First Time Investor - Charlotte NC Market Research
Member since 2022 · 17 posts · 14 votes
Hi everyone,
I am in the process of digging into the Charlotte, NC region for a buy and hold investment property, and I'm looking for someone to help point me in the right direction.
For some context, I will likely be pursuing SFH in the 200-350K range looking for primarily cash flow potential with hopefully rent growth over time and then appreciation as a secondary consideration. Using list source, I have identified zip codes with the highest amount of activity in the past year. However, many of these are not in the "better" neighborhoods of Charlotte and I'm able to find some (albeit only a few) in those neighborhoods that are in my expected price range. Obviously, some deals appear to better than others.
How should I think about balancing the high activity areas vs better neighborhoods? Should I just focus more on the individual deals rather than being in the best area?
Hey Andrew,
I actually work with Stephanie who commented above. She is a true expert in this area so I would DM her for more info. The reality is this:
1) Charlotte is a growing city regardless of what area you choose. Obviously we do not want C or D class properties because those do not pan out well longterm.
2) It's hard to get both cashflow and appreciation, and so focusing on the outer skirts of Charlotte will yield the best results for both worlds.
3) A lot of it depends on the financing too, so working with a broker who can show you options for financing will help as well.
Hope this helps!
Hey Andrew - I'm a real estate broker and property manager in Charlotte. There are plenty of opportunity pockets that I've come across and have studied for myself and for other investor clients that fit that price point. I'm obviously biased but Charlotte's a solid market to invest in. I like to focus on individual deals but keeping certain areas at the forefront of my mind.
Hey Andrew,
I actually work with Stephanie who commented above. She is a true expert in this area so I would DM her for more info. The reality is this:
1) Charlotte is a growing city regardless of what area you choose. Obviously we do not want C or D class properties because those do not pan out well longterm.
2) It's hard to get both cashflow and appreciation, and so focusing on the outer skirts of Charlotte will yield the best results for both worlds.
3) A lot of it depends on the financing too, so working with a broker who can show you options for financing will help as well.
Hope this helps!
I agree with @Jon Puente on looking in the towns on the "out skirts" of Charlotte. We do a good bit of lending for our clients in these areas and they are experiencing good rental numbers, especially with the BRRRR method. Charlotte is growing so the smaller towns/cities that used to be considered far outside of Charlotte and now becoming affordable suburbs.
@Andrew Northcutt welcome to BP forums. Charlotte is a great area to invest in. I'm an investor & real estate broker in the area, if you want to grab a coffee to talk or Zoom with me about the CLT market, I'm here for you.
Have you analyzed these deals to make sure you'd cash flow? My concern is almost all of my long term rental investors have paused because the interest rates make cash flow extremely difficult unless they put more money down or do renovations (which most out of state investors are hesitant to tackle). Just make sure you're clear on what type of property you're getting into at that price range and a true rental rate.
Hey Andrew,
I actually work with Stephanie who commented above. She is a true expert in this area so I would DM her for more info. The reality is this:
1) Charlotte is a growing city regardless of what area you choose. Obviously we do not want C or D class properties because those do not pan out well longterm.
2) It's hard to get both cashflow and appreciation, and so focusing on the outer skirts of Charlotte will yield the best results for both worlds.
3) A lot of it depends on the financing too, so working with a broker who can show you options for financing will help as well.
Hope this helps!
Hey Jon,
I appreciate the feedback here! The growth potential is one of the things that attracted me to the Charlotte area. I feel as if there's a lot of opportunity for appreciation and rental growth over time. As a result, I guess that makes it difficult to find deals that cash flow on day one.
You say focus on the outer skirts of Charlotte. Do you mean still within the city line of Charlotte or surrounding suburbs or both?
In my time doing research, it seems like most deals near the downtown area of Charlotte are not going to be feasible for cash flow. I found a few opportunities that seem promising in areas like Mount Holly, Oak Forest, Hickory Grove, and other neighborhoods similar distances to downtown Charlotte. I also just started looking at nearby suburbs like Concord and Gastonia where the monthly costs (specifically Principal & Interest, Property taxes, Home insurance) seem to be significantly lower. However, I am just not as familiar with the rental markets there yet.
In terms of financing, my plan was to get a conventional loan with 20% down since it seems the simplest option with better rate potential for my first investment property.
I agree with @Jon Puente on looking in the towns on the "out skirts" of Charlotte. We do a good bit of lending for our clients in these areas and they are experiencing good rental numbers, especially with the BRRRR method. Charlotte is growing so the smaller towns/cities that used to be considered far outside of Charlotte and now becoming affordable suburbs.
I have definitely considered the BRRRR method and it seems like it would work well in Charlotte, but I figured that might be a little too complex for a first time investment. My thought process was to get started with a simple buy and hold to get some experience under my belt first and then potentially switching to BRRRR to help scale.
What are some of the smaller towns and cities you referenced? Would those be the Gastonia and Concord type areas or something else entirely?
I agree with @Jon Puente on looking in the towns on the "out skirts" of Charlotte. We do a good bit of lending for our clients in these areas and they are experiencing good rental numbers, especially with the BRRRR method. Charlotte is growing so the smaller towns/cities that used to be considered far outside of Charlotte and now becoming affordable suburbs.
I have definitely considered the BRRRR method and it seems like it would work well in Charlotte, but I figured that might be a little too complex for a first time investment. My thought process was to get started with a simple buy and hold to get some experience under my belt first and then potentially switching to BRRRR to help scale.
What are some of the smaller towns and cities you referenced? Would those be the Gastonia and Concord type areas or something else entirely?
Gastonia, Concord, Belmont, Dallas, Mt. Holly, Kannapolis, Salisbury, Denver, Monroe are some areas where our clients are doing well with rentals and flips. If you push even farther north, Hickory is pretty solid and growing. Shelby NC is nice too. I'm sure I left out several others but those were just the ones that I thought of quickly.
Have you analyzed these deals to make sure you'd cash flow? My concern is almost all of my long term rental investors have paused because the interest rates make cash flow extremely difficult unless they put more money down or do renovations (which most out of state investors are hesitant to tackle). Just make sure you're clear on what type of property you're getting into at that price range and a true rental rate.
Thanks for the advice here!
As I just mentioned in my recent reply, anything immediately near downtown Charlotte doesn't seem feasible for the reasons you mentioned. I have seen some deals toward the outskirts of the city that could seem promising but those are far and few and do not have enough knowledge of the rental markets yet to confidently say those can be good deals or not. I'm having the best luck finding lower monthly costing deals in the suburbs based on only a couple days of looking at these areas but again not super knowledgeable on the rental markets there yet either.
Is there any resource for rent estimates specific to Charlotte that I should know other than the usual Rentometer, Redfin, Zillow, etc?
I am realizing that cash flow is likely to be pretty tight the first couple of years, which I am okay with because I believe the appreciation and rental growth will grow the cash flow overtime. Also, this is my first investment property so I am not expecting any homeruns, just learning experiences for my next few.
I agree with @Jon Puente on looking in the towns on the "out skirts" of Charlotte. We do a good bit of lending for our clients in these areas and they are experiencing good rental numbers, especially with the BRRRR method. Charlotte is growing so the smaller towns/cities that used to be considered far outside of Charlotte and now becoming affordable suburbs.
I have definitely considered the BRRRR method and it seems like it would work well in Charlotte, but I figured that might be a little too complex for a first time investment. My thought process was to get started with a simple buy and hold to get some experience under my belt first and then potentially switching to BRRRR to help scale.
What are some of the smaller towns and cities you referenced? Would those be the Gastonia and Concord type areas or something else entirely?
Gastonia, Concord, Belmont, Dallas, Mt. Holly, Kannapolis, Salisbury, Denver, Monroe are some areas where our clients are doing well with rentals and flips. If you push even farther north, Hickory is pretty solid and growing. Shelby NC is nice too. I'm sure I left out several others but those were just the ones that I thought of quickly.
Thanks for the recommendations! I will check out those areas to learn more.
My main reason in pointing that out is because all the move in ready/turnkey properties, even in outlying suburbs such as Mt Holly, Monroe, etc do tend to not work with rental rates to cash flow. Properties that need some work can be doable, but not sure what type of property you're looking for.
Gastonia can be very tricky on what is a B neighborhood and what is a D neighborhood. Mt Holly, Denver, Monroe and Kannapolis are areas I'm steering my clients towards.
I have a rental report that I could send you based on MLS data. It looks at what areas are appreciating, supply of rentals, etc. There's no one source for rental data, unfortunately. Zillow, rentometer and the MLS are the sources I use.
My main reason in pointing that out is because all the move in ready/turnkey properties, even in outlying suburbs such as Mt Holly, Monroe, etc do tend to not work with rental rates to cash flow. Properties that need some work can be doable, but not sure what type of property you're looking for.
Gastonia can be very tricky on what is a B neighborhood and what is a D neighborhood. Mt Holly, Denver, Monroe and Kannapolis are areas I'm steering my clients towards.
I have a rental report that I could send you based on MLS data. It looks at what areas are appreciating, supply of rentals, etc. There's no one source for rental data, unfortunately. Zillow, rentometer and the MLS are the sources I use.
I completely understand. Turnkey properties would be ideal and I'm open to cosmetic work but I am not pursuing a BRRRR strategy or anything similar at the moment. I've mostly been looking at 2-4 bedroom SFH that I would probably classify as B neighborhoods and properties, not typically the newer and nicest places since the numbers don't tend to make sense but not the poor condition properties that need a lot of work. Plus, that tends to make up most of my price range anyways.
Thanks for the insight into Gastonia. It seems like it is an area that definitely warrants further research as well as your other suggest areas.
I would gladly look at the rental report. I'm willing to accept all the info and help I can get!
As I continue to look and become more educated in these markets, I am finding it challenging to find cash flowing SFH. Would it be worth it to expand my search to small multi-family (1-6 units)? Are these types of properties as common in these markets?