Northern Virginia Market - Is Anyone Actually Making Money?

[Christopher Miller]

I moved to Alexandria, VA about a year ago and have been studying the real estate market in NOVA ever since. It's interesting listening to the BiggerPockets interviews and hearing everyone's success stories. But even after a year of listening and studying, I don't think I've been able to find any sort of strategy that works in this market besides buy and hold for 10 years.

Single family house and rent out? HA! If any seller even thinks about selling a cash flowing house, 50 offers will be in their inbox within a day. Needless to say, this doesn't exist here. 

Small Multi-Family? Simply doesn't exist here. My agent said one hit the market two years ago for 1.3 million as a joke and immediately took the listing down. They must have just been testing the market. 

BRRRR? This may have worked at some point. But the numbers don't make sense on any properties here. Nearly every home is a fixer upper, and with the labor costs here, you're lucky to break-even on the re-appraisal. I've been quoted for over $100k on simple projects to my house. In the upcoming years, the BRRRR will be very difficult to achieve. With falling interest rates, home prices naturally rise creating significant tailwinds for BRRRR investors. This was the case in the past 10-12 years. Now we're looking at the opposite scenario once interest rates begin to rise.

Room Rentals? Would work but its illegal in Loudon/Fairfax/Arlington county to house more than 4 tenants per dwelling. With 4 roomies, the rents aren't high enough to turn a profit. 
 

I'm really aching to know if anyone out there in this market is cash flowing any properties and how they are doing it. If you are, can you go through some details of your deal and how you did it?  

[Aj Parikh]

Definitely buy and hold in the area is the only way. I have been looking for a property to flip and its just impossible to find something. Even off market deals are going above asking price with multiple buyers. 

I purchased a 2bed 2bath condo back in 2014 in Alexandria, VA for 130k and I was able to pay it off in 5 years by saving a lot. Finally, I am seeing the returns on it because it is renting for $1700 / month and its valued at $235k as of today. So its definitely a buy and hold game in this area. Good luck with the investing journey!!