All Forum Posts by: Caleigh McDonough

Thank you for taking the time to read my post! I am thinking of moving from AZ to Charlotte, NC May 2025. I found a new build I like and in my price range while visiting Charlotte this weekend. I plan to purchase the property with 5-10% down, live in it for a year or two with a roommate, then rent it out full-time and repeat! (at least for the first few properties) I do not need cash flow in the short run but my ultimate goal would be to retire early from my investment properties.

I know Charlotte is growing, so I'm hoping for some appreciation long-term and I know cash flow can be harder to come by these days. However, after running the numbers accounting for insurance, PMI, taxes, vacancy, capX, property manager, etc. the property is estimated -1.85% cash on cash return (-$600/mo) once I fully rent the property. To be conservative, I assumed rents will be on the lower end of the spectrum. CoC just about breaks even if I assume rents are on the higher end of the spectrum.

My questions are:

1. Should I wait until I can put 20% down on a property to decrease the monthly mortgage payment? I believe this is one reason none of the deals I analyze are cash-flowing.

2. Are any <$350k single-family deals cash flowing in Charlotte? Again, not my main goal but it also doesn't seem wise to be short $600/mo.

3. Anything else I should be thinking about? I typically wouldn't look at new builds but it seems to be very reasonably priced. The community is new and secluded with trees but is NW of Sugar Creek & SE of Oakdale.

Happy to provide any more context

1 Vote

Quote from @Johnny Lynum:

Hey,@Caleigh McDonough! Great questions!

I agree with @Michael Smythe to consider the time to save vs the appreciation.

For the 20% down, it'd lower your mortgage and eliminate PMI, but buying now could help you start building equity and gaining appreciation. Just keep an eye on interest rates and your ability to cover any cash flow gaps.

Consider properties that need a bit of work or up-and-coming neighborhoods for better deals. Or renting out by room can be an option for better CF.

I’d look at the long-term value in that secluded newly built community—sometimes those areas can grow well, but they can also take longer to appreciate. Plus, you want to make sure you’re comfortable with the commute and potential tenant demand.

Oh, and curious, have you started making connections in that market - lenders, contractors, agents, or perhaps other investors too? I think that'll help you gain more insights into the market and start building your team for the long-term game.

Thank you for sharing your perspective! I agree that building my Charlotte network would provide more insight. I need to think more about saving for the 20% tradeoffs as well.

0 Votes

Charlotte, North Carolina

Quote from @Rick Albert:

The challenge is going to be qualifying for each property.

So you are negative $600 a month on the first one, you will need to have the personal income to cover it and then still buy the next one.

A couple of thoughts:

1. Does the builder have any incentives to work with their chosen lender? For example they will buy down the interest rate.

2. Do you need a property manager? Manage it yourself to get the experience. PMs are actually very expensive. They typically charge to find a new tenant, renew leases, and upcharge on maintenance. So when they say they charge 10%, it is really 15%-18% of the gross rents.

3. You should put money away for cap-x and repairs, but also look into detail on the builder's warranty. For example in California there is a 10 year structural warranty by law (and shorter warranties for different systems). Maybe you can tweak the numbers since it won't be immediate.

I hope this helps.

Thanks!

Hi Rick - That definitely helps! The builder does have incentives that I already priced in. I reran the numbers without a property manager and its still a few hundred negative. That's good to know for future analysis that a property manager is more than 10% though!

I was thinking of maybe lowering capx the first few years because of those warranties but wasn't sure if that was frowned upon.

I'm going to look for a different property but you gave me a lot to think about. Thanks!

1 Vote

Charlotte, North Carolina

Quote from @Wale Lawal:

@Caleigh McDonough

Here are the pros and cons of waiting for 20% down on a mortgage in Charlotte, suggesting starting with 5-10% down, leveraging owner-occupied financing, and refinancing. It also discusses the market's challenges in finding cash-flowing single-family homes under $350K. It suggests neighborhood analysis, market research, exit strategy, and VA benefits.

Good luck!

I'd love to learn more! Is there a resource you can share? I'm not seeing a link or anything.

0 Votes

Charlotte, North Carolina

Quote from @Kevin Akers:

Hi Caleigh!

Happy to hear you are relocating to Charlotte, NC. House hacking is definitely a great approach to get started in building your rental portfolio. Charlotte is a fun city and a great place to invest. It is not uncommon that some properties don't CF until 5 years down the road. Here are some suggestions:

1. Save up the 20% to eliminate the PMI and reduce your overall monthly mortgage. What would your CF look like and would it be worth the extra investment?

2. Rent the property out by the room to increase CF. If you think this is a good option for you, there is a company I can get you in contact with that will help create even more bedrooms and maximize the space for this investment model.

3. Use the property as a short-term or mid-term rental. This will be more hands on managing the properties.

Thank you for the ideas Kevin! I don't mind being more hands-on managing the properties at first if it means better cash flow until I can refi. I will keep you in mind if I decide to create more bedrooms. Thanks!

0 Votes

Charlotte, North Carolina

Hi Michael - Thank you for your thoughts! I should only take another year to save the extra funds. I've been saving up for a property for the past few years, so I may be getting too eager and jumping the gun. I'll look into how much surrounding properties have increased in the past few years.

#2 is a great idea as well!

There's definitely a lot to consider. Thanks again.

0 Votes

Charlotte, North Carolina

My questions are:

1. Should I wait until I can put 20% down on a property to decrease the monthly mortgage payment? I believe this is one reason none of the deals I analyze are cash-flowing.

2. Are any <$350k single-family deals cash flowing in Charlotte? Again, not my main goal but it also doesn't seem wise to be short $600/mo.

Happy to provide any more context!

1 Vote

Charlotte, North Carolina

All Forum Posts by: Caleigh McDonough

Caleigh McDonough has started 1 posts and replied 7 times.

Post: How to retire early with real estate & other community questions

Post: House Hacking My First Property that Doesn't Cash Flow

Post: House Hacking My First Property that Doesn't Cash Flow

Post: House Hacking My First Property that Doesn't Cash Flow

Post: House Hacking My First Property that Doesn't Cash Flow

Post: House Hacking My First Property that Doesn't Cash Flow

Post: House Hacking My First Property that Doesn't Cash Flow