First Property Investment

[Marcus Tim]

I recently purchased a SFH in Charlotte NC with a zipcode of 28269. The asking price was 299K but I ended up getting the property for 276K (What it was appraised for). I will be doing some renovations in order for this property to be move in ready (repainting and replacing all flooring). All major repairs, such as the HVAC and roof were handled before the seller put the property on the market. My plan for the property is to house hack for 2 years max and turn it into a MTR. The property is 15 minutes away from uptown charlotte and 20 minutes away from the university. The neighborhood is nice, quiet, lawns taken care of, no junk cars sitting in driveways or the street, with a small HOA payment monthly. My main concern is the cost of turning the property into a MTR especially with this being my first property. I can always turn this into a LTR but with the current rates I would be losing money every month. For the MTR option I calculated a rent price of $2,900 (on the lower side) and got a ROI of 12% but a negative CoC return. FYI, I am banking on the equity to come in by year 2 in order for me to refinance and jump start my next investment property.

I am open to new ideas and would love insight on how this sounds or some other things I may not be thinking about.

[Stephanie Walker]

It's great that you already purchased your first investment and have plans in mind for the future. 28269 is a good area code for MTR right now. I manage over 50 MTRs in the Charlotte market. However, things can change pretty drastically in the next two years. I'd bet that you'll be able to refinance within those two years and your returns will look better. At that point, you could decide which strategy makes the most sense. But until then, its just a guessing game! I imagine you already did this - but if not - review your CC&Rs to confirm that MTR/STR is allowable in your neighborhood. Again, this could change in the next two years but just something to be mindful of!