First Post - Got a taste but struggling to find more

[Luke Davis]

Hello everyone!

I wanted to post here and get thoughts on some more specific ways to find good deals. My wife and I recently moved to Raleigh/Durham, NC from Tampa, FL and we still own and rent out our home in FL. Now that we've got a taste of what real estate can do for long term wealth and financial freedom, we're hungry for more medium/long term rentals!

Over the past few months we've educated ourselves on BP, watching the podcasts, reading forums, and educating ourselves via other content from others. We've had heavy doses on topics such as finding good markets, lending, analyzing deals, managing tenants, legalities, etc. We also have the added experience of each purchasing a home ourselves and self-managing our other home and tenant in FL.

Over the past few weeks, we've been going through many medium to large population areas in FL and NC that we know are hot spots for people to move to and rent. However, time and time again, as we run the numbers we are struggling to find any properties that are even close to providing a decent CoC return (5% or more). We have run at least a hundred at this stage and majority are negative CoC after analyzing. It seems that, between the low inventory, high interest rates, and still somewhat inflated home prices, you can't get a good deal unless you're buying cash or find a true needle in the haystack. Not to mention the unknowns that lie ahead in 2024 for housing prices that could drop, interest rates maintain at current level (6-7%), rental prices coming down in 2024, etc.

We are both well versed in business and I personally work as a Project Manager in the Construction industry so I have a good look behind the curtain on construction prices, activity, etc.

To those experienced here - what are we missing? Are we focusing too much on populated areas and should look more towards smaller, rural areas? Should we focus more on distressed properties that are not move in ready?

We'd really appreciate any knowledge or feedback anyone here is able to give - we have a goal this year to purchase 2 more rentals properties and we're excited to keep up the momentum.

Thank you!

[Alecia Loveless]

@Luke Davis While I can’t speak for your target markets as I live in northern new Hampshire I might suggest looking for more rural areas.

I have 7 properties in towns with populations less than 8000 people. You do need to look for desirable areas but the markets can be strong. If I could find more properties in my markets I would buy many more.

My towns have restaurants, movie theaters, live music venues, concerts on the green, great schools, and more. The largest has an Applebees, a Walmart, a Lowe’s, a Home Depot, and a 99 restaurant which is new englands version of a Chili’s. They’re located minutes from golf, skiing, hiking, and fishing, and boating as well as tax free shopping and world class dining.

Obviously not all of this is a bonus for rentals but sometimes more rural markets can offer better deals. You can enter the New Hampshire market for $375,000 for a duplex or triplex were one to be available.

Unfortunately nothing has been listed since my last purchase 9/1/2023. I see affordable things listed in the Manchester/Concord NH area all the time.