Great location; low on CoC - thoughts?

[Oscar Zhang]

Would you consider investing in a growing area with a low CoC % - say 5% or lower?

I have researched potential investment areas and found a market in North Carolina that meets my criteria. For the past month and a half or so, I have been analyzing deals and connecting with realtors and lenders. The consensus among them is that the area is growing, but the cash flows are minimal.

Although I continue to analyze properties in the area, all of them continue to have a CoC return that falls well below 5%. I am running numbers based on the worst-case scenario. My investment strategy is focused on long-term equity through MTR/LTR, which will hopefully result in cash flow over time. My fiancé and I are fortunate enough to have stable jobs that can support low CoC returns. Additionally - this would be our very first investment property that happens to be out-of-state as well.

Thanks in advance to all of you for taking the time to read and respond to the post!

[Bruce Woodruff]

As @Chris Seveney said, this game has many facets....and appreciation is one of the most powerful. So yes, I would consider a lower CoC if the expected appreciation was pretty certain to be quite large.