I'm looking to buy my first property in Charlotte NC, the market here is so hot that a lot of multi-family properties are getting scooped up for way better offers than I can offer. A lot of MFH are going for 500k+ in my area plus most of them are not accepting FHA loans, they're wanting conventional 15-25%. Is buying my first property as a SFH going to slow down my time-line to financial freedom? I'm trying to go into Airbnb afterwards to build up hopeful cashflow in the future.
Currently working a 9-5 and hoping to quit that in possibly 2-3 years so I can spend time with my girlfriend and travel. Can anyone provide some advice or guidance because I feel like a lot of people have gone through this predicament and could tell me what they have learned.
Yes that's understandable. I work downtown so it will be a drive for me as well. But we would only have to do it for a year before you can move out and rent the entire place, then you can find something closer. By then hopefully you saved enough cash to buy another one, or have enough funds for 20-25% in Charlotte.
I'm in the same boat as you. Multifamily prices are crazy high right now in Charlotte. I'm looking more o the outer areas of Charlotte like kannapolis, Salisbury, Gastonia area for multifamily.
@Jacques Ikolo I feel that, unfortunately those places are really far from where I work and it would be a huge drag to have to drive around an hour to work back and forth everyday once covid ends.
Yes that's understandable. I work downtown so it will be a drive for me as well. But we would only have to do it for a year before you can move out and rent the entire place, then you can find something closer. By then hopefully you saved enough cash to buy another one, or have enough funds for 20-25% in Charlotte.
Right now the best way to analyze these deals is looking from an owner-occupied/STR strategy. Most multi-family properties do not perform well in CLT due to how hot the market is for the whole southeast for that type of asset along with a couple of local factors. As someone coming from an appreciation-only market prior to moving to NC be the best way to look at it is from the 2-5 year approach and factor in things like local growth, school districts, employment centers, and the bottom line of the property. You are not going to find anything that is a "solid deal" right off the bat for the downtown market. But if it's only costing you a couple of hundred bucks living in a property that is getting at least 5% in appreciation while adding in all the other factors like debit yield & income growth. Then by year 5 you usually would have a solid or home run deal with you did your due diligence correctly.
My CA rental was the same. Barley cashed flow for year one but by the beginning of year 2 already had a 45k growth in appreciation and around $200 in rent increase due to SoCal's lack of inventory and it's a 7% CoC. Not bad considering I just purchased and rented it out with a PM with no rehab.
As of right now we are seeing multifamily property owners who have years of deferred maintenance under their belt try to sell at ridiculous prices hoping to get a sucker to bite. Don't fall for it. Be patient and start with single family if you need to OR really dig in and find a competent off-market seller.
@Stephen Brown this is great advice. I think I'm looking more into a SFH right now that's not too old but not the newest of the new so I can still do renovations to it. I will be in hopes of selling it probably in 2-4 years after.
Single family is likely best way to go in CLT for your first. Ideally, if you can househack with roommates would be good or buy something with a basement that you can finish and Airbnb. Multi especially small is so overpriced it doesn't make sense in Charlotte.