All Forum Posts by: Danny Kaminsky

Hey BPers!

Does anyone have a great experience working with a builder in the Wilmington/Topsail area? My family owns a few lots on Topsail that they are thinking about building on, and would love a recommendation for the best builders in the area. Thanks in advance!

Keywords: Holly Ridge, Surf City, Topsail, Wilmington, Sneads Ferry, Camp Lejeune

@Cheryl S.

Population in the whole area is exploding. New high-wage jobs in tech (Apple and Google) and the other jobs that will follow are pushing up housing prices, but have yet to have a huge impact on rents. It’s really hard to find a deal in a decent neighborhood that will cash-flow, unless you do a student rental or Airbnb. Further out (like Burlington or Fayetteville) it is possible to find a cash-flowing deal, but appreciation and population growth will likely be slower.

@Cheryl S.

If you’re only willing to buy in a B+ or better neighborhood, Raleigh market is the wrong place to look IMO. Prices have really made a run up recently especially on the high end, rent to price is down to around 0.4% for sfh in those neighborhoods. The suburbs are possible though.

@Marlia Stone

Others on this forum have given good answers to most of your questions, but “What demographic is the most risk?” tells me that you might not be super familiar with Fair Housing laws. Make sure to read over those carefully before screening anyone out, and if you have any questions, ask an attorney.

@Gopi Chand

Hi Gopi,

I hadn't even heard of BP when this thread was posted, but I am active in the Raleigh-Durham market. "Normal" rentals (like a 3/2/2 SFH) are quite tricky in Raleigh right now, since big homebuyers like Zillow and OpenDoor are snapping them all up. Durham is slightly better, but has its challenges as well. You'll likely have to look in the suburbs, student rental, or a Class C project that needs work if you want any cash flow. Happy to chat more if you're interested in entering this market (and I'm not a realtor, so no sales pitch). Hope this helps

@Adam Romano

It depends greatly on what you mean by a "become a good area". There are already part of North and NE Durham that I would feel completely comfortable walking through at night, but there are parts where I wouldn't get out of my car during the day. Every neighborhood will see pricing and rent tailwinds because of all the tech jobs in the area (starting total comp for an New Grad Engineer at Google in Durham is in the neighborhood of 160K), but there will likely always be Class C/C- areas. I would stay away from the very worst streets, but I think you can basically throw a dart in Durham and you will probably be doing well 20 years from now.

With that being said, you should not throw darts. Be very careful that you could survive a recession, because one will happen, and you will lose your shirt if you can't hold on in those times. Not saying one will happen next year (Josh and Brandon described the market at "toppy" in 2014. It was not.) but you should be ready if there is one the day after you close on any property.

Also @Edd Morgan fantastic work from your team on the new-look forum.

@Ralph Plaskett

Glad to help. The Triad refers to Greensboro-Winston Salem-High Point, which is a less hot market at the moment, much weaker (but still okay) in terms of employment and demographic trends.

As for Class A, B, and C areas, you will have to talk to a good real estate agent. I might catch some flack for this, but I think a good screening question is “what part of East Durham would you invest in” (or Southeast Raleigh if you prefer that market). A great agent will know the parts of those areas that are turning quickly. I like East Durham because it used to be a Class F area (think bad part of Detroit), so an experienced agent who doesn’t know the area well anymore still tell you to run away, but there are now some really nice B/C streets. Just my 2 cents.

@Ralph Plaskett

Welcome to the Triangle! As Grant said, this is a scorching hot market. If you want cash flow in the Triangle, my opinion is you have 3 choices:

1. Small multi in a Class C area

2. Student rentals ( there are 3 duplexes near UNC that look like they’d work on the market)

3. Off-market

Big homebuyers like AH4R will eat up everything else. If you’re willing to leave the triangle, the Triad has some cash-flow deals on the market. I’d get with a knowledgeable agent if you are going there, as there are some really rough neighborhoods. Hope this helps!

@Ceaneh Alexis

I would be extremely cautious about assuming appreciation. I think "icing on the cake", as many on BP call it, is the right way to look at it. I don't know Atlanta on a local level, but I know the is definitely room for the whole city to appreciate. A lack of building permits, as in every major metro, tend to limit supply and drive appreciation. As long as you won't lose money every month if prices and rents drop 10-15% overnight, you will likely be safe if you also have generous assumptions for vacancy, maintenance, and Cap-Ex. Just my 2 cents

@Jason Malabute

1. I'd suggest the area around Legion Road and the area north of Rosemary Street, these are pretty much the only "affordable" areas left in core Chapel Hill in my mind. Maybe also west toward Chatham County.

2. Roughly speaking yes, but again I am not a Raleigh expert.

3. Google and Apple don't know any secrets, it is just the reality that there is a lot of tech talent here. UNC, Duke, and NCSU produce a lot of solid tech talent (I'm biased as a recent UNC CS grad). Apple and Google are just the first movers, I expect a ton of other companies will follow suit. Most big investors have been asking the question "Where is the next Austin, TX" for years, I suspect Raleigh-Durham is that market