Buy and Hold option in NC: market condition

[Viktoria Barrett]

Hello,

Currently reside in NY, I'm new to REI, and right now in process of learning investment strategies and markets.

I'm thinking about buy and hold option in NC. I would appreciate any insight on the current market in NC. Is it a good time to purchase multifamily/ house for rental. I'm also looking at PA, NJ and PR.

Thank you all!

[Peter Faulkner]

Hi @Victoria,

I am a real estate investor from North Carolina, living in New York. I've done two deals in the last 18 months in which I've accrued (in partnership) a total of 16 units. Both deals were multi-family deals. 

The first deal was 14 units (3 adjacent buildings) in downtown Winston-Salem. We bought it in cash at a 7% cap and then refinanced out after we had build a very large reserve. With leverage the return on the cash is in the mid 8%'s. There is still room to raise rents, increasing the value of the property, and will impact the IRR over time.

The second deal was a duplex a mile west of UNCG. This has been my favorite deal. Purchased at $135k. Put a total of ~$34k more into it (renovations, LLC creation, splitting commission, all closing costs, all ancillary costs etc). It then appraised for $200k, allowing me to pull $140k (70% LTV) out in a cash out refinance. That leaves me with $31k left in the deal. With rents at $985/side, and assuming ~50% expense ratio, and an annual debt service of ~$9277, that gives me a little over an 8% return on the cash left in. Furthermore, appreciation has been steady in the area - not like Charlotte, Raleigh, or Durham, but steady.

Not sure why I wrote all that :) I'm just excited about investing in North Carolina and know it's possible while living elsewhere. For me the key has been partners and folks I trust on the ground.

Happy share more or connect. 

Peter