All Forum Posts by: Alex Corvin

Thanks for the insight @Chris Martin, I always get some value out of your posts. Are you actively buying anywhere else in the Triangle right now? In addition to 27603, what other areas do you like? What are your thoughts on some of the smaller sides on the edges of/just outside the triangle? I'm looking for my next small multifamily deal, and the pickings are slim in the core of the Triangle so I'm starting to consider areas like Johnston County.

Do you know what the HoA fees are?

Thank for putting this together @Dawn Brenengen See you all there!

Is the HoA fee taken into account in that $230/month cashflow number? If not, it's more like $130/month. I think it's generally a good idea to save about that each month for repairs (paint, carpet, etc. whenever you have tenant turnover), which means you're roughly cashflow neutral. I think the question is what your investment strategy is. I live in the Raleigh area and am optimistic about the long term economics of the area, so perhaps no cash flow in the short term is acceptable if you account for long term equity pay down and potential for appreciation.

I think how you get started depends heavily on what you want your end game to be. Do you want to flip houses? Do you want to be a landlord? Do you want to be a wholesaler? Something else?

Hi Keinetta, do you know what niche of real estate you're interested in? Have you started doing any research? The bigger pockets podcast is a great resource, and you should really listen to every episode. What real estate books have you read recently?

Hey @Patrick Young and welcome! I'm just getting started as an investor here in Raleigh as well and just closed on my first deal. 

I generally look for the 1% deals (rental income = 1% of the purchase price). I find that this leaves room for mortgage payment, saving for all expenses/reserves, and cash flow of about $100/month. I don't worry so much about cash on cash returns.

You'll find that 1% deals are much easier to find in some markets of the Raleigh/Durham area than others. I know they can be found in Durham, but I don't really know the area well enough to feel comfortable investing there. There are also areas in east/south raleigh (Garner, Clayton, etc) where they can be found.

That's my 2 cents. I'd love to hear what others have to say!

Welcome @Steven Singleton! I'm a new buy and hold investor myself (I just closed on my first rental on Friday). I live in the Raleigh area and specifically invest in Cary. Have you given any thought yet to which areas you're planning to buy in?

Thanks for all of the input, guys! This is definitely my most successful forum post in terms of generating good discussion.

The summary of this update is that, after more thorough analysis, I think this deal will cash flow enough to be worth it. For more, read on.

I thought I'd give an update on where my thoughts are with this property. Based on some input here, I decided to really dive in on the analysis of the deal, using the most accurate numbers I could get. The numbers I used in the past were generally rough estimates for things like how much to save for CapEx and how much to expect to spend on insurance.

I can lay out the specifics of my analysis if anyone wants, but here's a summary. The current rent is $785 and the tenant is on a month to month lease. I'd like to keep the current tenant (the seller, who has some experience, says they have been great), but the rent is way below market. (Market rent, again, is about $1100-$1200). My analysis says that if I can get rent up to $900 then I'll cash flow about $50/month. At $1100 (the lower end of market rent), that number goes up above what I'd like my minimum to be ($100/month).

I really think this is enough cash flow to be safe. It covers all PITI, 1 month of vacancy, property management (I plan to self manage for now, but want to budget for future growth), and about $200/month for CapEx and repairs. There's $100/month in cash flow left over to make it worth my time. This works even if there is no appreciation, but I truly think there is huge potential for appreciation given the property's proximity to a downtown area that's being revitalized.

Any thoughts? What am I missing?

I really appreciate all of the great feedback I'm getting from everyone here. It sounds like the consensus is that I should hold out for a better deal for now, or try to find a way to structure this deal to make it cashflow better now.