All Forum Posts by: Steven Singleton

@Karen DiNapoli don't be scared of the word 'vacancy'. It's just a number. 

As long as you use a conservative model and the numbers still work out, then it's probably a good deal. 

For example, Raleigh has about a 6% vacancy rate, plus or minus some depending on the neighborhood. For all of my deals, I start with assuming a minimum 15% vacancy rate and 10% property management. 

If it takes nearly 2 months to fill my property, which is highly unlikely, no big deal. If I can get property management services for 8% --- even better return. I've already accounted for these factors in a way that still allows me to stay in the black.

Thanks all!

Appreciate the warm welcome :) 

I currently have one home under contract near Enloe HS. Hoping to get one more locked in before the end of the year. It will be good to keep in touch with others who invest in the area. Please feel free to connect with me!

Thanks for the welcome!

There are more than a few reasons I decided with the Raleigh area specifically vs ATL or anywhere else in NC. I'm born and raised in ATL so, there are several points of scrutiny to the fever that came to mind. 

In summary, I believe Raleigh already has the seeds of sustained long term growth because of the availability of quality education at the K - 12 and Secondary levels. ATL can't provide this on the same scale today and is highly dependent on a migrant industry workforce. Raleigh has also stabilized on key metrics where ATL has not on a long-term basis (vacancy rates, rent variance). Finally, ATL has a much lower barrier to entry to buying a home and less surrounding areas that fuel growth - Raleigh has more suburbs and metro areas that project long-term growth than ATL does.

This is just my assessment & best guess w/ the info I have. Who knows what the markets will actually bring :)

---- More Context Below ---

1. Market within the city limits generally seems feverish due to speculation on future development. The Beltline seems great but it hasn't materialized yet :) Many of the communities that are supposed to be "revitalized" by Beltline development are places that have just been of a much different profile for a long time. The change people are hoping for will not happen over night.
2. There's generally a high variance in the type of community one might encounter in ATL vs in Raleigh. What do I mean by that? Let's look at:

• Schools - ATL still doesn't have a great handle on public education. Many of the schools just don't perform that well right now except for North Side of ATL (Grady HS for example). It's getting better but it's not stabilized yet. In Raleigh, even the lower income communities consistently have schools rated average to very good available to them in the city. That is great long term in my eyes.
• Rent Variance - Income inequality is super real in ATL. You can see it in the rent variance across the city which is something staggering between 10 - 12%. In Raleigh, that variance is closer to the 4% range. It's much easier to maintain long term renters because it's not as easy to trade down.
• Barrier of entry to a home - Stats just show me that the average salary needed to buy a home in ATL is much less than the salary needed to buy a home in Raleigh. It's harder for people to save up a down payment 
• Vacancy Rates - ATL is a textbook definition of sprawl. Combine this with high rent variance and you get vacancy rates that differ greatly from community to community. Sometimes, they will be very low - in these communities you typically will pay a premium and get lower returns. In many communities it's high - that's just not something I'm personally about.
• Raleigh has Less flipping - lots less. A market where lots of people are trying to make a quick buck just doesn't fit with my investment strategy. This can be see quite a bit in the Beltline area. This is just part 2 of my speculation observation. 
• Finally, personal attachment :) I'm from ATL and love my city. I'm more likely to find a way to make the model work than just listening to the numbers. I decided, as an investor, that's not the type of burden I want on my decision making ability.

Check out PWC's 2016 Emerging Real Estate Trends report - read between the lines on page 41 you'll find some of these claims briefly validated. Also check out my favorite "Best Market" lists for a quick peak into how I started looking at this (Texas is the clear winner here but I find it difficult to do business there right now).

Hi everyone, 

My name is Steven. I've only been a light consumer of Bigger Pockets information in the past but decided to really dive in and join the community. I live in the Bay Area of Northern California. However, I'm from Atlanta and am laser focused on buy & hold over the long term in Raleigh, NC.

I look forward to meeting and working with others on this platform!

Hi there,

It depends on what your strategy is. I am particularly focused on buy and hold real estate over the long term. 

There are a few options that come to mind. The options netted out in different ways for me but it all depends on how much effort each investor is willing to put into their new adventures!

You may have come across these in your search:

• Home Union - This is a pretty slick option. They will just do everything from A to Z for you. Help with purchase, manage renovations, manage tenants etc. I vetted them and they seem legit. Unfortunately, the fees are a bit high including 3% of home sale price and 10.5% property management fees. I've noticed that all of the inventory on their site in my investment areas include properties that have been tough to sell on the primary market for one reason or another. Expect at least some light renovations on these properties.
• Roofstock - This website advertises turnkey rentals that are cash flowing on day one! That was a pretty exciting option that I looked into as well. Unfortunately, once I began to learn more about the company I ran --- FAST! Review any contract from this company VERY CAREFULLY. They leave lots of loopholes that help them avoid liability and do not protect the buyer (this is how they are able to keep their fees so low). Second, their properties are not always in the most desirable areas. Third, crunch your own numbers. The numbers they provide on the marketplace are really feel-good numbers that don't include all the costs :) Real people use this platform and it might be fine. The lack of legal protection was too dodgy for me, however.
• Thumbtack - I finally decided to have a go at it myself and get a real estate agent. This platform helped me connect with an agent whom I've formed a great relationship with. She's very attentive to my needs and she's an amazing market expert. To use this platform most effectively, I suggest putting together a one-pager with an intro to yourself in addition to your goals and strategy for investing. We collaborate with each other on properties through Google Docs and leverage Duo to video chat during property walkthroughs. 

With that said, I don't know the legal implications of an Aussie investing in North American property.  Definitely consult with a legal professional to understand the implications of investing abroad. Perhaps someone else can comment on that :)

Interesting resource! However, I will say take it with a grain of salt. The concept of a "Best Real Estate Market" can be highly dependent on environmental factors and your personal investment strategy.

There are many factors one should look at including but not limited to:

• Vacancy Rates
• Housing Starts / Completions
• Appreciation
• Sale Prices
• Public Development
• Corporate Investment
• Employment Rates
• Price / Rent Variance

It can be easy to get overwhelmed with such a huge variety of metrics. But, it's important to determine what metrics are important for your"best market" based on your investment strategy.

• If I'm trying to gain on Appreciation and exit my position in 3 - 5 years, Austin might be a great bet.
• If I'm trying to fix & flip to exit my position quickly, Atlanta might be a great bet.
• If I'm trying to buy and hold over the long term Tampa might be a great bet.

Lists are fun to look at but, don't use lists alone to make real long-term decisions :)

*The above are not actual recommendations by strategy. Purely examples.*

Hi Karen,

I think we're in similar stages of getting started. I've done lots of research before choosing to settle on an area for investing. Personally, I chose the Raleigh, NC area however, your goals may be a bit different than mine :)

Along the way, I've found several great resources to help me make my decision. I think the best and most objective source to date is the PWC Emerging Real Estate Trends report.

There are reasons I chose not to go with Austin, Atlanta, and other hot markets of the sort after looking deeper into the environmental factors. Similar to others, I'm also happy & excited to share my experiences. It's been a very interesting learning process for me.