Getting Out of Paralysis and Searching for a Property
New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes
Getting Out of Paralysis and Searching for a Property
Most Popular Reply
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
3yQuote from @Zach Perry:
Hello everyone! I'm 22 years old and have been educating myself around REI for the past couple of years with books, this website, and the BiggerPockets podcast. My last post was over 2 years ago with asking about how to learn more! While everyone is always learning no matter what, I wanted to ask for any advice or helpful information regarding searching for duplex properties. Specifically in a market like Raleigh where (in my opinion) not many are available or when analyzing it, it's not worth investing in or it's too expensive when analyzing. Also I'd love for any more helpful tips on education regarding actually interacting with people aside from books and podcasts :)
Thanks everyone!
The fundamental problem, as @Tiffany Alexy pointed out and you already opined (although it is fact), is that the number of duplexes in the Raleigh market is small. In the past five years or so the duplex market has been able to command a premium. My view is that 0.2% of residential property is duplex per my analysis from several years ago. I couldn't find substantial duplex infill development recently from 434,294 Wake County records. You are looking for a needle in a haystack. One option (mentioned in other comments) is to try another market. Another is to try alternate investment asset types as Tiffany suggested.
Seems like a key point: "when analyzing it, it's not worth investing in or it's too expensive..."
My only other comment, and I will push back a little on some of the other posts, is that when you become a motivated buyer, you put yourself at a disadvantage. Real Estate is a capital-intensive business and buying just to 'do a deal', to me, can be a big mistake. I saw LOTS of 'investors' in 2005-2008 who were (or became) motivated buyers, ultimately face the harsh reality that the market isn't kind to bad financial decisions. As a courthouse buyer, I saw it first-hand. I would recommend not buying expecting to make mistakes just to learn from it. To me, this is bad logic. Investments are meant to contribute to your financial well-being, not detract. You are 22 and I would suggest you buy a primary residence first. Learn RE from taking classes, like the real estate commission teaches. Read and invest your energy in the North Carolina Real Estate for Brokers and Salesmen book that the RE commission used for their classes. Know the fundamentals. It's an investment you won't regret.
Related
my Feb 22 2018 post in Looking for multifamily duplex/fourplex
my Oct 15 2017 post in Is Raleigh a good cashflow market?
my Aug 12 2017 post in List Source Returning Small Numbers
45 Replies
- 3yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Zach Perry Raleigh is a great market. Ask yourself this; "My last post was over 2 years ago" - What REI related things have done during this time? Time is our most important resource.
- 3yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Zach Perry
Just take the plunge and buy your first rental. Your first deal is going to be your worst deal. You are not going to be able to learn everything you need to manage and operate that property efficiently till you have run into a problem that has exposed you to it and made you aware for next time. You don't know what you don't know. - Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes3y
Hey so to reply to the subject line, the way to get over paralyses is to take action. Literally it is the only way. Anything else is just thinking. Which is fine if you need time, but if ready for change you need action.
After reading your post, I’m thinking 1. You might not know a lot of other investors in your area? If so, you should double down on your networking. This can count as part of your “action” steps I’m referring to. When young and new it is 100% okay to vicariously live through another investors success, in your case locally.
2. I am also thinking you are only looking at MLS deals? There are a lot of ways to find better performing deals than what everyone looks to the mls for. Wholesalers or learning to wholesale and get your own motivated seller list, networking with agents and landing on a rockstar agent who can help you find listings pre-market, getting entrenched in your local tax sale or foreclosure auctions, and I can keep going…
it is hard for me to believe there are NO deals in your market. Remember, great deals are not found, they are made. We all make our own luck in REI. good luck. - 3yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
I agree with @Patrick Drury and honestly running numbers on properties in the same market should take no more 1 year. Any longer and you're not motivated to BUY. You haven't networked. You haven't stuck you head out, jumped on limp, or made offers. Something could be killing the REI motivation. It's either A; people you surround yourself with, B; $$$/DTI/credit score, or C; unpredictable life situations. A and B you can control. These are things investors must change to break habits and start the journey.
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yThat's great feedback. Thanks a bunch Patrick!
Quote from @Patrick Drury:
@Zach Perry
Just take the plunge and buy your first rental. Your first deal is going to be your worst deal. You are not going to be able to learn everything you need to manage and operate that property efficiently till you have run into a problem that has exposed you to it and made you aware for next time. You don't know what you don't know. - New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yVery helpful. Thanks Jaron!
Quote from @Jaron Walling:
@Zach Perry Raleigh is a great market. Ask yourself this; "My last post was over 2 years ago" - What REI related things have done during this time? Time is our most important resource.
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yThanks Nate! Super helpful.
Quote from @Nate Sanow:
Hey so to reply to the subject line, the way to get over paralyses is to take action. Literally it is the only way. Anything else is just thinking. Which is fine if you need time, but if ready for change you need action.
After reading your post, I’m thinking 1. You might not know a lot of other investors in your area? If so, you should double down on your networking. This can count as part of your “action” steps I’m referring to. When young and new it is 100% okay to vicariously live through another investors success, in your case locally.
2. I am also thinking you are only looking at MLS deals? There are a lot of ways to find better performing deals than what everyone looks to the mls for. Wholesalers or learning to wholesale and get your own motivated seller list, networking with agents and landing on a rockstar agent who can help you find listings pre-market, getting entrenched in your local tax sale or foreclosure auctions, and I can keep going…
it is hard for me to believe there are NO deals in your market. Remember, great deals are not found, they are made. We all make our own luck in REI. good luck. - 3yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Zach Perry I've had two coffees this morning! Letsss gooo! 2023 is the year of opportunities even with higher rates and lower prices.
- Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes3y
@Zach Perry, I wouldn't be too hard on yourself, 22 years old is still young. That being said, the earlier you start taking action and buying properties, the quicker you'll hit financial freedom, retire, accumulate wealth, etc. What does your current position look like at the moment? Are you still in college? Employed? Assuming you're about to finish school, the most boring yet realistic advice I have for you is to obtain W2 employment asap. I'm sure you're well aware, however, most lenders are going to want to see at least two years of W2 tax returns. To be upfront, it's very difficult/nearly impossible to jump into real estate investing full-time. Ok, now assuming that you have been working for the past two years, are you pre-approved, and have you been submitting offers? While thorough analysis and underwriting are important, I see far too many newer investors being too conservative with their numbers. Furthermore, is your investment strategy to house hack the duplex? If so, you have many other house-hacking options that you need to explore. SFH-rent by the room, SFH-in-law suite that can be sourced as an STR or LTR, SFH-basement that can be converted into an additional unit, SFH with an ADU, & duplex (which seems to be your main priority) are all probably viable options in your market. Lastly, and as others have alluded to, your first deal is essentially there to get you on base, you do not need to hit a home run on your first swing. Make sense? Hope this helps!
- Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes3y
Start with locating your local experts! They can give you specific info about each neighborhood as well as some pointers on what is "normal" for your area. MY opinion is to start with a realtor. Find one with good reviews and then ask them if they have experience with investors. Ask them if they own any investment properties. Ask them what lenders, contractors, and inspectors they recommend.
I know a few brokers in Raleigh if you would like me to facilitate an introduction. Just shoot me a message!
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
go to every REIA meeting with a 2 hour radius
- Real Estate Agent · NJ · Member since 2021 · 569 posts · 127 votes3y
Go to as many live Meetup events as you can I made my best connections at these events, I still go twice a week
- Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes3y
Hey Zach,
It's tough making the numbers work in the Raleigh market. You're right... duplexes are few and far between and they are overvalued right now. Sounds like you're looking for a house hack, am I correct?
What I would do if I were in your shoes is try to be a little more flexible/creative. There are a lot of split level/split foyer type homes around Raleigh/Cary. Some need work. The floor plan usually has an entire lower level with living area, bedroom, bath, etc. Makes it pretty easy to rent out while you + maybe another roommate or two occupy the main level.
Or you could get a 2-3 bedroom townhome, occupy the primary suite and rent out the additional bedrooms.
No, it's not a duplex but it gets you over the hump of getting started, you can get owner occupied financing, and start building equity. Rinse and repeat. This is exactly how I started over a decade ago!
- Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes3y
If you're open to venturing outside of Raleigh this one looks interesting and has been on the market a while:
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yI am a recent college graduate and have been W-2 employed since I turned 16. I definitely need to test the waters and submit offers! My investment strategy is to house hack the duplex but I should look into the other strategies! Thank you for all the information and support Michael!
Quote from @Michael Dumler:
@Zach Perry, I wouldn't be too hard on yourself, 22 years old is still young. That being said, the earlier you start taking action and buying properties, the quicker you'll hit financial freedom, retire, accumulate wealth, etc. What does your current position look like at the moment? Are you still in college? Employed? Assuming you're about to finish school, the most boring yet realistic advice I have for you is to obtain W2 employment asap. I'm sure you're well aware, however, most lenders are going to want to see at least two years of W2 tax returns. To be upfront, it's very difficult/nearly impossible to jump into real estate investing full-time. Ok, now assuming that you have been working for the past two years, are you pre-approved, and have you been submitting offers? While thorough analysis and underwriting are important, I see far too many newer investors being too conservative with their numbers. Furthermore, is your investment strategy to house hack the duplex? If so, you have many other house-hacking options that you need to explore. SFH-rent by the room, SFH-in-law suite that can be sourced as an STR or LTR, SFH-basement that can be converted into an additional unit, SFH with an ADU, & duplex (which seems to be your main priority) are all probably viable options in your market. Lastly, and as others have alluded to, your first deal is essentially there to get you on base, you do not need to hit a home run on your first swing. Make sense? Hope this helps!
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yThanks for the advice and helpful information Billy!
Quote from @Billy Daniel:
Start with locating your local experts! They can give you specific info about each neighborhood as well as some pointers on what is "normal" for your area. MY opinion is to start with a realtor. Find one with good reviews and then ask them if they have experience with investors. Ask them if they own any investment properties. Ask them what lenders, contractors, and inspectors they recommend.
I know a few brokers in Raleigh if you would like me to facilitate an introduction. Just shoot me a message!
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yThanks Nicholas!
Quote from @Nicholas L.:
go to every REIA meeting with a 2 hour radius
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yThat's awesome! Thanks for the advice Richard!
Quote from @Richard Loniewski:
Go to as many live Meetup events as you can I made my best connections at these events, I still go twice a week
- New to Real Estate · Raleigh, NC · Member since 2020 · 21 posts · 16 votes3yLooking into other options is a great eye-opener. Thanks for the help Tiffany!
Quote from @Tiffany Alexy:
Hey Zach,
It's tough making the numbers work in the Raleigh market. You're right... duplexes are few and far between and they are overvalued right now. Sounds like you're looking for a house hack, am I correct?
What I would do if I were in your shoes is try to be a little more flexible/creative. There are a lot of split level/split foyer type homes around Raleigh/Cary. Some need work. The floor plan usually has an entire lower level with living area, bedroom, bath, etc. Makes it pretty easy to rent out while you + maybe another roommate or two occupy the main level.
Or you could get a 2-3 bedroom townhome, occupy the primary suite and rent out the additional bedrooms.
No, it's not a duplex but it gets you over the hump of getting started, you can get owner occupied financing, and start building equity. Rinse and repeat. This is exactly how I started over a decade ago!
- Property Manager · Raleigh, NC · Member since 2022 · 117 posts · 110 votes3y
Consider expanding your search to Durham, where there are many more duplexes. A bit more affordable than Raleigh, too. Lots of upside remains too, if you ask me.
I have been a property manager in the Triangle for about four years, so happy to answer any questions that you might have! Feel free to DM. - Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes3y
Hi Zach, I have found value investing in Cleveland, OH because it is home to Cleveland Clinic, lot of good neighborhoods, landlord friendly laws, stable appreciation and good cash flowing properties. There are also abundant opportunities for small multi family and SFH. I have been able to scale up to 12 doors in 2 years so definitely recommend this area. Feel free to reach out and we can discuss.
- 3yJay ThomasPro MemberReal Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
This can be a daunting prospect, but it's important to remember that every rental investor has had to begin somewhere. Even the most experienced investors have made mistakes in their first deal, so don't let that discourage you. It's often said that your first investment will be your worst because you'll learn the most from it. But by taking the plunge, you'll gain the knowledge and confidence to identify potential opportunities in the future.
Making that first investment can be an intimidating task, but it's important to remember that there are resources out there to help you succeed. There are numerous books, courses, and seminars available to help guide you through the process. Additionally, many experienced rental investors are willing to offer their advice and mentorship as you get your feet wet. Taking advantage of these resources will help ensure that your first rental investment is a success.
The key takeaway here is to not be afraid to take the plunge and purchase your first rental property! With the right tools, knowledge, and mentorship, you can make sure that your first investment is a successful one. Don't forget, even the most experienced investors have made mistakes in their own first deals--so don't be discouraged. With enough preparation and dedication, you can make sure that your first rental property proves to be profitable for you! Good luck on your journey into rental investing!
- Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes3y
@Zach Perry- thanks for the post 1) get formally pre approved in order to educate yourself regarding present rates / and numbers 2) to make sure you have a loan / financing in place ...without a loan - its tough to take the next step ...good luck and let me know if you would like a loan officer referal for your area
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes3y
Quote from @Zach Perry:
Hello everyone! I'm 22 years old and have been educating myself around REI for the past couple of years with books, this website, and the BiggerPockets podcast. My last post was over 2 years ago with asking about how to learn more! While everyone is always learning no matter what, I wanted to ask for any advice or helpful information regarding searching for duplex properties. Specifically in a market like Raleigh where (in my opinion) not many are available or when analyzing it, it's not worth investing in or it's too expensive when analyzing. Also I'd love for any more helpful tips on education regarding actually interacting with people aside from books and podcasts :)
Thanks everyone!
The fundamental problem, as @Tiffany Alexy pointed out and you already opined (although it is fact), is that the number of duplexes in the Raleigh market is small. In the past five years or so the duplex market has been able to command a premium. My view is that 0.2% of residential property is duplex per my analysis from several years ago. I couldn't find substantial duplex infill development recently from 434,294 Wake County records. You are looking for a needle in a haystack. One option (mentioned in other comments) is to try another market. Another is to try alternate investment asset types as Tiffany suggested.
Seems like a key point: "when analyzing it, it's not worth investing in or it's too expensive..."
My only other comment, and I will push back a little on some of the other posts, is that when you become a motivated buyer, you put yourself at a disadvantage. Real Estate is a capital-intensive business and buying just to 'do a deal', to me, can be a big mistake. I saw LOTS of 'investors' in 2005-2008 who were (or became) motivated buyers, ultimately face the harsh reality that the market isn't kind to bad financial decisions. As a courthouse buyer, I saw it first-hand. I would recommend not buying expecting to make mistakes just to learn from it. To me, this is bad logic. Investments are meant to contribute to your financial well-being, not detract. You are 22 and I would suggest you buy a primary residence first. Learn RE from taking classes, like the real estate commission teaches. Read and invest your energy in the North Carolina Real Estate for Brokers and Salesmen book that the RE commission used for their classes. Know the fundamentals. It's an investment you won't regret.
Related
my Feb 22 2018 post in Looking for multifamily duplex/fourplex
my Oct 15 2017 post in Is Raleigh a good cashflow market?
my Aug 12 2017 post in List Source Returning Small Numbers - Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
@Zach Perry house hack a 4 family ! Thank me later. Go get em!
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