New Investor in Northern Virginia. Buy & hold. Qualified, help?

Question

Hi everyone!

We own a single family house in Northern Virginia. We rent out our basement (legally) and after saving up cash, we've opened an LLC, gotten prequalified (we can put up to 20 or 25% down on a house up to $500,000.  We'd like to invest in the Northern Virginia area. Probably start small. I'm just having a very hard time finding a property where we'd generate any overhead. Is investing in NOVA buy and hold a bad idea? I don't want to just break even :( Any advice appreciated!

Russell Brazil · Answer

If you want greater yield (more cash flow), then you need to take on more risk.  Northern Virginia (along with DC and Montgomery and northern PG County) are all relatively low risk, thus low yield properties.  Baltimore for instance has some of the highest yields in the country in some neighborhoods, but that comes with much higher risk as well.

Kevin Hunter · Answer

@Jessica Kelly, welcome to BP.  I own several properties in NOVA.  The opportunities for solid, cash flowing deals are definitely limited, especially now that mortgage rates have steadily increased.  There are benefits to the NOVA area though, that help to offset the lower returns.  Steady tenant base: with all the military and government jobs in the area, the tenant base is consistent and reliable.  Exceptions to every rule of course, but true for the most part.  I have found little to no turnover.  In fact, in three properties, over 8 years, I have only had 1 month of vacancy, total!!

Listen to @Russell Brazil podcast on BP.  He discusses his preference for A class properties due to his long-term goals.  That preference resonates with me as well and I feel the same.  That is why I like the NOVA area.

Michael P. · Answer

Lol used to live in Arlington, my rentals are along Columbia Pike

Aaron Hunt · Answer

NoVA is off in its own little world. Hardly a resemblance of the rest of the state.

We live in Maryland, but the majority of our investments are located in NoVA due to tenant laws. They were bought as short sales during the crash. Problem with NoVA is they overbuilt and flooded the market with housing. Otherwise that Pentagon City/Arlington area would have gone real nuts.

In the 10 yrs since we bought ours, they’ve only appreciated about 25%. Class A, and Class B rentals.

Crazy to think those were short sales and still didn’t fall much at all. Compared to our Vegas properties which have gone apes***t during the same (or less) interval.

And yes, sometimes housing prices make no sense there. My friend just bought a 7 figure SFR as his primary...without a garage. Nearly lost my mind when I saw that.

Tchaka Owen · Answer

@Jessica Kelly - Did you mean to write "overhead"? Perhaps you meant positive cashflow? NoVA is solid long term - solid! However you will not make an immediate killing (with few exceptions) for the very reason @Russell Brazil states. I'm from North Arlington and cannot afford to buy in the neighborhood my dad was raised in. Yet it is unlikely prices will drop...other than little market fluctuations. The question for you is whether you're ok with that or if you need faster returns.

@Michael P. - "we"? Hahaha! Marylander trying to take credit for Virginia goods! >:-)

Kyle Deutschmann · Answer

@Jessica Kelly hey Jessica, Id agree with @Russell Brazil, Arlington is a "safer" place to invest with all the population and job growth, but Id imagine its pretty hard to find a good deal with the property values there. I grew up in MD and have a bunch of connections in NoVA as well as areas such as Baltimore. Id be happy to chat sometime about this and put you in contact with some of my connections if it would help. Dm me if interested in chatting more. Best of luck, Kyle

Susan Naftulin · Answer

Awesome area for occupancy, hard area for finding a distressed property. Think creatively about a property you might be able to split into two units!

Ozzy Sirimsi · Answer

I would not want to break even. If that is only option, look elsewhere.

Cassidy Burns · Answer

Hey @Jessica Kelly, just be patient.  Getting started out it is very hard to stay patient and wait for a good deal.  You will eventually find one !

Good luck!

Michael P. · Answer

bad idea? we just landed amazon HQ2

New Investor in Northern Virginia. Buy & hold. Qualified, help?

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