Need Help for Potential Real Estate Deal in Cavalier North Dakota

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Need Help for Potential Real Estate Deal in Cavalier North Dakota

Mahad Fahieh
Investor · Denver, CO · Member since 2015 · 24 posts · 4 votes

Hey all,

I'm looking to purchase my first investment property in Cavalier, ND.  I've been spending the last couple days analyzing this deal (https://www.biggerpockets.com/calculators/shared/2...) and its pros/cons.  Here's what I have so far: 

Background: Cavalier is a small town (pop. of ~1500) in NE North Dakota, which is approximately 1.5 hours from the nearest large city (Grand Forks and Winnipeg).  It's also near Cavalier Air Force Base, where I'm stationed at the moment, but will be PCSing soon and don't anticipate on returning.

This, as you can imagine, poses a few problems, mainly related to support for the home (ie. property management, repair services, etc).  Between this and factoring taxes on gains, I'm having a hard time ruling this as a home run.  On the other hand, the numbers are solid and there's a constant need for housing amongst our members here on base, which is keeping my interest.

So I ask, am I crazy to consider this or is worth jumping on?  Any insight helps.  Thanks!

-Mahad 

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  • Gabriel Amedee
    Investor · Miami, FL · Member since 2015 · 379 posts · 330 votes
    10y

    @Mahad Fahieh

    Firstly, I'm not familiar with this market at all but down here in Miami, a cap rate in 9-10% is a great sign. 

    I know many people here stick to the whole 1% rule when it comes to rental income and this property stands at 1.36% but my mentor and investors in my circle only go for home run deals that get as close as possible to 2% in rental income. 

    As a wholesaler, my biggest issue with this deal is paying anywhere near market value for a property. The thought of that makes me cringe as there are so many opportunities out there to purchase properties at 80% of market value and much often even less. 

    I'm sure someone with more experience in buy and holds as well as this market will pitch in some much better advice but just wanted to give my 0.02 cents in hopes that it provides another perspective. Feel free to reach out for whatever reason! Best of luck and happy investing. 

    Gabe

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  • Account Closed
    Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
    10y
    Originally posted by @Gabriel Amedee:

    @Mahad Fahieh

    Firstly, I'm not familiar with this market at all but down here in Miami, a cap rate in 9-10% is a great sign. 

    Of what?

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  • Landon Eskew
    Rental Property Investor · Spokane, WA · Member since 2016 · 43 posts · 18 votes
    10y

    Make sure to take a look at comparable rental rates and purchase prices in the area.  You're always going to need to fix a renter's hole in the wall or replace worn out carpet, just make sure that you're getting the best INITIAL deal you can, much like Gabriel mentioned above.  After that, make it nicer from there and squeeze a little better rent price out of it.  If everything else nearby is cheaper, no one will be willing to rent from you or bail on their leases early.  If everything is more expensive, you might have 100% occupancy, but risk being too cheap and always wondering if you should have asked for more money when they signed the lease.

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  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    10y

    Mahad,

    Call me to discuss this deal.  I've been investing in the local market here for years, which is the most important thing when looking at doing your first deal.  My number is on my home page.

    [email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
    Rent To Retirement5334 Reviews
    WebsiteView Page
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