Moving to Raleigh North Carolina

North Carolina Real Estate Q&A Discussion Forum
4yFollow

Moving to Raleigh North Carolina

Sean Ade
Real Estate Agent · Member since 2018 · 90 posts · 25 votes

Hey BP. I'm going to be selling my duplex which I've househacked over the past 3 years in Portland OR and moving back to where my family is in Raleigh NC. Since the duplex was my primary residence, I won't have to pay capital gains tax which is great. So my plan is to take my profits and buy a small multi in the greater Raleigh area. I know Raleigh has exploded the last few years so I'm looking to go right outside city limits in the path of progress. I'm wondering what areas you'd recommend looking in? I'll have about $150K to invest and am hoping this would be enough to get into a 6-10 unit. TIA!

2Reply
112 views

Most Popular Reply

Mitch Miller
Investor · Raleigh, NC · Member since 2014 · 104 posts · 112 votes
4y

@Sean Ade First welcome back to the Raleigh area and congrats on the success in your duplex.  

As far as your question, If you are looking for "outter City limits" you do not have enough to get a 6-10 unit.  Your 150k at 25% down (commercial standard) you are looking at 600k.  You wont find find anything that cheap in the near areas of Raleigh.  Places like Zebulon, Wendell, Clayton, Garner, Fuquay are all past those price points for 6+ units.  And are prolly the most up and coming areas.  Those would also be considered Raleigh suburbs.  If you look farther out you might find deals in your sweet spot.  I would look at places like Alamance county (Burlington, Mebane, Graham), Greensboro, Angier, and Lillington.  These places are growing with Raleigh but at variring clips.  I would take a look at them and see what best fits your goals.  You have a leg up being from here or having family here.  

Another note, I know Portland is seeing a lot of growth as well.  You are able to get your gains tax free from it being your primary residence for the at least two years. That rule is actually written as 2 out of the last 5 years. So you may have the ability to hold it for up to 3 more years and still not pay tax on gains up to 250k, or 500k if you are married.  So that could also be a play if it fits your goals.  

Hope it helps and there are a handful of meetups in the area so reach out once you move back and I can let you know when and where they will be. 

Best,

12Reply
See this reply in the discussion

25 Replies

Jump to latestLatest
  • Mitch Miller
    Investor · Raleigh, NC · Member since 2014 · 104 posts · 112 votes
    4y

    @Sean Ade First welcome back to the Raleigh area and congrats on the success in your duplex.  

    As far as your question, If you are looking for "outter City limits" you do not have enough to get a 6-10 unit.  Your 150k at 25% down (commercial standard) you are looking at 600k.  You wont find find anything that cheap in the near areas of Raleigh.  Places like Zebulon, Wendell, Clayton, Garner, Fuquay are all past those price points for 6+ units.  And are prolly the most up and coming areas.  Those would also be considered Raleigh suburbs.  If you look farther out you might find deals in your sweet spot.  I would look at places like Alamance county (Burlington, Mebane, Graham), Greensboro, Angier, and Lillington.  These places are growing with Raleigh but at variring clips.  I would take a look at them and see what best fits your goals.  You have a leg up being from here or having family here.  

    Another note, I know Portland is seeing a lot of growth as well.  You are able to get your gains tax free from it being your primary residence for the at least two years. That rule is actually written as 2 out of the last 5 years. So you may have the ability to hold it for up to 3 more years and still not pay tax on gains up to 250k, or 500k if you are married.  So that could also be a play if it fits your goals.  

    Hope it helps and there are a handful of meetups in the area so reach out once you move back and I can let you know when and where they will be. 

    Best,

    12Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    Thanks, Mitch! I'm open to looking further out! Ideally would be in about a 1.5-2 hour drive from my parents house in Rolesville. I like the idea of househacking a small multi family. But I also have a partner that is a residential REA in KC MO who'd potentially partner with me on a project in NC and he'd bring another $150K to the table so we'd be looking closer to $300K. That should give us $1.2M at 25% down...would that be more realistic? I've also purchased a few small businesses (laundromats and retail) using seller financing and would love to find something with a seller that maybe doesn't want to pay taxes on their gains if they've owned it for a while and might consider carrying. 

    0Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    Would also love to connect about those meetups once I'm back! 

    0Reply
  • Mitch Miller
    Investor · Raleigh, NC · Member since 2014 · 104 posts · 112 votes
    4y

    @Sean Ade Nice, I think 1.2 is at a point where you can find some deals in that area especially if you are looking up to 2 hours drive from Rolesville.  Places like Wilson, Rocky Mount, Greensville, and Fayetteville are inside that and are not as competitive as the places mentioned prior.  So you should be able to find a 6-10 multi with that price point.  

    Business wise, you have a good chuck to place down especially if you are doing seller finance.  They dont call it creative finance for nothing, you can prolly find deals with your investment capital there too.  

    Best of luck!

    2Reply
  • Jason E. Smith
    Contrarian Investor · Greensboro, NC · Member since 2016 · 219 posts · 174 votes
    4y

    Sean, safe travels to North Carolina. Can I ask why you’re only considering real estate?  I made the same choice in 2005 and it cost me about ten years. 

    1Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    @Jason E. Smith Talk to me, goose.. I own a laundromat here in Oregon and love it and would probably be looking at mats in NC, but just need to get to know the area better. I'll shoot you a message.

    1Reply
  • Jordan Berry
    Real Estate Agent · Fullerton, CA · Member since 2016 · 140 posts · 103 votes
    4y

    @Sean Ade Luke and Lee Williford own 40 laundromats all around Raleigh and Fayetteville. And they’re good dudes too

    1Reply
  • Briana Knowling
    New to Real Estate · Rocky Mount, NC · Member since 2021 · 5 posts · 3 votes
    4y

    What is it like owning laundromats? Are you guys buying existing ones or building your own? 

    0Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    @Jordan Berry You're the man! Love your podcast. Thanks for all your content. Would it be too much to ask for an intro to those guys? 

    @Briana Knowling it's awesome. It's such a great small biz model. I'm buying existing ones, not building. DM if you wana chat more about it. But definitely talk with Jordan he's way ahead of me in the laundromat world.

    1Reply
  • Jefferson Roberts
    Member since 2019 · 2 posts · 0 votes
    4y

    So understanding that many big tech giants are moving in to the area I all depends on what area you want to get in to. Fuquay and Varina has been blowing up lately. Your idea of a multiplex Is well outside of RDU at least until the market crashes and that may not be until some time. Are google and Apple are doing some HQ work in the area. RDU = east coast Silicon Valley. Plan and simple. 

    0Reply
  • Jordan Berry
    Real Estate Agent · Fullerton, CA · Member since 2016 · 140 posts · 103 votes
    4y

    @Sean Ade not at all. DM me your info and I’ll introduce you!

    1Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    @Jefferson Roberts thanks for responding. What would be your recommendations? Know anyone I should connect with?

    0Reply
  • Jefferson Roberts
    Member since 2019 · 2 posts · 0 votes
    4y

    @Sean Ade Sorry, I do not have any connections up there right now. I am looking to move back there myself, but have not yet started that process. 

    0Reply
  • Caleb Webster
    Real Estate Agent · Portland, OR · Member since 2017 · 117 posts · 59 votes
    4y

    @Sean Ade Definitely consult with your CPA but I think you may be on the hook for 50% of the capital gains if you sold since only half of the property was considered your personal residence. I was house hacking 4 out of 5 bedrooms in my PR and my CPA said that I'd have to pay 4/5ths of the capital gains if I sold. 

    0Reply
  • Chris Carrigan
    Real Estate Agent · Wake Forest, NC · Member since 2015 · 66 posts · 54 votes
    4y

    I agree going East to Greenville area. Lower prices, but a college town so a lot of demand for rentals. Fayetteville- military town. Closer in I'd look at Franklinton and Louisburg, both are growing quickly with SFH on outskirts but the City's themselves will be following pretty quickly with the overflow from the Triangle.

    1Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    Thank you @Chris Carrigan!!

    @Caleb Webster yup you're spot on. I'd need to pay gains on the rented portion of this duplex. Just got an estimate from my CPA that I'd be looking at about $30K in taxes for that half. So the plan is to try and 1031 now. 

    0Reply
  • Josh Crowell
    Lender · Durham, NC · Member since 2015 · 7 posts · 4 votes
    4y

    @Sean Ade I am in Durham, which like the rest of the Triangle has become much more expensive over event the last 12-18 months, part of a larger/longer trend.

    I agree with some of the rest of the comments that with $150K you would be looking outside of central Durham, Chapel Hill, or Raleigh. If you are ok, which it seems you are, to be 1-1.5 hours outside of the Triangle take a look at anywhere in the Triad (Burlington, Greensboro, High Point, Winston) or east to Clayton, Fuquay, Sanford, Fayetteville. All of these are seeing a lot of investment right now.

    My line of work is with agency & life co finance. For 5+ units, the agencies (Fannie Mae, Freddie Mac) will do 80% in 'standard' markets (Raleigh & Greensboro/High Point are standard) and 75% in what they consider 'small' or 'very small' markets (Anything east of Raleigh and somehow Durham/Chapel Hill). Some bridge to Freddie SBL products will do 85% of acquisition assuming some value add increases before refinance by Freddie at 75-80%. These are for loans of $1M-$7.5M with long-term fixed rates.

    So, $150K will get you $750K to $1M purchase at 15-20% down, sounds like you have a bit more capital available than that. Outside of some class C stuff, most MF is up to $200K+ per unit in the Triangle.

    Also, if you are ok moving to a small enough market, USDA will guaranty up to 90% of a loan in rural markets with 5+ units with renovation plans to the property. Up to a 40 year term, which is crazy.

    They have a good tool for eligible areas here: 

    https://eligibility.sc.egov.us...

    Hope this helpful information. Feel free to message me if you want to chat.

    Josh

    3Reply
  • Sean Ade
    OP
    Real Estate Agent · Member since 2018 · 90 posts · 25 votes
    4y

    @Josh Crowell Thanks for your response! I'd love to talk more about the USDA Loan you mentioned, I've never heard of that before! I'll send a DM.

    0Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    4y
    Originally posted by @Caleb Webster:

    @Sean Ade Definitely consult with your CPA but I think you may be on the hook for 50% of the capital gains if you sold since only half of the property was considered your personal residence. I was house hacking 4 out of 5 bedrooms in my PR and my CPA said that I'd have to pay 4/5ths of the capital gains if I sold. 

    That sounds like wrong advice that you got from your CPA.

    Section 121 exclusion applies differently if the house is a SFH and you are renting out the rooms vs a multi-family home and renting out units.

    Get a second opinion.

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
    View Page
    1Reply
  • Jason JohnsonPro Member
    Rental Property Investor · Fullerton, CA · Member since 2010 · 36 posts · 7 votes
    4y

    @Sean Ade

    I was flew out of RDU on Friday, back to Orange County. I am looking to move back to the area also (with my wife and kids) and to be closer to my family in WV. I lived in Durham 1999-2001. The prices have went up so quickly. We were looking for places to live, and prices are unbelievably high now. I have heard Pittsboro is a really nice area but have not been there.

    I own some property in Winston Salem (SFH). Not sure if you would be interested that Far East or not. I saw some mention of Greensboro, and WS is pretty close to there.

    nice are

    0Reply
  • Jason JohnsonPro Member
    Rental Property Investor · Fullerton, CA · Member since 2010 · 36 posts · 7 votes
    4y

    @Josh Crowell

    I used to live in Durham and looking to return to the area in the near future, from California. I will have some funds in a mail self directed retirement account that I will be looking to invest into multi family projects.

    Are you familiar with loan products that make non-recourse loans to self directed retirement accounts?

    Are entities such as self directed retirement accounts able to get USDA loans or is that only for personal use?

    YhNks in advance!

    0Reply
  • Josh Crowell
    Lender · Durham, NC · Member since 2015 · 7 posts · 4 votes
    4y

    @Jason Johnson Look forward to having you back in the area. I am sure Durham looks like a completely different place from your time here in '99-'01. I have only been here since 2018 but many of my friends and clients have seen the last 15-20 years of evolution for the city. 

    Regarding your question, I am not sure. Unfortunately I do not have any experience with self-directed IRA lending. I am outside of my knowledge, but I would assume the retirement funds are in your personal name and the loan would be in your name as well?

    Happy to connect and hear more. I might could make a connection the area depending on the need.

    0Reply
  • Caleb Webster
    Real Estate Agent · Portland, OR · Member since 2017 · 117 posts · 59 votes
    4y

    @Basit Siddiqi I just switched CPA's actually so I'll pose this question to him, thanks for letting me know though! This would definitely change things for me.

    0Reply
  • Graham Storey
    Real Estate Broker · Durham, NC · Member since 2020 · 49 posts · 42 votes
    4y

    @Jason E. Smith I'd love to hear your story on how it costs you 10 years. I am a the beginning stages of investing myself. 

    @Sean Ade Hope you're settling in nicely to the Raleigh area. It's great here. I would be curious to see where you ended up buying?

    0Reply
  • Patrick Knapp
    Contractor · Wake Forest, NC · Member since 2019 · 138 posts · 132 votes
    4y

    @Sean Ade a big issue your gonna face will be 2 things

    #1 financing for owner occupied multi family property ( 5 units or more).

    #2 finding the damn property lol

    I’m located in Wake Forest right above Raleigh and do investing local here and working as a general contractor for investors. So if you have any questions about the area feel free to shoot them my way.

    Right now it’s very tough to find a deal here

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free