeds into a new multifamily asset.

Salisbury, NC Novation Sold!

Our novation agreement rehab is complete and sold! Within 2 days we had 3 offers and one was $10k over asking which we accepted for $225k! We put around $35k of our own money into this deal and walked away with around a $40k+ profit plus our money back within just 3 months. That is around a 550% return annualized. What a win-win for everyone involved!

Worcester, MA Duplex Land Subdivision Sold!

This duplex was one of our first deals that was BRRRR'd. Currently the property is stabilized and providing exceptional returns. We worked with the Worcester, MA zoning department to get an approval to subdivide some land on the property that will allow us to either build another single family, duplex or sell off. We put the land up for sale and have accepted an offer of $130k! This was $10k higher than we expected which is fantastic. The cherry on top is that the total profit from this land sale will be 100% tax free. This is due to the land being initially part of the duplex, which was Wendell’s primary residence a little over a year within the past 5 years. If you live at a property for more than a year, you can get tax free long term capital gain income up to a certain amount. Usually it is up to $250k if you lived there 2 years out of the past 5 years and $125k if you lived there for 1 year out of the past 5 years (please confirm with your accountant depending on your situation as I am not an accountant). After closing costs, we walked away with around a $123k profit, just below the $125k cutoff, meaning it is all tax free profit! This initial house hack duplex deal has become a home run of a deal and we are excited to immediately put these funds into the next project!

Rock Hill, SC Fix/Flip #1 SOLD!

Our first Rock Hill, SC fix/flip has officially closed! This was a great base hit fix/flip where we made around a $15k profit on $40k spent within 3 months. That is about a 170% return on our money annualized. It was a little less profit than we would like, but with the market turning a little soft recently from the winter season and the election we are still thrilled to make a new homeowner happy and move onto new deals.

8-Unit in Putnam, CT

One of our first large multifamily investment projects came to a full cycle this year. We bought this property around 2 years ago for $470k, put about $130k into it and took it from only producing $34k gross annually to around $130k gross annually. We then sold it for $1.0375M with a total cost basis of around $600k. What a deal this was! We learned so much from this deal and it put us on the track we are on today. From dealing with the tenants, evictions, setting up our own property management, leasing out units, hiring a third party property manager, dealing with town zoning/regulations and facilitating all the renovations, it really was like going to real estate school. Although it was hard to sell, since it was sort of our baby and we do love long term investments at heart, the gains/profit that we received from the sale has allowed us to hit our stride full force. We will be looking to put out a case study video on this project to help educate anyone interested in the power of real estate, stay tuned!

As of December 2024, Charlotte's fix-and-flip market remains strong, with neighborhoods like Wesley Heights and Optimist Park offering significant opportunities due to ongoing revitalization (iBuyer). Heading into 2025, home prices in Charlotte are projected to rise by 3-4% annually, maintaining the city’s appeal for investors (The Luxury Playbook). Additionally, the National Association of Realtors forecasts a rebound in home sales nationwide, with sales expected to grow 7-12% and prices increasing around 2% (Barron’s). Factors such as stabilizing mortgage rates around 6%, increased inventory, and higher income growth for young adults are set to further enhance the market’s recovery.

In December 2024, mortgage rates averaged around 6.73% for a 30-year fixed loan, slightly above the fourth-quarter average of 6.68% (NerdWallet). Heading into 2025, rates are expected to remain stable, with Fannie Mae forecasting they will stay above 6% throughout the year (NerdWallet). The Mortgage Bankers Association predicts rates will hover in the mid-6% range, attributing this to persistent inflation risks (CRE Daily). While significant decreases in rates are unlikely, a gradual stabilization is expected, providing a more predictable environment for buyers and sellers in 2025.

What is up, all you real estate loving individuals! This is ‘The Real Estate Take’ Podcast. This is your go to podcast for TONS of information regarding the current real estate market where we get various real estate professionals current TAKE on different areas of real estate. We have released episode #17 with Jeremy Beland, who is a real estate investor in the New England area. More episodes are being released soon, so stay tuned!