Q&A on Raleigh Investment Market

Good morning Active Rain Community:

This is a specific posting relative to the Raleigh, NC (and surrounding areas), Investment Scene.

Q: Are the number of investment properties increasing?

A: The number of investment properties on the market are increasing, but a lot of the homes are still on the MLS (multiple listing service), from last year. These properties need a lot of work.

Q: Are the prices dropping?

A: The prices on single-family properties are dropping. The prices on multi-family investment properties are holding steady. In fact, I think the prices will begin to go up again in the next year. This is because Raleigh does not have a huge inventory of multi-family homes.

Q: How strong is the rental market now?

A: The rental market seems soft but I would attribute that to season. During the spring, summer, and early fall I have a lot of demand for properties around the $1,000-1,300 range. There are a lot of people relocating here at this price point. There is also a huge inventory of "cookie cutter" large apartment complexes.

At a $750-$850 rental rate the max sq.ft. you are looking at is around 1350, and typically these properties are not in the best of conditions (paint and carpet wise). Most of the owner's are negotiating $25-50 off the rental price for a two year lease.

Seller financing (lease option), is a good way to go now for single family rentals. Because prices are down on sales, and the loan qualifications are becoming stricter, this seems like a great strategy to peak interest in an otherwise dead market.

Q: What areas are you personally looking at now in Raleigh for investment?

A: We already own 2 duplexes and 1 single-family property in Raleigh, located Downtown (Inside 440), and in North Raleigh (<2 miles from North Hills Mall).

The areas I am looking at now are south of 440 and southeast of 440 (inside proposed 540 Highway extension).

There are also good deals in the NE quadrant of Raleigh off of Capital BLVD.

I've been fluctuating a bit between single-family investment and multi-family investment. Multi-family investments (long term appreciate and cash-flow), tend to have a better return but I also like the concept of buying a nice single-family property now that breaks even and selling it for 20-30k or more in 2-3 years.

The only problem is that you max out on FHA loans at four properties.

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I hope that individuals looking at Raleigh Investment will be able to use this information to their benefit.

If you are considering investing in the Raleigh market I would be happy to arrange a consultation to explain my services.

Thank you for reading!!!