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Zachary Brown
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  • Cary, NC
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Opportunities in Raleigh NC Area - What to do

Zachary Brown
  • New to Real Estate
  • Cary, NC
Posted Jan 23 2023, 09:07

First let me say that I've only been on the site for a week or two and I'm already getting access to such great information and networking that it's easy to see the value provided here and I'm so grateful for all of the help and advice I've received so far! Some of the folks who have been very helpful so far, Chris Webb, Cory Thornton, Brian Madden, Michelle Winters, and others! 

I'm still researching and learning about this market here in the Raleigh NC Area, however, based on what I've learned so far, I'm thinking I need to invest my money (around $150k capital) into turnkey rental opportunities, preferably townhomes as they involve little headache. My reasoning for this is that after researching further into BRRR, I think that it's not realistic for me due to the time commitment required. I'm a full time lawyer and diving into BRRR properties seems like it will take too much time. I'm also thinking this is more of a play for an experienced investor who knows what they are looking for in a property, has good connections, etc. More traditional investing in properties ready to rent seems like it poses lower risk and allows me to learn while investing in the market. As I gain more experience, maybe I can consider BRRR opportunities in the future. I do understand that this strategy will mean lower returns as well.

After talking to a few realtors, I've been told that there are rental opportunities out there in this market, however, due to high interest rates, it's difficult to hit the 1% rule for these properties and .08% is more likely. This would likely result in negative cash flow, which is a red flag, however, some argue that is a temporary problem which will be solved within 2 years when interest rates come back down. If that's the case, then getting in now and realizing the appreciation over the next 2 years may still make sense even if I have to lose around $5k in negative cash flow during that time. The alternative I suppose would be to wait like other investors for those interest rates to fall, however, again I'm losing that appreciation potential if I do that. The Raleigh area is a unique market in that it has very high valuations and has for years. The area is growing rapidly with new companies announcing development here like Apple, Amazon and Google. While the market is strong right now, I think the growth suggests appreciation will continue rather than fall, however, I appreciate thoughts from others. 

As a new investor, I'm not sure of the right path forward here and would appreciate any advice you seasoned pros have to offer on this situation. 

My biggest fear at this point: Buying at the top of the market and only seeing losses (I've run into this in the stock market and crypto, so trying to avoid the trifecta here) 

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Benjamin Carver
  • Real Estate Broker
  • Raleigh, NC
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Benjamin Carver
  • Real Estate Broker
  • Raleigh, NC
Replied Jan 23 2023, 12:29

Gain of salt here please, but this market is BOOMING. So much growth and it's not stopping. Look at the masses and companies flooding in. Long-term is the name of the game with real estate and the Triad will almost certainly see growth in that span. Good for you for being wise and trying to not just jump into a bad decision. Just make sure you don't overanalyze yourself out of an opportunity to get started either. I've done that myself in DFW and regretted it. Find an agent you trust in your area and find a solution with them that you're confident will make sense 5-10 years from now. And then if the numbers work, that's all you need to worry about. Best of luck!

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Zachary Brown
  • New to Real Estate
  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 23 2023, 12:31
Quote from @Benjamin Carver:

Gain of salt here please, but this market is BOOMING. So much growth and it's not stopping. Look at the masses and companies flooding in. Long-term is the name of the game with real estate and the Triad will almost certainly see growth in that span. Good for you for being wise and trying to not just jump into a bad decision. Just make sure you don't overanalyze yourself out of an opportunity to get started either. I've done that myself in DFW and regretted it. Find an agent you trust in your area and find a solution with them that you're confident will make sense 5-10 years from now. And then if the numbers work, that's all you need to worry about. Best of luck!


 Thanks Ben appreciate the advice! That is exactly what I'm doing right now, just learning from my agent and soaking in all of the information about the market I can before I pull the trigger. That is my other fear, which is the opposite of the one I stated above. I'm also afraid that I'll miss the opportunity while waiting for the optimal buying environment. Always a fun place to be! Anyway, thanks again for the quick thoughts! 

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Chris Martin
  • Investor
  • Willow Spring, NC
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Chris Martin
  • Investor
  • Willow Spring, NC
Replied Jan 23 2023, 14:48

This post is meant to be constructive. I spent my career buying at the courthouse steps. Not directed at the OP, but I am seeing what Greenspan called the stock market equivalent of 'irrational exuberance' in the REI space.

I knew (and know) many investors who were financially wiped out in 2009-2011. They overpaid with leverage in 2006-2007 and when the market turned and rents dropped, they were underwater with negative cash flow. Remember strategic default? Take a look at the first chart below. Compare the 2006-2008 "bubble" to today's market. Regarding "getting in now and realizing the appreciation over the next 2 years may still make sense even if I have to lose around $5k in negative cash flow during that time," I see that as speculative at best. I would be surprised if prices remain at current levels in the next two to five years. The consensus is that we are in or about to enter a recession. I'd contend that we are in a recession now. See the second chart. The old school definition of two contracting quarters fits the 2022 US GDP. Adding to risk/uncertainty, just look at the mass layoffs in tech (not Apple so far, Amazon (18,000), Google (12,000)) that are mounting and expected to continue through 2023. 

This isn't 2008. But chasing negative cash flow property at retail (that's what 'turnkey' buying is), at or near the top of an overheated market, with relatively high interest rates, potentially a looming recession, and no more institutional iBuyers (they have effectively left the market) in the wings to bail out retail sellers, ... all this adds up to a lot of risk. Personally, I like lower risk investments not higher risk investments. 2002-2004 in the aftermath of the tech recession(*), now that was a great opportunity. 2010-2012 was another good opportunity. Now? I'd say no. 

If you do buy, I hope you do well. 

(*) IBM, Nortel, Alcatel, and a lot more companies shed many tens of thousands of jobs. 

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Zachary Brown
  • New to Real Estate
  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 23 2023, 15:35
Quote from @Chris Martin:

This post is meant to be constructive. I spent my career buying at the courthouse steps. Not directed at the OP, but I am seeing what Greenspan called the stock market equivalent of 'irrational exuberance' in the REI space.

I knew (and know) many investors who were financially wiped out in 2009-2011. They overpaid with leverage in 2006-2007 and when the market turned and rents dropped, they were underwater with negative cash flow. Remember strategic default? Take a look at the first chart below. Compare the 2006-2008 "bubble" to today's market. Regarding "getting in now and realizing the appreciation over the next 2 years may still make sense even if I have to lose around $5k in negative cash flow during that time," I see that as speculative at best. I would be surprised if prices remain at current levels in the next two to five years. The consensus is that we are in or about to enter a recession. I'd contend that we are in a recession now. See the second chart. The old school definition of two contracting quarters fits the 2022 US GDP. Adding to risk/uncertainty, just look at the mass layoffs in tech (not Apple so far, Amazon (18,000), Google (12,000)) that are mounting and expected to continue through 2023. 

This isn't 2008. But chasing negative cash flow property at retail (that's what 'turnkey' buying is), at or near the top of an overheated market, with relatively high interest rates, potentially a looming recession, and no more institutional iBuyers (they have effectively left the market) in the wings to bail out retail sellers, ... all this adds up to a lot of risk. Personally, I like lower risk investments not higher risk investments. 2002-2004 in the aftermath of the tech recession(*), now that was a great opportunity. 2010-2012 was another good opportunity. Now? I'd say no. 

If you do buy, I hope you do well. 

(*) IBM, Nortel, Alcatel, and a lot more companies shed many tens of thousands of jobs. 


 Thanks! This is exactly the dialogue I was hoping to spin up! See some pros and cons! I tend to agree with everything you’ve said. I’m not enthused about going into the market now. Was hoping someone would convince me otherwise! Will still keep my eyes open for opportunities though! 

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Kelly Ruta
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  • New to Real Estate
  • Wake Forest NC
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Kelly Ruta
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  • New to Real Estate
  • Wake Forest NC
Replied Jan 23 2023, 16:40

Im right there with you! Everything I have analyzed produces negative cash flow.  I do think with a little patience we will be able to find more opportunities as Google, Amazon, and Apple move here.

Im wondering with how much RTP is booming if some sort of corporate housing investment is a good strategy?

Wishing you all the best 

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Greg Bensley
  • Real Estate Broker
  • Raleigh, NC
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Greg Bensley
  • Real Estate Broker
  • Raleigh, NC
Replied Jan 24 2023, 06:44

Zach,

Interest rates are already beginning to slowly decrease and inflation is stabilizing. I think within the next few months or so you will be able to jump into the Raleigh market with a head of steam. The only problem with the Raleigh area is that many of the opportunities are distressed properties that need significant rehab before they can be rented out. I would suggest looking into the surrounding areas where you can find good rental properties at a lower price point (making entry into these markets that much easier). Fayetteville has been a great area for rentals although it is a bit far from Raleigh. I've come across some turnkey rentals myself in the Wilson area as well. You're going to have to broaden your target markets. I understand that you're a full time lawyer as well which makes it tough to keep up with rehab and maintenance. I can get you contractors, property managers, etc that can worry about this for you. If you'd be interested in discussing these opportunities more, my door is always open and I'd love to help you enter these markets and begin to realize some cash flow opportunities are still out there.

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Zachary Brown
  • New to Real Estate
  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 24 2023, 07:12

Thanks Greg and Kelly! Great to see all the feedback. 

Kelly - Corporate housing investment makes a lot of sense as we continue to see big companies coming to the triangle and they have to live somewhere! I've heard that out of state investors are just buying up RTP property because they heard Apple was coming. That's certainly responsible for some of the valuation inflation happening. 

Greg - I totally agree with you around targeting broader markets. I find it very unlikely that I'll find a property in the Raleigh/Cary area and so I am looking at the surrounding areas like Knightdale, Wake Forest, Garner, Clayton, Fuquay-Varina, and so on. You also hit the nail on the head with access to the right connections (contractors, PMs, etc.). That is the roadblock I see with BRRR right now, as well as my lack of experience. I appreciate your offer to connect. I'm still researching and preparing to be ready to purchase when the right opportunity comes along, but I'll certainly take you up on that when I get there. Thanks!

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Kelly Ruta
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  • Wake Forest NC
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Kelly Ruta
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  • New to Real Estate
  • Wake Forest NC
Replied Jan 24 2023, 07:53
Quote from @Zachary Brown:

Thanks Greg and Kelly! Great to see all the feedback. 

Kelly - Corporate housing investment makes a lot of sense as we continue to see big companies coming to the triangle and they have to live somewhere! I've heard that out of state investors are just buying up RTP property because they heard Apple was coming. That's certainly responsible for some of the valuation inflation happening. 

Greg - I totally agree with you around targeting broader markets. I find it very unlikely that I'll find a property in the Raleigh/Cary area and so I am looking at the surrounding areas like Knightdale, Wake Forest, Garner, Clayton, Fuquay-Varina, and so on. You also hit the nail on the head with access to the right connections (contractors, PMs, etc.). That is the roadblock I see with BRRR right now, as well as my lack of experience. I appreciate your offer to connect. I'm still researching and preparing to be ready to purchase when the right opportunity comes along, but I'll certainly take you up on that when I get there. Thanks!


 Great reply!  I live in Wake Forest and it is literally EXPLODING with condos and homes.  Just an FYI.  The road infrastructure is NOT set up to handle this building explosion nor are the schools prepared for the new influx.  Just something to consider.

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Dan Rowley
  • Investor
  • Cary, NC
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Dan Rowley
  • Investor
  • Cary, NC
Replied Jan 24 2023, 08:15
If you're looking for 'deals' or properties at distressed or fire sale prices you won't find them in Raleigh metros.  If you're playing the long game then I'd wait longer.  

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Zachary Brown
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  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 24 2023, 08:20
Quote from @Dan Rowley:
If you're looking for 'deals' or properties at distressed or fire sale prices you won't find them in Raleigh metros.  If you're playing the long game then I'd wait longer.  

 Thanks Dan. Great to see feedback from so many angles. Much appreciated. 

At first I thought I was looking for distressed properties, but after more research I think buying one of those would be a mistake for me, at least at the outset. Now I'm looking more at the long game LTRs. Find a couple SFH's or townhomes in the surrounding communities that are far enough on the fringe that I can maybe get positive cash flow and still have some reasonable confidence in appreciation over the long run. Will see where it goes.

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Kai Kopsch
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  • Real Estate Broker
  • Charlotte, NC
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Kai Kopsch
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  • Real Estate Broker
  • Charlotte, NC
Replied Jan 24 2023, 08:26

The good news moving forward is that the housing market in Charlotte and Raleigh is cooling off, which means there will be less pressure on home buyers to put in an offer immediately. I helped a BP member a week ago to close a home in Charlotte that can be described "as the deal of the century"! There more deals out in this market shift. The fundamentals in Charlotte and Raleigh strong, meaning job growth continues to be robust, people continue to move here, and the cost of living is relatively low. We only have 1.6 months of inventory in CLT;a stable market is six months.

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Pat Lulewicz
  • Realtor
  • Raleigh NC and Greensboro, NC
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Pat Lulewicz
  • Realtor
  • Raleigh NC and Greensboro, NC
Replied Jan 24 2023, 09:46

I'm not a big proponent of the negative cash flow game for Y1 and waiting for it to go up in the future. There is so much development going on, its not necessarily a given that rent will go up with it. I've seen a nice stagnation of rent growth here recently (granted it is the winter) over the last 3-4 months in SFH products. BRRR properties have historically been better finds in older, no HOA communities in NE Raleigh, S Raleigh/Garner, and Durham. This also gives you multiple renting strategies - LTR, MTR and STR.

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Zachary Brown
  • New to Real Estate
  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 24 2023, 09:50
Quote from @Pat Lulewicz:

I'm not a big proponent of the negative cash flow game for Y1 and waiting for it to go up in the future. There is so much development going on, its not necessarily a given that rent will go up with it. I've seen a nice stagnation of rent growth here recently (granted it is the winter) over the last 3-4 months in SFH products. BRRR properties have historically been better finds in older, no HOA communities in NE Raleigh, S Raleigh/Garner, and Durham. This also gives you multiple renting strategies - LTR, MTR and STR.


 Thanks Pat, that makes a lot of sense. I agree, negative cash flow, definitely is a red flag as a starter. I agree with the stagnation (not that I'm an expert in that area, far from it). Will be curious to see what the next year brings. I'm very torn as I want to get invested, but am looking at a market with potential to go in many different directions, although I suppose that's always true. What I'm seeing now is that this is a strong highly valued market and getting in with a positive cash flow property will be challenging. Appreciate your feedback on this topic! 

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Zachary Brown
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  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 24 2023, 09:53
Quote from @Kai Kopsch:

The good news moving forward is that the housing market in Charlotte and Raleigh is cooling off, which means there will be less pressure on home buyers to put in an offer immediately. I helped a BP member a week ago to close a home in Charlotte that can be described "as the deal of the century"! There more deals out in this market shift. The fundamentals in Charlotte and Raleigh strong, meaning job growth continues to be robust, people continue to move here, and the cost of living is relatively low. We only have 1.6 months of inventory in CLT;a stable market is six months.


 Kai that is very interesting as I've been told Charlotte is the hottest market in the entire country right now. Great to see that there are still unicorn deals like that, but surprising. It's certainly an interesting market as out of state investors see it as very affordable and invest regularly whereas in-state investors have some pause as we don't compare against the more highly valued markets (NY, SF, CA). Appreciate your feedback! 

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Phillip Bradrick
  • Property Manager
  • Wake Forest, NC
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Phillip Bradrick
  • Property Manager
  • Wake Forest, NC
Replied Jan 25 2023, 06:36

Hey @Zachary Brown, You've gotten a lot of good feedback and there are obviously many perspectives on when and how to jump in.  Finding on market, turnkey properties that cashflow is very unlikely to find unless you go to outskirt markets.  I would recommend possibly building a relationship with a investor / contractor that you could do some creative partnership with.  If you can find someone with hustle and construction knowledge they may be able to help you take down a distressed property allowing you to create cashflow and increase equity significantly.  In the peak of the market, the amount of off market properties were very few.   In the past few months, I have seen a significant uptick in off market properties crossing my desk.

I agree with @Kai Kopsch if you show some patience and work both on and off market properties you can find deals it just takes time.  Also, I am an RE agent and I know if you are working with one that sometimes the amount of effort to find a good deal, especially an off-market deal just isn't worth the commission.  I would chat with your agent and see how you could feed him possible leads on deals and help find that perfect investment.

I'd also come up with the minimum cashflow/ equity you are willing to take and stick to your guns until you find a deal.  I bought a duplex in the peak of the market last year for 25K under the asking price.  I was shocked by it myself but they had so over played the marketing that the many investors that looked at it all walked away thinking it would go for over asking price and we were able to scoop it up at a great discount.  Those deals are few and far between but with a good cash position like you have, I think there is more opportunity now than there was for the past few years.  

I hope this is helpful as you think through your next move.

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Zachary Brown
  • New to Real Estate
  • Cary, NC
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Zachary Brown
  • New to Real Estate
  • Cary, NC
Replied Jan 25 2023, 06:43
Quote from @Phillip Bradrick:

Hey @Zachary Brown, You've gotten a lot of good feedback and there are obviously many perspectives on when and how to jump in.  Finding on market, turnkey properties that cashflow is very unlikely to find unless you go to outskirt markets.  I would recommend possibly building a relationship with a investor / contractor that you could do some creative partnership with.  If you can find someone with hustle and construction knowledge they may be able to help you take down a distressed property allowing you to create cashflow and increase equity significantly.  In the peak of the market, the amount of off market properties were very few.   In the past few months, I have seen a significant uptick in off market properties crossing my desk.

I agree with @Kai Kopsch if you show some patience and work both on and off market properties you can find deals it just takes time.  Also, I am an RE agent and I know if you are working with one that sometimes the amount of effort to find a good deal, especially an off-market deal just isn't worth the commission.  I would chat with your agent and see how you could feed him possible leads on deals and help find that perfect investment.

I'd also come up with the minimum cashflow/ equity you are willing to take and stick to your guns until you find a deal.  I bought a duplex in the peak of the market last year for 25K under the asking price.  I was shocked by it myself but they had so over played the marketing that the many investors that looked at it all walked away thinking it would go for over asking price and we were able to scoop it up at a great discount.  Those deals are few and far between but with a good cash position like you have, I think there is more opportunity now than there was for the past few years.  

I hope this is helpful as you think through your next move.


 Thanks Phillip this is very helpful. I have gotten connected with some wholesalers and am on their mailing lists now for off-market properties, so I'll keep an eye on those to see if the right opportunity pops up. I agree, it seems in this market having the right connections is critical as a good contractor could alleviate many of my concerns in buying a distressed property. For now, I'm going to focus on continuing to build my network and find the right combination for a solid investment. Thanks for the feedback, much appreciated and great to connect! :) 

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Replied Feb 1 2024, 09:47
Quote from @Zachary Brown:
Quote from @Phillip Bradrick:

Hey @Zachary Brown, You've gotten a lot of good feedback and there are obviously many perspectives on when and how to jump in.  Finding on market, turnkey properties that cashflow is very unlikely to find unless you go to outskirt markets.  I would recommend possibly building a relationship with a investor / contractor that you could do some creative partnership with.  If you can find someone with hustle and construction knowledge they may be able to help you take down a distressed property allowing you to create cashflow and increase equity significantly.  In the peak of the market, the amount of off market properties were very few.   In the past few months, I have seen a significant uptick in off market properties crossing my desk.

I agree with @Kai Kopsch if you show some patience and work both on and off market properties you can find deals it just takes time.  Also, I am an RE agent and I know if you are working with one that sometimes the amount of effort to find a good deal, especially an off-market deal just isn't worth the commission.  I would chat with your agent and see how you could feed him possible leads on deals and help find that perfect investment.

I'd also come up with the minimum cashflow/ equity you are willing to take and stick to your guns until you find a deal.  I bought a duplex in the peak of the market last year for 25K under the asking price.  I was shocked by it myself but they had so over played the marketing that the many investors that looked at it all walked away thinking it would go for over asking price and we were able to scoop it up at a great discount.  Those deals are few and far between but with a good cash position like you have, I think there is more opportunity now than there was for the past few years.  

I hope this is helpful as you think through your next move.


 Thanks Phillip this is very helpful. I have gotten connected with some wholesalers and am on their mailing lists now for off-market properties, so I'll keep an eye on those to see if the right opportunity pops up. I agree, it seems in this market having the right connections is critical as a good contractor could alleviate many of my concerns in buying a distressed property. For now, I'm going to focus on continuing to build my network and find the right combination for a solid investment. Thanks for the feedback, much appreciated and great to connect! :) 


 Hi Zach, 

Your thread created so much great info.  

Where do you go to get the off market listings?

Thanks.