Buy and Hol investment in Raleigh

[Axel De Stabenrath]

Hello,

A friend and I are planning to buy a property in Raleigh Q1 2018 and from there build a Buy & Hold portfolio if things go well.

For our first purchase we are looking at buying a 3/4 bedrooms condo close to NCSU to rent to college students. Since we are not local (live in SoCal), we would hire a property manager and we are thinking of putting the property under a LLC structure and we would split 50/50 the purchase (my friend would pay cash and I am taking a loan). We are targeting the $100k to $150K price range.

This is my first purchase and I am still educating myself and could and will probably find the answer as I dig deeper into BP website. Anyhow, I would be interested in having feedback from experienced investors:

- Is the LLC structure the best way to go?

- Is the idea of renting to university students good for this kind of buy and hold investment?

- Are there any BP members who have invested in Raleigh and would recommend a real estate agent and a property manager?

- Any advice on the type of loan and maybe a recommendation for a loan broker?

There are probably many things that I am not thinking of right now and any advice is welcome.

Regards,

Axel

[Tiffany Alexy]

I am extremely familiar with this type of investment. I own multiple units near NCSU, all student housing, and also have worked with clients on buying and renting out their units as well.

Definitely recommend an LLC if you can. Sometimes financing in a brand new LLC can be tricky so I'd talk to a loan officer first. Depending on which community you choose, they may be non-warrantable which will definitely limit your loan options (non warrantable means the loans can't be sold to Freddie or Fannie). This is the #1 thing that trips up my clients trying to buy for student rentals.

The NCSU area is great overall, a huge rental base for students and vacancy has never been an issue. Of course there are certain risks with renting to college students that are different from renting the typical SFH.

Let me know if there is anything else I can help you with.