Getting Out of Paralysis and Searching for a Property
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!
I would walk up to the edge but didn’t actually take the plunge until somebody pushed me
Hey Zach,
I'm a local investor in Raleigh as well. I would recommend joining NC Real Estate Investors Association, linked below. They put on a number of events and meetups throughout the month, I go to a number of these myself and are a great networking opportunity. There's also a lot of facebook groups regarding Raleigh & NC RE investing and offmarket properties. Feel free to shoot me a message and I can send some of those over.
Regarding duplexes you're right, they're few and far between and the ones that do get listed will demand a premium and likely not make a good first time investment property. If you're purely focused on duplexes I would broaden your search to Garner, Knightdale, Durham, Zebulon etc. Even if you go the off market route for duplexes in Raleigh, most owners aren't dumb they know the market, it will still be very tough to find a decent deal on a duplex in Raleigh.
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No one will get you out of paralysis other than yourself. If I were you I wouldn't admit it again, tell everyone you're a real estate investor then ask the question. Plant it in your head. You can find duplexes by setting up a simple search on zillow of multifamily
Take action, example, if any down payment money that you may fear to lose for making wrong decisions, do just that. (suggest if 22yrs old, single go for SFH, and house hack it, year 2 go to the next)
The secret sauce is go do what you fear not to do. You will see the bigger picture in few months or years down the line, and when you do you will still realize oh snap! glad I did those mistakes and still have time for profitable decisions moving forward.
Action! Move! Get going! Just do it! Yesterday you said tomorrow! and tomorrow is Today!!!!
Quote from @Brandon Vanderford:Thanks Brandon!
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.
Quote from @Jay Thomas:Very insightful. Thanks Jay!
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!
Quote from @Dave Skow:Thanks for the help Dave!
@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
Quote from @Chris Martin:Super thoughtful Chris. Obviously some mistakes will be made and that's part of the journey. But I agree that I want a RE investment to contribute to my financial situation, not push it in the opposite direction. That's why while I admit that I haven't truly taken action, I want to be well educated and patient to pursue an investment. Thanks so much!
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
Quote from @Bud Gaffney:Thanks for the suggestion Bud!
@Zach Perry house hack a 4 family ! Thank me later. Go get em!
Quote from @Michael P.:
I would walk up to the edge but didn’t actually take the plunge until somebody pushed me
Sometimes it does take that extra push. Thanks for the insight Michael!
Quote from @Chad Gray:
Hey Zach,
I'm a local investor in Raleigh as well. I would recommend joining NC Real Estate Investors Association, linked below. They put on a number of events and meetups throughout the month, I go to a number of these myself and are a great networking opportunity. There's also a lot of facebook groups regarding Raleigh & NC RE investing and offmarket properties. Feel free to shoot me a message and I can send some of those over.
Regarding duplexes you're right, they're few and far between and the ones that do get listed will demand a premium and likely not make a good first time investment property. If you're purely focused on duplexes I would broaden your search to Garner, Knightdale, Durham, Zebulon etc. Even if you go the off market route for duplexes in Raleigh, most owners aren't dumb they know the market, it will still be very tough to find a decent deal on a duplex in Raleigh.
This is super helpful Chad. Looks like an amazing association that I'll definitely look into joining. Also thanks for the insight regarding the duplex market!
Quote from @Eliott Elias:
No one will get you out of paralysis other than yourself. If I were you I wouldn't admit it again, tell everyone you're a real estate investor then ask the question. Plant it in your head. You can find duplexes by setting up a simple search on zillow of multifamily
Thanks for the advice Eliott!
Quote from @Joshuam R.:Awesome advice! Thanks Joshuam!
Take action, example, if any down payment money that you may fear to lose for making wrong decisions, do just that. (suggest if 22yrs old, single go for SFH, and house hack it, year 2 go to the next)
The secret sauce is go do what you fear not to do. You will see the bigger picture in few months or years down the line, and when you do you will still realize oh snap! glad I did those mistakes and still have time for profitable decisions moving forward.
Action! Move! Get going! Just do it! Yesterday you said tomorrow! and tomorrow is Today!!!!
Hi Zach! I am 23 and bought my first property at 22. Starting at real estate at this age is life changing so I commend you for wanting to take the leap. If I were you I would expand your horizons to look at things other than a duplex. Ask yourself what you like about a duplex. I imagine you like that you can house hack it and live in one unit while renting out the other. The good news is that there are so many other ways to house hack. Look at single family homes where you can maximize the number of bedrooms/purchase price and rent out each room individually to young professionals or grad students in your area. Look for properties with a basement you can finish for extra rooms or somewhere that an ADU can be built, or a garage that can be converted into an ADU. Maybe you do an STR/house hack to provide enough cash flow to make the deal work. There are always deals to be made, you just might need to get creative! Feel free to reach out if you have any additional questions.
Quote from @Aj Parikh:
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.
Hi AJ,
I am a newbie looking to get my first investment OOS and hunting for deals right now in Cleveland. That is a nice portfolio you built in those 2 years. Is the cash flow from that kind of portfolio in that market one that you can live comfortably off of? I am looking to aggressively buy in Cleveland and Columbus.
Quote from @Joshuam R.:
Take action, example, if any down payment money that you may fear to lose for making wrong decisions, do just that. (suggest if 22yrs old, single go for SFH, and house hack it, year 2 go to the next)
The secret sauce is go do what you fear not to do. You will see the bigger picture in few months or years down the line, and when you do you will still realize oh snap! glad I did those mistakes and still have time for profitable decisions moving forward.
Action! Move! Get going! Just do it! Yesterday you said tomorrow! and tomorrow is Today!!!!
Agreed, definitely a fan of researching things, preparing etc. But taking action is also vital. Buying a SFH and house hacking it is extremely informative, and if it doesn't work out, then hey, you have a place to live at least. I house hacked my first purchase (rented out a bonus room), and now I'm moving on to the next SFH soon. There's no substitute for getting started, you'll learn a ton. Just make sure to have a rainy day fund. Also run your purchases and strategy as a business (you should have criteria, a plan, mentors, etc.). Build your team, and all that good stuff. On my profile, I have listed a variety of books and resources I use and read, some of those are probably for free at your local library. There's also invaluable resources and expertise on Bigger Pockets too. SCORE is also free too, and a superb resource: https://www.score.org/find-men....
Quote from @Jacob St. Martin:
Hi Zach! I am 23 and bought my first property at 22. Starting at real estate at this age is life changing so I commend you for wanting to take the leap. If I were you I would expand your horizons to look at things other than a duplex. Ask yourself what you like about a duplex. I imagine you like that you can house hack it and live in one unit while renting out the other. The good news is that there are so many other ways to house hack. Look at single family homes where you can maximize the number of bedrooms/purchase price and rent out each room individually to young professionals or grad students in your area. Look for properties with a basement you can finish for extra rooms or somewhere that an ADU can be built, or a garage that can be converted into an ADU. Maybe you do an STR/house hack to provide enough cash flow to make the deal work. There are always deals to be made, you just might need to get creative! Feel free to reach out if you have any additional questions.
I've now been looking at properties with ADU potential that are much less expensive than any duplexes in the Raleigh market. It's broadened my horizons tremendously! Thanks for the advice and support Jacob!
Quote from @Account Closed:Skipper, I most definitely like the SFH opportunities. That is very true that worst case scenario is that I have somewhere to live if the house hack doesn't work. Appreciate the advice!
Quote from @Joshuam R.:
Take action, example, if any down payment money that you may fear to lose for making wrong decisions, do just that. (suggest if 22yrs old, single go for SFH, and house hack it, year 2 go to the next)
The secret sauce is go do what you fear not to do. You will see the bigger picture in few months or years down the line, and when you do you will still realize oh snap! glad I did those mistakes and still have time for profitable decisions moving forward.
Action! Move! Get going! Just do it! Yesterday you said tomorrow! and tomorrow is Today!!!!
Agreed, definitely a fan of researching things, preparing etc. But taking action is also vital. Buying a SFH and house hacking it is extremely informative, and if it doesn't work out, then hey, you have a place to live at least. I house hacked my first purchase (rented out a bonus room), and now I'm moving on to the next SFH soon. There's no substitute for getting started, you'll learn a ton. Just make sure to have a rainy day fund. Also run your purchases and strategy as a business (you should have criteria, a plan, mentors, etc.). Build your team, and all that good stuff. On my profile, I have listed a variety of books and resources I use and read, some of those are probably for free at your local library. There's also invaluable resources and expertise on Bigger Pockets too. SCORE is also free too, and a superb resource: https://www.score.org/find-men....
Quote from @Zach Perry:
Quote from @Jacob St. Martin:
Hi Zach! I am 23 and bought my first property at 22. Starting at real estate at this age is life changing so I commend you for wanting to take the leap. If I were you I would expand your horizons to look at things other than a duplex. Ask yourself what you like about a duplex. I imagine you like that you can house hack it and live in one unit while renting out the other. The good news is that there are so many other ways to house hack. Look at single family homes where you can maximize the number of bedrooms/purchase price and rent out each room individually to young professionals or grad students in your area. Look for properties with a basement you can finish for extra rooms or somewhere that an ADU can be built, or a garage that can be converted into an ADU. Maybe you do an STR/house hack to provide enough cash flow to make the deal work. There are always deals to be made, you just might need to get creative! Feel free to reach out if you have any additional questions.
I've now been looking at properties with ADU potential that are much less expensive than any duplexes in the Raleigh market. It's broadened my horizons tremendously! Thanks for the advice and support Jacob!
How do you determine which properties have ADU potential? What do you look for or who do you contact?
@Zach Perry - You have already received a ton of good advice, so I will try not to be too repetitive...or redundant...or say something that has already been said.
What I put below is not in any way prescriptive, but maybe it will help you think critically and creatively as you take steps towards being a real estate investor.
- You're a young dude. You should have less responsibility at this point in your life, which means you should have less people expecting time from you. Everything in life has trade offs. If you want balance in life, then work 40 hours and kick back. If you want to get ahead, then spend 80 hours a week generating income, or creating deals. The more you make, the more opportunities you will have or at least the less likely the chance is that a good deal passes you by because you didn't have the funds.
- Look at the people in your life. How many of them run a successful business and/or own rental property? My goal is to continually push myself into rooms where everyone in there operates at a level way beyond my current reach. Taking this approach will put you in rooms where you can learn and where you will find opportunities.
- Create deals. Does anyone in your family or friend circle have rental houses? Call them and ask if they would sell their worst property to you to help you get started. If you see a run down property, find out who owns it, and go knock on their door. There are very few deals by the time something hits the MLS. If you want a deal, try and find it off market.
- If you are working a job, and not on a clear career path, then consider finding a job somehow attached to the real estate industry and use that job to start building relationships while gaining valuable experience.
If you ever venture over to Franklin County, feel free to give me a shout. Keep us all posted on your investing/learning journey.
Best of luck!
