New (soon-to-be) Investor in Raleigh, NC

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New (soon-to-be) Investor in Raleigh, NC

Keith N.
Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes

Hello BP Community,

Longtime triangle area resident here who is planning on purchasing his first property very soon.  I am plan to purchase either a single-family or multi-unit home (although multi-units seem to be scarce in Raleigh).  I will owner occupy this house for about a year, until I've saved enough to purchase another property, at which time I will turn the original into a cash flowing rental unit.  My budget is ~ 100K for a single-family and ~ 160K for a multi-family (assuming I can expect to have tenants in place in the additional units to cover the mortgage).

Basically, I have been reading up on investing in real estate as a form of passive income, and I have become hooked to the idea!  If anyone has any useful tips specifically for investing in Raleigh and surrounding areas, please shoot them at me!  Specifically, I am interested in getting opinions on agents who may be best suited to work with someone in my position.

Thanks in Advance!

- Keith

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Steve Combs
Investor · Cary, NC · Member since 2015 · 79 posts · 34 votes
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With your budget, its going to be tough to find a good property in the area unless you looking at a condominium or townhome. For investment properties I have better deal in the Greensboro or W-S market. Is there a certain part of town you were looking at, since this would be your primary residence to begin with?

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  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
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    @Keith N. 

    BP is full of useful resources such as forums and blogs. Welcome to the Bigger Pockets community-be sure to check out all the awesome BP blogs under “Learn.”

    0Reply
  • Steve Combs
    Investor · Cary, NC · Member since 2015 · 79 posts · 34 votes
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    With your budget, its going to be tough to find a good property in the area unless you looking at a condominium or townhome. For investment properties I have better deal in the Greensboro or W-S market. Is there a certain part of town you were looking at, since this would be your primary residence to begin with?

    2Reply
  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    Hi Steve,

    Since this would be my primary residence, I would like to find something within 10-20 minutes of downtown Raleigh.  I'd be primarily looking for Raleigh homes however close-by areas of surrounding towns would also suffice.  From the research I've done, it seems like most areas of Raleigh would suit me fine excluding South Raleigh and Southeast Raleigh (from what I understand, these are higher crime areas).

    I know finding a home on a 100K budget might be somewhat tough, but I have seen some decent looking detached single-family properties for sale/sold in Northeast Raleigh as well as other parts of Raleigh for 100K and even below.  I have no problem looking into homes with some cosmetic issues (paint, carpet, etc.), as I'd have over a year to fix these problems on my own time.  

    In your opinion, is it really too much of a stretch to find a liveable home in a decent area of Raleigh given my price range?

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  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    @Steve Combs

    Hi Steve,

    Since this would be my primary residence, I would like to find something within 10-20 minutes of downtown Raleigh. I'd be primarily looking for Raleigh homes however close-by areas of surrounding towns would also suffice. From the research I've done, it seems like most areas of Raleigh would suit me fine excluding South Raleigh and Southeast Raleigh (from what I understand, these are higher crime areas).

    I know finding a home on a 100K budget might be somewhat tough, but I have seen some decent looking detached single-family properties for sale/sold in Northeast Raleigh as well as other parts of Raleigh for 100K and even below. I have no problem looking into homes with some cosmetic issues (paint, carpet, etc.), as I'd have over a year to fix these problems on my own time.

    For reference, these listings below appear to be within my price range and in a relatively safe area of town:

    http://www.realtor.com/realestateandhomes-detail/4...

    http://www.realtor.com/realestateandhomes-detail/4...

    In your opinion, is it really too much of a stretch to find a liveable home in a decent area of Raleigh given my price range?

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  • Steve Combs
    Investor · Cary, NC · Member since 2015 · 79 posts · 34 votes
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    I don't know to much about the Northeast area as my stomping grounds are Cary and West Raliegh, which would be tough to find something near your budget. If your up for a lot of rehab work, I have had friends that have done well in the downtown area. 

    Have you looked at Durham? It has a little more of a reputation, but there are some good areas that are somewhat more affordable for first time buyers.

    I would also suggest saving as much as you can over the next few months to help give you budget a boost. And have you talked to any lenders? There are some first time buyer loans that can increase your purchasing power, but there may be restrictions on how soon you can rent it out.

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  • Henry Moore
    Wholesaler · Raleigh, NC · Member since 2015 · 66 posts · 22 votes
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    Hi @Keith N.,

    Welcome to BP. 

    0Reply
  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    @Steve Combs

    Yes, I have been using various listing sites to comb through properties for the last couple weeks, and at this point I need to start actually talking to other investors in the area as opposed to falling deeper into the rabbit hole of obsessively searching online. I have viewed lots of single-family and multi-unit properties in Durham, and some of these properties appear to be much less expensive than Raleigh.  However, I am unfamiliar as to which parts of Durham are deemed "decent" and which areas are war-zones.  I assume anything in close proximity to Duke University/Hospital is an okay area and has lots of potential renters? Maybe NCCU as well?

    Regarding lenders, I have not spoken to any yet and to be honest I'm not sure where to begin. My apologies for being a complete noob, but which exact "lenders" would you recommend I contact and what types of questions should I be asking? Will any bank suffice? I'm aware that in the current market, lower down payments via conventional loans are commonly accepted (5-10%) as well as the 3.5% FHA loan which I may qualify for. Beyond that, I have limited knowledge.

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  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    @Henry Moore

    Thanks Henry!

    0Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
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    @Keith N. try using IMaps for better information on overall neighborhood crimes.

    http://www.wakegov.com/gis/imaps/Pages/default.aspx

    Remember that "safety" is relative. A broker won't tell you that an area is "safe" vs. not safe. It's up to you to know what to look for and do the research. IMaps can help as a tool, but it isn't perfect either. But (much) better than nothing.

    BTW the areas you identify also have a fair number of investors in them. So keep that in mind as you look. Some people say/think that more renters in an area make for a bad area. Again, something you should research. A broker may be able to tell you Owner Occupancy density in the areas you are looking....

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  • Steve Combs
    Investor · Cary, NC · Member since 2015 · 79 posts · 34 votes
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    There are some good areas around Duke, but I would stay away from NCCU its pretty sketchy. I would stay to the area around Southpoint, zip 27703, I think.

    For lenders, if you are a member of a local credit union, I would make an appointment with a loan officer to see what they can offer and also check with a regular bank mortgage and a national mortgage company. Your can also check out the NC Home Finance Agency to look at their programs for first time buyers http://www.nchfa.com/homebuyers/HBhomebuyers.aspx

    1Reply
  • Mark Brogan
    Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
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    welcome @Keith N.

    read,listen to the podasts,ask lots of questions and then get to worl learning your market 
    good luck

    1Reply
  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    @Steve Combs

    Thanks. I'll probably be speaking with some banks tomorrow.

    0Reply
  • Keith N.
    OP
    Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
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    @Chris Martin

    Thanks.  Do you know which areas of Raleigh residential investors tend to look into from a purely cash-flow standpoint?

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  • Jerry Johnson
    Property Manager · Raleigh, NC · Member since 2015 · 21 posts · 5 votes
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    @ Keith Nelson

    Welcome to BP.  I own a few SFRs and BP has been an incredible source since becoming a member few months back.  Good Luck and I'd love to assist.

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
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    Welcome @Keith N. it’s a pleasure to have you here! You will find this a tremendous resource for all of your real estate needs. You may want to set up some “keyword alerts” to notify the topics that interest you the most.

    All the best to you!

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  • Account Closed
    Investor · New York, NY · Member since 2008 · 169 posts · 73 votes
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    @Keith N.

    As rare as they are, some multis do exist in clusters in Cary within your price range, although you might need to put in a bit of work yourself - sounds like you're ok with that, though! 

    Here are a few that just sold/under contract recently (same investor seller). I had these in my favorites just to see how long before they go under contract & sold and at what price:

    Cary Duplex Rainbow Court

    Cary Duplex Rainbow Court #2

    Cary Duplex Rainbow Court #3 - Under Contract

    So - keep looking. Set up alerts on Redfin/Zillow/with an agent - keep on top of the MLS and be ready to go look at the property when they pop up. Get a pre-approval from a lender first, so you can be confident with your borrowing power during your search.

    Also - drive around in the areas you like that have multis - like Rainbow Estates above - and take down addresses and maybe send a letter to the owner(s) - look them up on the county records. At best, they might respond. At worst, they will ignore your letter or tell you to not send them anything more. 

    There are a ton of investors in SE Raleigh. You can probably cash flow better there on paper than most areas, but it might require more effort on your end. Key phrase is "on paper", please do your due diligence and talk to investors that have or have had properties in that area.

    You might also want to consider the upper part of Garner - that will put you close to the city, as well.

    Good luck!

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
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    Originally posted by @Keith N.:

    @Chris Martin

    Thanks.  Do you know which areas of Raleigh residential investors tend to look into from a purely cash-flow standpoint?

    Purely cash flow? As @Account Closed said, SE Raleigh. South of MLK, east of Garner Rd. Older neighborhoods with wider swings in prices and property condition.

    0Reply
  • Henri Meli
    Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
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    Welcome to BP @Keith N.. Our market is RTP is pretty solid and lots of out of state investors are coming in to invest.

    There are plenty of areas to invest. Inside the 440 Beltline, around campus of NC State is your best bet.Most of the houses there are your price range are older, but affordable. Most of the homes are student housing. You need to drive around and visit places to see for yourself. Greensboro/Winston Salem have a lot more rentals than the Triangle, so if you want to invest there, there are plenty of opportunities there as well. I have been lurking there for a bit now myself. 

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  • Michael Jobe
    Real Estate Broker · Triangle Area, NC · Member since 2012 · 587 posts · 214 votes
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    @Keith N.

    For $100k you'll be able to find what you're looking for in this market, especially considering you're not opposed to something that needs a little love. As for banks, if you have a relationship with a credit union start there. If not, get with a mortgage brokers rather than a Bank of America or Chase. The area Steve mentioned near Southpoint is actually 27713. Zip code 27703 starts just across the Wake County line as you pass Brier Creek and on down into downtown Durham. I live in 27703 and my neighborhood is very low crime but a 10-minute drive down the road can get into some sketchy areas.

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  • Jordan T.
    Rental Property Investor · Raleigh, NC · Member since 2012 · 56 posts · 23 votes
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    I know this is an old thread, but if I was back in Wake County and starting out, I'd definitely go with one of those Cary duplexes.  It's not a fantastic cash flow, but renting out one side will cover the mortgage and save you a lot of money.  And it's a B class area as well.  My first purchase was a townhouse for myself and I really wish I had bought a duplex instead.

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