Took the plunge - Townhouse in Raleigh

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Took the plunge - Townhouse in Raleigh

Larry Zucker
Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes

Investment Info:

Townhouse buy & hold investment in Raleigh.

Purchase price: $195,000
Cash invested: $40,000

First investment. Purchased townhouse with renter already in it. Has HOA which covers larger expenses like roof and siding, plus maintains property. Self-managed. Community pool included.

What made you interested in investing in this type of deal?

This type of deal has low maintenance since the HOA covers big ticket exterior items and it had an existing good tenant which meant immediate cash flow at closing.

How did you finance this deal?

Conventional financing was used for this deal.

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Jiri B.
Rental Property Investor · Raleigh, NC · Member since 2017 · 157 posts · 169 votes
6y

Good for you @Larry Zucker. First property is usually the hardest..

But be careful about your assumption that HOA pays for the roof / siding / any large items.. You pay and the other homeowners pay for that. So unless they have ton of money in reservers and roofs needs to be replaced, they will just do a special assessment and send the bill to the homeowners. So here in Raleigh, unless you pay hundreds of dollars on HOA every months, the chances are, they won't have the money for those repairs (they also send annual statement so you can get a feel from that as well what their expenses are). So it is extremely common to do special assessments for roofs, decks, sidings, roads (if private) etc.. Just something to keep in mind.

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  • Ann Shanley
    Investor · Lake County, OH · Member since 2016 · 124 posts · 55 votes
    6y

    @Larry Zucker  Congrats!!! 

    0Reply
  • Jiri B.
    Rental Property Investor · Raleigh, NC · Member since 2017 · 157 posts · 169 votes
    6y

    Good for you @Larry Zucker. First property is usually the hardest..

    But be careful about your assumption that HOA pays for the roof / siding / any large items.. You pay and the other homeowners pay for that. So unless they have ton of money in reservers and roofs needs to be replaced, they will just do a special assessment and send the bill to the homeowners. So here in Raleigh, unless you pay hundreds of dollars on HOA every months, the chances are, they won't have the money for those repairs (they also send annual statement so you can get a feel from that as well what their expenses are). So it is extremely common to do special assessments for roofs, decks, sidings, roads (if private) etc.. Just something to keep in mind.

    1Reply
  • Larry Zucker
    OP
    Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
    6y

    Great advice @Jiri B.  Thank you.  Will definitely track down the most recent financials.

    0Reply
  • Jonathan Carter
    Real Estate Investor · Raleigh, NC · Member since 2014 · 63 posts · 38 votes
    6y

    Congrats! A townhouse with a tenant in place is a good easy way to start with your first deal. 

    What are you goals going forward?

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  • Larry Zucker
    OP
    Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
    6y

    @Jonathan Carter

    Sorry for the late reply @Jonathan Carter. Just saw your post.

    My goal from here is to keep picking up buy and hold properties and possibly (if I can muster the will) do a couple of minor flips. Ultimately, I want to do real estate full time but for now I have to pay the bills.

    Always great to hear from another Raleigh person. Thanks for the post.

    0Reply
  • Alfred Uda
    New to Real Estate · Raleigh, NC · Member since 2020 · 32 posts · 13 votes
    6y

    Congratulations!!!

    What does your cash flow look like? and how many units?

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  • Larry Zucker
    OP
    Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
    6y

    @Alfred Uda

    This is a single townhouse with one unit of 3bed/2.5bath. It throws off $215/mo free cash flow and has a zero vacancy rate so far

    I repeated the same deal a couple of miles away which throws off a bit more cash due to higher rent.

    1Reply
  • Alfred Uda
    New to Real Estate · Raleigh, NC · Member since 2020 · 32 posts · 13 votes
    6y

    @Larry Zucker

    You have no idea how happy I am to hear this. You are doing it, nice one!

    0Reply
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