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Updated over 5 years ago, 05/10/2019

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12
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John Patterson
2
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12
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Thoughts on Investing in Charlotte NC/ Greater Charlotte Area

John Patterson
Posted

Hello,

I just moved to the Greater Charlotte NC/SC area from NY and have been exploring the RE for sale in the area based on interesting Zillow listings that come up. I was wondering what people with knowledge of the market think about this area. 

In my mind Charlotte still has room to grow, but it is certainly near its 'peak' in my mind, However I still believe there are good RE opportunities for rentals out there. The neighborhoods vary greatly within 30 minutes of central Charlotte. I'm interested in buy and hold rental properties in the C to B- range.

I'd love to know your thoughts and insights on the market and area.

Thanks!

User Stats

161
Posts
178
Votes
Aidan Mulligan
  • Rental Property Investor
  • Charlotte, NC
178
Votes |
161
Posts
Aidan Mulligan
  • Rental Property Investor
  • Charlotte, NC
Replied

Take a look at Gastonia and Fayetteville. Two emerging markets.

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133
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104
Votes
Shaun J.
  • Long Island NY
104
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133
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Shaun J.
  • Long Island NY
Replied

Overdone these days. Fayetteville was run down 10 years ago when I looked. Perhaps it's re-emerging? Hit me up sometime 

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User Stats

679
Posts
463
Votes
Dan Handford
Pro Member
  • Multifamily Syndicator/Investor
  • Columbia, SC
463
Votes |
679
Posts
Dan Handford
Pro Member
  • Multifamily Syndicator/Investor
  • Columbia, SC
Replied

@John Patterson I can certainly connect you with some people in the Charlotte North Carolina market that could assist you further.

What size assets are you looking at acquiring?

User Stats

102
Posts
66
Votes
Richard Weinberg
  • Rental Property Investor
  • Winston Salem, NC
66
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102
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Richard Weinberg
  • Rental Property Investor
  • Winston Salem, NC
Replied

@John Patterson

Be selective and work your way up and down 85 and 77. Concord and that little airport and the Amazon distribution facility have got to have created some SFR buy and hold opportunities. Buy right or don't buy. Good luck.!

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2
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John Patterson
2
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12
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John Patterson
Replied

I appreciate all the responses. Thank you!

Gastonia seems to be emerging for sure as a cheaper area to commute to Charlotte. I'm still getting my bearings but the properties seem to be a bit expensive in the area from what they are, but I certainly think theres meat on the bone there. As long as Charlotte keeps growing that area will likely remain interesting. I'll look into Fayetteville as well!


Originally posted by @Dan Handford:

 I'm looking for cheaper SF Homes (Sub 65,000?) and MF units that would likely cashflow (seen a few duplexes on CL, driving around, one of which was unlisted in a seemingly great spot in Charlotte for commute time and being forced to be sold via court order ;) )-- Still need to call the number associated with that one (didn't have a price).

I sort of get that feeling as well for a lot of Greater charlotte areas -- but man if you drive around in I77 or other main highways the roads feel busier than Metro NYC ones at times. Will PM when I get better bearings or additional opinion. Thanks!

~ ~ ~Looking for more general thoughts or experience. Thanks again all!

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123
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89
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Brent Zande
  • Contractor
  • Cornelius, NC
89
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123
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Brent Zande
  • Contractor
  • Cornelius, NC
Replied

@John Patterson I think Charlotte and the surrounding MSA is very viable but like anything you have to be diligent with the numbers.  Statesville, Monroe, Gastonia and Kannapolis/Concord are fine sub markets for the product you seek and you will get a b-or c type product and client with no tremendous long term upside.  There are areas closer in like off Beatties Ford and Independence that I think give you a shot at upside appreciation.  Know that you may find a better time to buy in a year or two but if you look hard enough there are deals to be made!  Oh yea avoid Salisbury.  Can’t explain it well but nothing good seems to happen in RE there.  My 2 pennies.

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied
Originally posted by @Brent Zande:

@John Patterson I think Charlotte and the surrounding MSA is very viable but like anything you have to be diligent with the numbers.  Statesville, Monroe, Gastonia and Kannapolis/Concord are fine sub markets for the product you seek and you will get a b-or c type product and client with no tremendous long term upside.  There are areas closer in like off Beatties Ford and Independence that I think give you a shot at upside appreciation.  Know that you may find a better time to buy in a year or two but if you look hard enough there are deals to be made!  Oh yea avoid Salisbury.  Can’t explain it well but nothing good seems to happen in RE there.  My 2 pennies.

 So you kind of thing the fringe of Charlotte areas are stuck where they are in terms of appreciation? What would you do if you found a C- or more likely D very small triplex or duplex in pretty much in the heart of Charlotte? I think the rate for the triplex was ~ $150k with work needed (wasn't the most ideal setup/condition , and the duplex was ~ $120k with the same conditions). 

Thanks for your advice on Salisbury, I'm going to keep checking Zillow daily to feel out the retail market. Do better deals pop up on MLS a lot? I also noticed there were seemingly 'deals' to be had on craigslist.

Also like anyone hindsight 20/20 -- Wish I had purchased everything in sight ~ 2012 lol -- I just hope I dont buy and recieve another 2008 tier crash.

User Stats

123
Posts
89
Votes
Brent Zande
  • Contractor
  • Cornelius, NC
89
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123
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Brent Zande
  • Contractor
  • Cornelius, NC
Replied

John yes right now I think the fringe areas are at a peak for appreciation and yes we would all look like geniuses if we bought our portfolios in 2011-2012.  That said I think there are flip opportunities in the outskirts and if you go a little bigger, there are some 10 unit or 20 unit deals in the outskirts that have upside longterm because of their current condition.  Your triplex sounds like it is priced for tear down more than salvation, if it is in the heart of CLT  then its highest value may be a new build, just depends where it is.  We have not held anything as a long term rental in the last 2 years, one AirBNB being the exception, the yields just have not been good enough to sit on them when the market is so hot to turn them loose.  The institutional investors have switched to buying land and building new for their portfolios which tells me that they see a drop coming and are not placing capital until it does but they need to keep staff and deploy some money so their investors do not get mad that they are holding too much cash.  There will be a better time to buy long term than now in CLT but it is a good place to flip if you can find the deals.

User Stats

12
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2
Votes
John Patterson
2
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12
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John Patterson
Replied
Originally posted by @Brent Zande:

John yes right now I think the fringe areas are at a peak for appreciation and yes we would all look like geniuses if we bought our portfolios in 2011-2012.  That said I think there are flip opportunities in the outskirts and if you go a little bigger, there are some 10 unit or 20 unit deals in the outskirts that have upside longterm because of their current condition.  Your triplex sounds like it is priced for tear down more than salvation, if it is in the heart of CLT  then its highest value may be a new build, just depends where it is.  We have not held anything as a long term rental in the last 2 years, one AirBNB being the exception, the yields just have not been good enough to sit on them when the market is so hot to turn them loose.  The institutional investors have switched to buying land and building new for their portfolios which tells me that they see a drop coming and are not placing capital until it does but they need to keep staff and deploy some money so their investors do not get mad that they are holding too much cash.  There will be a better time to buy long term than now in CLT but it is a good place to flip if you can find the deals.

Yeah, there certainly seems to be tons of new developments and MF complexes all over. What do you think will cause the next housing price drop in Charlotte area? I really just want to acquire my first rental but i'm scared to buy at the 'peak' -- but I suppose if the deal is good enough it wont matter long term.

BUMP! :)

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied

BUMP

I'm still on the hunt for a sub $85,000 SFH that will rent/cash flow in the greater Charlotte area!

User Stats

27
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14
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Eileen Mazza
  • Lender
  • Raleigh, NC
14
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27
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Eileen Mazza
  • Lender
  • Raleigh, NC
Replied

Have you also considered right over the line in South Carolina? Lower taxes, I believe and some good deals to be had. (so I've heard) I'm in the Raleigh area. check out your local REIA in Charlotte-there are 2. You should be able to connect with some wholesalers in that area which can help you.

User Stats

16
Posts
4
Votes
Matt Henry
  • Rental Property Investor
  • Charlotte, NC
4
Votes |
16
Posts
Matt Henry
  • Rental Property Investor
  • Charlotte, NC
Replied
Originally posted by @John Patterson:
Originally posted by @Brent Zande:

John yes right now I think the fringe areas are at a peak for appreciation and yes we would all look like geniuses if we bought our portfolios in 2011-2012.  That said I think there are flip opportunities in the outskirts and if you go a little bigger, there are some 10 unit or 20 unit deals in the outskirts that have upside longterm because of their current condition.  Your triplex sounds like it is priced for tear down more than salvation, if it is in the heart of CLT  then its highest value may be a new build, just depends where it is.  We have not held anything as a long term rental in the last 2 years, one AirBNB being the exception, the yields just have not been good enough to sit on them when the market is so hot to turn them loose.  The institutional investors have switched to buying land and building new for their portfolios which tells me that they see a drop coming and are not placing capital until it does but they need to keep staff and deploy some money so their investors do not get mad that they are holding too much cash.  There will be a better time to buy long term than now in CLT but it is a good place to flip if you can find the deals.

Yeah, there certainly seems to be tons of new developments and MF complexes all over. What do you think will cause the next housing price drop in Charlotte area? I really just want to acquire my first rental but i'm scared to buy at the 'peak' -- but I suppose if the deal is good enough it wont matter long term.

BUMP! :)

 Been thinking the same thing about all the new class A product coming online.

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5,682
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3,424
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Chris Martin
  • Investor
  • Willow Spring, NC
3,424
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5,682
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Chris Martin
  • Investor
  • Willow Spring, NC
Replied

Apartment absorption rates in Charlotte, just like Raleigh, are not out of line: Marcus & Millichap Multifamily Market Report: Charlotte

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied
Originally posted by @Eileen Mazza:

Have you also considered right over the line in South Carolina? Lower taxes, I believe and some good deals to be had. (so I've heard) I'm in the Raleigh area. check out your local REIA in Charlotte-there are 2. You should be able to connect with some wholesalers in that area which can help you.

I'm certainly not opposed to buying on the SC side, really just using Charlotte as the location to invest around as its where I have some family outside of NY and seems to be growing (and cheap enough to afford a few SFH).

Great advice with the REIA -- I wasn't even familiar with them prior to you mentioning that. Thank you

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied
Originally posted by @Chris Martin:

Apartment absorption rates in Charlotte, just like Raleigh, are not out of line: Marcus & Millichap Multifamily Market Report: Charlotte

Would you mind giving me your take on that report?

 Interesting -- so even at these high price levels demand seems to be increasing for rentals and apartments (even older units). Would you mind explaining the $430 affordability gap to me?

I'm going to post a zillow link I apologize if its frowned upon, please delete if so (of the shoddy triplex I mentioned earlier). I did a drive-by last week and it seemed like it had 1-2 tenants and the third vacant, but the shades were pretty jambled and the street was pretty class D looking tenant wise). If anyone has the time -- give it a click and let me know what you think about the property. Thanks!

https://www.zillow.com/homes/for_sale/Charlotte-NC/house,apartment_duplex_type/6179378_zpid/24043_rid/22222-197222_price/86-767_mp/6m_days/triplex_att/pricea_sort/35.533902,-80.351944,34.876355,-81.310502_rect/9_zm/

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied

Bump - Found a retail priced house at a reasonable price that would likely cash flow -- not sure how I feel about it (Costs about $60k, will cash flow  $100/month). Not sure if I'm ready to pull the trigger.

User Stats

12
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2
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John Patterson
2
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12
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John Patterson
Replied
Originally posted by @John Patterson:

Bump - Found a retail priced house at a reasonable price that would likely cash flow -- not sure how I feel about it (Costs about $60k, will cash flow  $100/month). Not sure if I'm ready to pull the trigger.

Bump

User Stats

491
Posts
253
Votes
Chris T.
Pro Member
  • Rental Property Investor
  • Charlotte, NC
253
Votes |
491
Posts
Chris T.
Pro Member
  • Rental Property Investor
  • Charlotte, NC
Replied

@John Patterson - If you provide a little more detail on the potential deal you found, we can provide better feedback.  

On the surface a $100/month cashflowing property might not be bad, but without knowing your assumptions, potential rehab required, etc. others can't really offer any insight.  

For instance, Mecklenburg county just went through the property revaluation process.  The tax rate has not been announced yet, but depending on what part of the city the property is in, the property tax might be expected to go up quite a bit.  If your current numbers show it cash flowing $100 now, it might be much lower once the new tax rates are announced.  On the flip side, if the area didn't show as much tax value appreciation, that $100 could increase.

  • Chris T.
  • User Stats

    7
    Posts
    3
    Votes
    Kenny Ramsey
    • Rental Property Investor
    • Charlotte, NC
    3
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    7
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    Kenny Ramsey
    • Rental Property Investor
    • Charlotte, NC
    Replied

    Property values in SC are very close to Charlotte market, which is weird but you get less for rent. 

    Venturing out the numbers seem to get worse not better. 

    I’m seeing more success in buying single family 3 bed 2 bth homes under 150k and cash flowing off rent. 20 minute radius of Charlotte you can rent it for $1100-2200 mth. 

    User Stats

    71
    Posts
    33
    Votes
    Jared Wonders
    • Charlotte, NC
    33
    Votes |
    71
    Posts
    Jared Wonders
    • Charlotte, NC
    Replied

    @Eileen Mazza property taxes in SC are cheaper for owner occupants but NOT non-owner occupants in particular counties in and around Charlotte. Important to distinguish the difference. For example a house hack would be advantageous tax wise as you’d be living in the property, however, millage rates for SC are almost triple for non-owner occupants.

    @John Patterson Good luck investing in the area! I’d highly recommend networking and meeting fellow investors in the area. Gastonia may be a good idea now and I’m sure many people are successful there but after working in and around the area for a few years I personally would not touch it. If you are looking for a property in SC in particular I’d highly encourage you to do some research on the tax assessors website for York county (if investing in this county) to know how to calculate the taxes prior to making offers and obtaining lending if going this route.

    Jared Wonders

    Account Closed
    0
    Votes |
    1
    Posts
    Account Closed
    Replied

    Gastonia, NC and Rock Hill, SC which are both in commuting distance to charlotte are good markets to be in with great demographics. I would stay far away from Fayetteville if you're playing the long game

    User Stats

    12
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    2
    Votes
    John Patterson
    2
    Votes |
    12
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    John Patterson
    Replied
    Originally posted by @Account Closed:

    Gastonia, NC and Rock Hill, SC which are both in commuting distance to charlotte are good markets to be in with great demographics. I would stay far away from Fayetteville if you're playing the long game

    Thank you for the input -- any idea on rental rates for either place at certain retail values - Still feeling the rental market rates out on craigslist.

    I'm going to be looking into joining a REIA in the area within the month, I found one that meets monthly, its ~ $150/year membership, but quite worth it for the connections if its legitimate

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    User Stats

    491
    Posts
    253
    Votes
    Chris T.
    Pro Member
    • Rental Property Investor
    • Charlotte, NC
    253
    Votes |
    491
    Posts
    Chris T.
    Pro Member
    • Rental Property Investor
    • Charlotte, NC
    Replied

    @John Patterson - The local REIAs are a great place to network and learn.  In addition to the REIAs there are lot of other local meetups of real estate investors.  Be sure to check out Meetup.com and the Events section under Networking here on BiggerPockets.

    I also host a local networking event with other BiggerPocket members each month if you are able to make it.

    Charlotte, NC REI Networking Meetup - Tues. May 7th

  • Chris T.
  • User Stats

    12
    Posts
    2
    Votes
    John Patterson
    2
    Votes |
    12
    Posts
    John Patterson
    Replied
    Originally posted by @Chris T.:

    @John Patterson - The local REIAs are a great place to network and learn.  In addition to the REIAs there are lot of other local meetups of real estate investors.  Be sure to check out Meetup.com and the Events section under Networking here on BiggerPockets.

    I also host a local networking event with other BiggerPocket members each month if you are able to make it.

    Charlotte, NC REI Networking Meetup - Tues. May 7th

     Hoping I can make that next event! Had to work through this one sadly. Still thinking about and looking around for my first property. Feeling a bit of analysis paralysis -- but I feel I need more of an information foundation before I make any purchase decisions.