NC Too Hot of a Market?

[Mike Huang]

Hi BP!

I'm looking into NC as a market now and a realtor who's the cousin of a good friend told me that the market there is too hot to really cashflow enough to make it worth investing in the popular areas, such as the Triangle, Triad and Charlotte areas. He has recommended looking at places about 30 minutes out from those areas.

Is this true? How would I go about finding deals that prove the exception to the rule?

[Gregory Walter]

Is your cousin a Realtor in those area outside of the metro areas?  I've never had a problem finding properties that will cashflow in Charlotte.  Charlotte is a huge city geographically, with plenty of areas to look in.

To find good deals anywhere you just run the numbers.  The numbers don't lie.  

I'm not a fan in investing in undeveloped areas.  @Dawn Brenengen said it right the trade of is cash flow for potential appreciation.  Because if you buy in an undeveloped area when the area does develop your property, your property will be competing with newer homes which will affect its value.  
The other thing I think about it who is going to rent.  In Charlotte, there are people moving to the city all the time, often for high paying jobs.  These people have a reason to rent and money to pay the rent.  If I go out to a rural area, I ask who is going to be renting from me and with properties so cheap out here why are these renters not buying.  What level of rent will I get relative to expenses I may incur?  etc.

On a side note, I don't think the properties in NC are particularly expensive.  People from NC may feel that way relative to how dirt cheap there were in year past.  Anyone from a major metro, especially on the West Coast or NE can tell you that when a city becomes an increasingly desirable place to live people and the supply demand curve changes people are willing to spend a larger and larger share of thier income on housing.  Charlotte and I believe other cities in NC are still pretty affordable when you look at housing expense vs. income relative to cities that offer similar lifestyles.  Plenty of room for property appreciation based on that measure.