Rental Property Investor · Mooresville, NC · Member since 2018 · 117 posts · 32 votes
My wife and a friend of mine are looking for some buy and hold properties in the Lake Norman, North Carolina area (from Huntersville to Mooresville) and are having a hard time finding and that hit the 1% rule.
Actually, most just hit the .7% plateau. While I realize this isn’t the only thing that makes a property desirable, I’d love to see JUST ONE hit that mark.
Investor · Mooresville, NC · Member since 2020 · 16 posts · 29 votes
6y
Hey Mark - we have several properties in the LN Area and I've rarely been able to hit the 1% ratio, 75% ARV or other more traditional means of measuring value upfront. It's not that I haven't worked hard to find better values, in my experience these opportunities just haven't been as plentiful as in some other markets. However in spite of the higher up investment, we have seen steady appreciation, low turnover, nearly always rent quickly and overall have been happy with our investments and their returns. Anyway thought sharing our experience may help at minimum firm up your expectations. Good luck in your search!
Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
6y
Mike, when you get into an area that is sub-1% it’s usually a reflection of risk. Much like a cap rate, the lower the cap rate the higher the value (selling price) compared net income.
These types of properties tend to lean towards easier to rent, higher appreciating, or class A assets. There’s a flip side though, in that the higher the cap rate / 1%+ rule you get into properties with higher risk and higher returns.
Investor · Mooresville, NC · Member since 2017 · 28 posts · 15 votes
6y
Hey @Mark DiPietro, everyone thought it was a seller's market before - well now it REALLY is around the Lake Norman/Mooresville area. There isn't much inventory to pick from and when there is, it's flying off the shelf. I have seen some AirBnB potential properties that are obviously more work/risk but would be pretty lucrative.
Investor · Mooresville, NC · Member since 2020 · 16 posts · 29 votes
6y
Hey Mark - we have several properties in the LN Area and I've rarely been able to hit the 1% ratio, 75% ARV or other more traditional means of measuring value upfront. It's not that I haven't worked hard to find better values, in my experience these opportunities just haven't been as plentiful as in some other markets. However in spite of the higher up investment, we have seen steady appreciation, low turnover, nearly always rent quickly and overall have been happy with our investments and their returns. Anyway thought sharing our experience may help at minimum firm up your expectations. Good luck in your search!
Rental Property Investor · Mooresville, NC · Member since 2018 · 117 posts · 32 votes
6y
@Terry Johnson, are you involved in any real estate groups here? We have found one in Charlotte but would love to get together with other investors up here.
Thank you for all the information! It’s really helpful.
Rental Property Investor · Cornelius, NC · Member since 2018 · 19 posts · 11 votes
6y
Hi Mark and all of you! We moved a the Lake Norman area two and a half years ago from California and we're very happy here :) We have been investing for about a decade now and started or journey here in 2018 with a 10-31 exchanges. We were able to built a small portfolio in Mooresville area. We did several flips also. You are correct! In fact it has been very difficult to find investments that will get into the 1% rule and it's getting much harder. Basically there is no inventory these days. We still find and buy properties, but it's really challenging. Eventually things will change, who knows when and how. Many large investors are sitting on huge amount of cash, waiting for corrections. I have been waiting for corrections for over 3 years and nothing happened. There is still money to be made meanwhile, but we need to understand where we are on the current cycle. In my opinion the 1% rule is not a set in stone rule at all, in fact completely meaningless by itself. It should serve just as a GUIDE. There are many-many other factors to be consider:
Examples:
- property condition (perhaps someone would rater invest with a .7% rule in a house in decent condition compare to the 1% with an old house in fair condition)
- market rent, demand and trends (migration, jobs etc)
- quality of "available tenants"
- available cash or cost of borrowed money
- desirable term, (short, medium, long term )
- cost of property management, including maintenance (can you and willing to self manage it?)
- risk tolerance
- exit strategy including property appreciation trend
These are just a few that came to my mind.
Mark bought up the RE groups, why don't we create one? I'd love to grab a coffee with like minded people in Mooresville, who is in? :)
@Tim G. bring it on! We’ll slow down the bandwagon for you. Ha!
I appreciate that. I've never actually been there, but flew over a few times en route to CLT. Seems like a solid market for future appreciation. Charlotte is worth betting on.
Rental Property Investor · Cornelius, NC · Member since 2018 · 19 posts · 11 votes
6y
Tim, our neighbors across the street are from San Diego. My brother lives near you (San Marcos) and they drove to here a few weeks ago with family. They enjoyed it a lot and consider to move, among with some other friends. I'm worried that local people will get upset to me if I recruit more... Anyway, after 18 years in the San Francisco Bay Area, I finally live in the USA :) We love our life here, grateful that we can raise our children in this area, the people are great!
Investor · Canyon Lake, CA · Member since 2015 · 92 posts · 34 votes
6y
@Tim G. You're right about Lake Norman being the only area to move to from San Diego County. I lived in Leucadia for 27 years. I still have a rental in Oceanside.
There is a Lake Norman Meetup. I haven't attended it but the person who organizes it is a member of Bigger Pockets. Her name Caten Murphy. Here's information on a prior meeting. The contact information is there
New York City, NY · Member since 2018 · 26 posts · 2 votes
6y
I've looked on LKN as well. For higher returns, you'll need to do vacation rentals (1M house can rent for 100-120k/year) but they require a lot more work obviously. Vacation rental management companies here cost 20% or so, which I would need since I don't live here yet. I passed, for now, but I'm afraid home prices here are gonna keep rising and its tempting to get in now.
Anyone know if 10% loans are available on houses in the 700-900k range? I don't have a mortgage anywhere else (renting) at the moment
I've looked on LKN as well. For higher returns, you'll need to do vacation rentals (1M house can rent for 100-120k/year) but they require a lot more work obviously. Vacation rental management companies here cost 20% or so, which I would need since I don't live here yet. I passed, for now, but I'm afraid home prices here are gonna keep rising and its tempting to get in now.
Anyone know if 10% loans are available on houses in the 700-900k range? I don't have a mortgage anywhere else (renting) at the moment
Rental Property Investor · Charlotte, NC · Member since 2017 · 271 posts · 259 votes
6y
I'm in Huntersville and would also be interested in meeting up. As others have said, 1% deals are difficult to find on the market near LKN unless you do the short term rental route.