Seeking passive income perspective in the Carolinas

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Seeking passive income perspective in the Carolinas

Ryan M.
Asheville, NC · Member since 2016 · 11 posts · 3 votes

Hi folks, I'm Ryan, first time poster, new to real estate investing. I found BP a few months ago, after looking for avenues of passive income. I live with my family in the Asheville, NC area.

Here in the forums, I've seen folks like @Alex Franks counsel others to start locally, if they're new. Makes sense. I'm just wondering how local we're talking. I've met with the Asheville REIA a couple of times, talked with agents there about an affordable (sub-$80k?) buy and hold 3/2 that would rent well. They said, "Well…, it's not impossible, but..." Another local investor told me he hasn't bought anything here in the last year, and doesn't see that changing anytime soon. Not the encouragement I'm seeking, but it looks like that's the reality of the AVL market at this time.

I grew up in the Charlotte Metro area, so I like and am familiar with CLT. I also like the Greenville/Spartanburg area, for its proximity to me and its relatively lower housing costs, compared to AVL's.

So, I suppose I'm asking if you think I should also look at other regional areas, GSP, CLT, maybe Raleigh/RTP, or Knoxville/Johnson City, or do you think it's better to continue saving, continue learning about my local Asheville market, and see what comes up? Maybe I should look into other short term avenues of passive income in real estate while I wait?  I would value anyone’s opinion if you have the time to respond. Thanks very much in advance.

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Tomas Chao
Gastonia, NC · Member since 2016 · 124 posts · 45 votes
10y

@Brian Compton I drive for dollars in Mt Holly and Belmont. I choose there because I work at the two high schools there so it is very familiar to me. Also Belmont is the hottest community in gaston county.  I actually have a map and hit a few blocks/neighborhoods each week   I then research my potential properties and send out cards to the owners. I have been very surprised by my results. I am getting just under a 10% response rate from my first mailings.  Of course not all the responses are good leads but I have gotten a few leads that I am working on   I hope this helps. 

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  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    10y
    Originally posted by @Ryan M.:

    Hi folks, I'm Ryan, first time poster, new to real estate investing. I found BP a few months ago, after looking for avenues of passive income. I live with my family in the Asheville, NC area.

    Here in the forums, I've seen folks like @Alex Franks counsel others to start locally, if they're new. Makes sense. I'm just wondering how local we're talking. I've met with the Asheville REIA a couple of times, talked with agents there about an affordable (sub-$80k?) buy and hold 3/2 that would rent well. They said, "Well…, it's not impossible, but..." Another local investor told me he hasn't bought anything here in the last year, and doesn't see that changing anytime soon. Not the encouragement I'm seeking, but it looks like that's the reality of the AVL market at this time.

    I grew up in the Charlotte Metro area, so I like and am familiar with CLT. I also like the Greenville/Spartanburg area, for its proximity to me and its relatively lower housing costs, compared to AVL's.

    So, I suppose I'm asking if you think I should also look at other regional areas, GSP, CLT, maybe Raleigh/RTP, or Knoxville/Johnson City, or do you think it's better to continue saving, continue learning about my local Asheville market, and see what comes up? Maybe I should look into other short term avenues of passive income in real estate while I wait?  I would value anyone’s opinion if you have the time to respond. Thanks very much in advance.

    Ryan it all depends on what you are trying to accomplish

    Alex

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  • Ryan M.
    OP
    Asheville, NC · Member since 2016 · 11 posts · 3 votes
    10y

    Alex, thanks for your response.

    To clarify, the goal is (relatively) passive income, to build wealth now with current cash flow going towards purchasing more property or more debt, and then to supplement my income later (10yrs+).  With that end in mind, my options could be:

    1. BRRRR a SFR – either locally, or regionally. Steeper learning curve, more time intensive first (second, third,…) time out. Theoretically, I should have some equity by the time I'm done. The idea is of course to cash flow, even with property management baked in. With a full time job and family, time restraints could be an issue.

    2. Buy a SFR rent-ready, possibly via turnkey company. Little, or more likely, no equity for me initially, potentially less steep learning curve.

    3.  Notes or maybe private money lender.  Another learning curve, but aren’t they all?  I don’t get the inflation hedge this way.  Still, maybe a single or double is better than striking out while trying for a home run, especially in the beginning?

    There are other solutions that I’m likely missing, also.  Obviously, much due diligence is required for any of these approaches.

    Any further opinions?  Thanks again!

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  • Tomas Chao
    Gastonia, NC · Member since 2016 · 124 posts · 45 votes
    10y
    Hello Ryan M. And welcome to BP I find driving for dollars the best way to find potential properties in this market right now. Anything in the MLS is being gobbled up right away. As for the other markets, I'm in the Charlotte area. Curtis Waters has several turnkey properties that might fit your passive cash flow strategy. Best of luck to you.
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  • Abraham SaldanaBusiness Member
    Investor · Southern Pines NC · Member since 2016 · 64 posts · 46 votes
    10y

    @Ryan M.  I know that you want to start locally, but I would consider the Durham / Triangle market.  There are still lots of cheap(ish) houses with plenty of upside here.  As for turn key properties, that is what I am currently doing near the Fort Bragg area in Fayetville.  Even cheaper houses there, but you will want a good real estate agent to guide you to the best places to buy that senior officers and enlisted people are.  They make for great renters.  If you have any other questions about either of those areas let me know, ill be glad to help.

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  • Amy Good
    Real Estate Professional · Moore, SC · Member since 2015 · 47 posts · 11 votes
    10y

    @Ryan M. Welcome to BP! Great opportunities out there. Not being bias just because I live in the GSP area but it's growing so fast with businesses coming to our area. Great investment and neighborhoods here.

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  • Brian Compton
    Contractor · Charlotte, NC · Member since 2016 · 138 posts · 63 votes
    10y

    @Tomas Chao What's your criteria for determining where you drive for dollars? Do you have particular zip codes you focus in on (if so, why)? Or do you focus on areas more likely to sell vs rent, or vice versa, based off your preferred investment strategy?

    Thanks in advance for any insights you could share!

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  • Ryan M.
    OP
    Asheville, NC · Member since 2016 · 11 posts · 3 votes
    10y

    @Tomas Chao - Driving for dollars can't hurt - yet - with gas this cheap!  Thanks for the reminder.  I'll also look into Curtis Waters.  I usually visit Charlotte once a month or so.

    @Abraham Saldana - I appreciate the scouting report from the RTP.  I was a little worried that the area had been in the news too much, with too many "10 best places to (fill in the blank)," similar to Asheville, driving prices up too far.  Good to know there's still value to be found.  Any areas or zips you like in particular?  I'll keep my eyes open there.  I really like your Ft Bragg idea, being selective to find renters that want to rent, not because they have to rent (presumably, they could stay on base for less/free), similar to Ben Walhood's idea from BP podcast #177.

    @Amy Good - thanks for the GSP shout out!  I'm a big fan of the area, love the job growth.  Any areas in particular that investors should be looking?  Seems like the corridor between Greenville and Spartanburg might make some sense?  I'm about an hour away, this might be more conducive to me doing the landlording, rather than property management, so I could learn (faster) as I go.

    Big thanks again to everyone for their comments, this is very valuable stuff!

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  • John Coleman
    Investor · Greer, SC · Member since 2015 · 25 posts · 3 votes
    10y

    Go GSP.  1 hour away is nothing.  Still may want a local handy man or someone who is local.  maybe not a manager but someone who can swing by and take care of things and keep an eye on things.  

    I like Dunean.  Granted, ppl say its rough but that's on its way out.  

    Check zillow/historical price history 60 smythe ave, 40 blake, 41 Blake (reno sold in 2 days), 17 wallace, 31 seyle.  Its happening.

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  • Tomas Chao
    Gastonia, NC · Member since 2016 · 124 posts · 45 votes
    10y

    @Brian Compton I drive for dollars in Mt Holly and Belmont. I choose there because I work at the two high schools there so it is very familiar to me. Also Belmont is the hottest community in gaston county.  I actually have a map and hit a few blocks/neighborhoods each week   I then research my potential properties and send out cards to the owners. I have been very surprised by my results. I am getting just under a 10% response rate from my first mailings.  Of course not all the responses are good leads but I have gotten a few leads that I am working on   I hope this helps. 

    2Reply
  • Brian Compton
    Contractor · Charlotte, NC · Member since 2016 · 138 posts · 63 votes
    10y

    Awesome, yeah that's perfect. Thanks @Tomas Chao. Do you send them postcards or letters? Have you found one is better or worse than the other as far as responses? Or send one, wait a few weeks and send the other?

    And are you looking for vacant properties, FSBO, all the above?

    Thanks again!

    0Reply
  • Tomas Chao
    Gastonia, NC · Member since 2016 · 124 posts · 45 votes
    10y

    The answer is yes on the property I'm looking for. Anything has potential. I will even write down a random house in a neighborhood and just send out a letter saying if they know of anyone have them call me. That one hasn't worked yet but what is one more letter. I actually use blank cards I get from dollar tree. My plan is to follow up with yellow letters a month later then post cards. I plan on mailing 7 times total. I only have the first three set right now. Will see what works best for later follow ups. 

    1Reply
  • Account Closed
    Asheville, NC · Member since 2016 · 34 posts · 8 votes
    10y

    @ryan m hi! I'm also a new investor here in asheville. I just closed yesterday on my first rental in kennilworth forrest. Sounds like we are in very similar situations and have a lot in common. Tough to find great deals here right now huh. My place is a good 2/1. Not the best deal but I feel it's a great long term fit. I'm looking less for cash flow now and more for long term wealth and building equity also using the brrrr strategy. I have been reading and listening to lots of podcasts for awhile and just wanted to get off the sidelines. I sure learned a lot on this first purchase! I have about a month of repairs and then to get this rented and I'll start looking for the next. I haven't gotten to any local meetings yet as I have two young sons, but I hope to attend the meeting on June 13th. It would be great to meet you and connect! 

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  • Ben H.
    Investor · Jacksonville , NC · Member since 2015 · 143 posts · 54 votes
    10y
    Recommend posting over in the NC forum as well. Ben
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  • Account Closed
    Investor · Asheville, NC · Member since 2015 · 187 posts · 112 votes
    10y

        Sounds like you've put a lot of thought into this and IMO you're on the right track. I believe cash flow is still possible here in AsheVegas, but it's a lot easier in surrounding areas. I think Hickory/Lenoir may have some potential, and am still kicking myself for turning down a rather ridiculous deal that would have, with a ton of work on my part, resulted in seven properties with around a 1.7% gross monthly return. The two things that stopped me were having trouble finding a property manager able to commit to them (they were 2/1s in relatively poor shape),  and knowing that refinancing wouldn't be practical, since the post-rehab values would be around $50k each, so not really worth the loan costs, even if you could find a lender game to do it. 

         I'd also add the caveat placed on many similar posts that contractors, handymen and managers, especially around Asheville, are extremely undependable, and investing even an hour away seems to me to call for higher predicted returns, even if the other factors are reasonable. You probably also know this, but only pull the trigger on a deal that looks great- I've bought seven so far, and only one has turned out to be as strong a deal as it looked when I bought it, mostly due to exploding rehab costs and insane time delays by poor or over-committed contractors. This may actually be a reason to invest elsewhere- contractors in the more economically depressed areas, or with less of a nuclear housing boom, are far more likely to keep their commitments and actually do the work on time. You may even get to shop around, which is not an option here as far as I can tell- most well-reputed contractors are booked out months or more, and I'm calling in favors from friends to get even minor tasks done on time  :(

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  • Account Closed
    Investor · Asheville, NC · Member since 2015 · 187 posts · 112 votes
    10y

    @Ben H.   There's a NC forum?  Seems like that would be helpful, especially for finding vendors/contractors and trading deals...

    1Reply
  • Ben H.
    Investor · Jacksonville , NC · Member since 2015 · 143 posts · 54 votes
    10y

    Yes there is. Not sure how to navigate to it from the app or mobile site (any administrators out there, please register my unhappiness with the mobile app). 

    0Reply
  • Ben H.
    Investor · Jacksonville , NC · Member since 2015 · 143 posts · 54 votes
    10y

    Local Real Estate > Local Real Estate Networking & Recommendations > North Carolina Real Estate Q&A Discussion Forum

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  • Account Closed
    Investor · Asheville, NC · Member since 2015 · 187 posts · 112 votes
    10y

    Thanks Ben! Hard to find even with directions, but I made it. It seems like the local forums would be right at the top, with a single click to access. I'll keep an eye on it, and keep asking around for good contractors who aren't backed up with work until next year.  :)

    Chris

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  • Ryan M.
    OP
    Asheville, NC · Member since 2016 · 11 posts · 3 votes
    10y

    @Account Closed - I'm jealous you've found a deal!  Nice work, and best of luck going forward!

    @Ben H. - thanks for the tip on the NC local forum, I wasn't aware that existed.  I've taken your advice and re-posted there.

    @Account Closed - if you've got seven deals under your belt, you're doing something right in the area!  I really appreciate your perspective, and ideas.  I hadn't even gotten as far as vetting local contractors to do any necessary work, but that's big part of the team I'll need to assemble.  Thanks again for that important consideration.

    1Reply
  • Account Closed
    Investor · Asheville, NC · Member since 2015 · 187 posts · 112 votes
    10y

       Sounds like a lot, but only three of them would have worked without significant financial input on my part- however even the four "relatively poor" deals are paying exponentially better than the same money in mutual funds. This has also been the result of approximately 20 hours per week of searching, haggling and managing rehabilitations over the course of 20 months. Experienced investors would probably laugh at how little equity I have in hand for so much work, but the rental income is adding up, and I've learned so, so much in the process   :)

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