Invest local & expensive or long-distance and cheap?

Question

Hi, BP community! New investor here hoping to gain some insight into different strategies for my first deal.

I currently reside in Durham, NC (bought first home in 2020) and have been interested in buying my first rental property in the Durham area or more broadly the Triangle of NC. Although having my first property within 30 minutes would be ideal, home prices are expensive and the market is still very competitive in this area. I am reading Brandon's book Rental Property Investing and just finished the chapter on local vs. long-distance investing so I wanted to post the question here.

Here's my general hope for the first deal

-under $200k

-small multi-family

-open to a small amount of rehab needed to get it rent-ready

If I chose to invest long-distance, it would hopefully be within a 3-hr radius (Southern VA, other cities in NC, etc).

Any advice for first time investors in the Triangle of NC in the current market? I am also interested to hear arguments for long-distance (but still within driving distance) investing and if that has a high barrier to entry for first time investors.

Thanks!

Nathan Faucett · Answer

Hi @Elyse G.

Local Greensboro investor here. Congrats on your goal to jump into real estate.

Specifically for Greensboro area, I know that small multifamily is HOT. Everyone from all over the country (as you can tell by the forum posts) are looking at Greensboro, NC as a cash flowing market.

You may have an advantage being from Greensboro, NC because you may know of an off market deal, but aside from that, I struggle to think that you would be able to find an MLS, small multifamily deal that needs little work that is less than 200k.

Maybe something you could do is draw a circle on Zillow at approximately 120 miles around Durham, NC and look for properties that fit your criteria (small multifamily, less than 200k).

Then you could maybe find some areas where those criteria are possible and see if you would be interested investing in those areas.

Hope that helps!

JD Martin · Answer

You have some opportunities not far from home. There are still buying opportunities in Winston-Salem, Burlington, Greensboro, Asheboro, etc. If you look at some of the suburbs of Greensboro & Winston-Salem you can find properties that would still make sense.

Thomas Bortnick · Answer

Hi Elyse,

There are definitely some good opportunities in Durham, NC, they are just harder to come by. I would consider looking at single family properties that would work as rentals or Airbnb's. If you are willing to Airbnb, condos are another good option because the barrier to entry is typically much lower than with single or multi family houses. Finding a property in need of rehab is one of the best ways to build equity fast, and fix the property the way you want it to be done. I hope this helps!

Stone Jin · Answer

@Elyse G.

Hi and welcome to real estate investing.  We invests locally and long distance and actually have considered the Greensboro and Charlotte market,

I think once you get 30 min away from your house you might as well treat it as 3 hours away.  You’ll mostly hire out maintenance issues and possible use a property manager.   If you want to self manage then investing locally will save you the 10-14% management cost which will significantly increase your return.

You may consider other niches in your local market.  Would renting by the room or doing short term rentals be better in your appreciating market?

Don’t get stuck in thinking there is only close vs far.  Explore all the options and see what might work best!

Cameron Braig · Answer

@Elyse G.

Congratulations on getting started and welcome to the forum.

As alluded to above Winston-Salem and Greensboro are somewhat local metros to you that have performed well and look poised to continue as the southeast continues to experience; population growth, job growth, rent growth and job diversification. Metrics like these could possible help in the decision of whether to keep it local or long-distance. Ultimately it comes down to how well you know the market and sub-market, what could potential challenges be, what are the motivators for a particular market, etc.

Best of luck and congrats again on getting started.

Elyse G. · Answer

@Jake Wosick really appreciate it! I'll be sure to reach out if I need anything!

Elyse G. · Answer

@Nathan Faucett awesome, thanks for the tips! I can see that market is very hot right now and MF properties are already more rare than SF. It's good to know though that the areas close by are considered hot markets to people outside the area too, makes me excited to get started!

Justin Craver · Answer

Hi @Elyse G. Congrats on digging in to investing!  I grew up and invest around the triad (live in Oak Ridge now) and went to school at NC State in Raleigh.  I would love to get into your market, but think it would likely need to be STR. Certainly anything that was on market, anyways. So maybe give that a look if it is of interest to you. As others have mentioned investing back in the Triad could be a good play but of course small MF properties are tough to come by.  I'm working on getting my RE license now and have a small construction company, so let me know if I am able to be of any help :)  Good luck!

Jake Wosick · Answer

@Elyse G. I am a local broker in the Raleigh area. I love to help you out. If you are interested, please let me know.

Elyse G. · Answer

@Caleb Griffin thanks for offering to help. Yes, the local market is pretty crazy but I am looking forward to finding the good opportunities nearby. I'll reach out if I decide to go the Greensboro route!

Invest local & expensive or long-distance and cheap?

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