Smithfield, NC - Anyone investing in this area?

Question

Hey BP'ers

I was just curious if anyone is investing this area?  Would like to network a bit with any investors, property manager, wholesalers, etc...

Thanks,

Shaun

Chris Martin · Answer

As you know I am using the The North Carolina Office of State Budget and Management (OSBM) and the N.C. Department of Commerce numbers to see if I can make heads or tails out of where I should be.

It can be easy to get lost in the data. I'm still trying to quantify certain aspects of the ranking system (which is spelled out on the earlier link I provided) to see how (or if) I can figure out what demographic shifts, if any, are occurring or may occur. There are so many different angles. The tier system takes into account:

Average unemployment rateMedian household incomePercentage growth in populationAdjusted property tax base per capita

Poverty level, age of housing stock, proximity to adjacent county employment, employment sector concentration, at risk industries, ... these data points are not part of the tier ranking algorithm.

An FYI, Guilford (pop. est. 517,124) is the largest tier 2 county, Haywood (pop. est. 60,631) is one of the smallest tier 3. State population data inputs only goes back 5 years as far as their rankings, and Guilford at 5.9 (over 5 years) is above the state average 5.5, Haywood at 2.7 is below.

The big question is... So what? Why bother? Just keep buying real estate and pay high prices because everything goes higher.

Well. 2007 happened. 2001-2 happened. I'm not promoting doom and gloom, but I am pointing out that for me 1) alternatives to SFR investments exist, 2) opportunity costs analysis tells me that other sectors (small commercial) may result in greater long term value/returns, 3) economic assistance packages for development in tier 1 counties exist, 4) substantial demographic shifts in tier 1 counties may be in play today.

Just looking through the data, I see things I wouldn't expect. Why do Camden, Currituck, Dare counties have the lowest per capita poverty rates in the state? All are 'growing' in population. None are tier 3. Why would anyone invest in Scotland county? Highest in state for poverty per capita (32.3%), negative net migration, second highest unemployment rate (8.6%).

I'm still formulating plans. I'm still meeting with county planning departments. I'm not against SFR investing (though prefer non-project MFR investments from what I've seen) but specialty commercial projects may be a better play.

Curt Warner · Answer

I continually get leads in smaller markets and rural areas. Less competition in these markets... some good properties and some marginal. If you're interested in picking up properties in smaller markets let me know. I recently had several in Camden county NC. I can also target any county in any state. PM me for more info.

Chris Martin · Answer

@Patrick Madigan

Patrick Madigan · Answer

@Chris Martin Forgot to mention, those growth numbers were comparing populations from 2000 and 2013.

Patrick Madigan · Answer

@Chris Martin, I've seen you post about County Tiers many times. I thank you for brining this tool to my attention. Something that interests me is the change between tiers, especially as seen in me and my wife's home counties. I'm from Haywood Co,. which I'm surprised to see jump into Tier 3 this year, and perhaps more surprised to see that my wife's Guilford Co. friends and family are now living in a Tier 2 county. Any thoughts on these moves? A quick Google search shows Haywood Co. has grown in population by 9.3%, with 19.9% for Guilford. Must be other factors weighing more heavily into the moves.

Apoorva K. · Answer

Very true. As remote investor with a few properties in different markets, I am now looking to invest in Raleigh area. Still researching, but so far I see that it's a tough place to find deals. Prices are increasing fast. And rents aren't that high. Also that there's so much new development, it's hard to visualize changing situation from far.

As a buy and hold guy, Garner seems a little promising. So does Fuquay Varina, so far.

Chris Martin · Answer

Regarding "Where are you currently investing?" Not tier 3 counties. Not today.

I am historically, in real estate, a contrarian investor. (In the stock market, I'm a momentum investor (CAN SLIM type).) So the last few years have been tough as far as 'growth' for my types in top tier metro locations. So what to do? Sidelines. Switch asset types. Move. Retire. All the above.

Changing my investment style (e.g. turning to a flipper) is not an option for me. I'm an old dog.

So for the moment, I'm looking at tier 2 and tier 1 counties... keeping an open mind.

Jim Brewer · Answer

Home prices have gone up, and it isn't slowing the sales down much in the $130k-$150 range in Johnston County. It's a tough time to find great deals. If you can find them and flip them quick there is certainly money to be made. NC FHA is offering a $15k down payment assistance loan right now, forgivable after 5 years, to first time home buyers in Johnston County that are buying existing homes. This is basically free money if you are going to live there for 5 years, and is helping the sales of these starter homes I am sure.

Chris Martin · Answer

Curious. Are you compelled to explore central Johnston county for any particular reason?

Smithfield, NC - Anyone investing in this area?

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