Multi family properties in Gastonia NC

24 Replies

Hi BP folks, I want to ask the locals about investing in Gastonia NC, where are the good area/subdivision for multi-family investments? I saw a couple deals around 28052 zip code but not sure if it's feasible to buy properties there.

I'm originally from CA and have lived in or near Raleigh (Knightdale) for the last 9 years. but I wanted to see what was recently written about Gastonia. Mind you, I never listen to fox news, and everyone has their own opinion; however, THEY had this to say about Gastonia (obviously, many folks in Gastonia disagreed) :

GASTONIA, NC (FOX 46 WJZY) - A new report has named Gastonia, NC as one of the worst cities to live in the United States.

24/7 Wall St. recently released their listing of the "50 worst cities to live in." According to the list, Gastonia was #45 and the only North Carolina city to be named.

The report states that Gastonia's population has more than tripled in size since 1950, but still lags behind in a number of quality of life issues.

"The city's poverty rate of 19.7% is well above the nationwide average rate of 14.7%. Also, there were 716 violent crimes reported per 100,000 Gastonia residents in 2015, one of the highest violent crime rates of any U.S. city," according to the report.

While Charlotte's economy has transformed into a major banking and financial center, Gastonia has relied on manufacturing, which has been in active decline over the years.

I don't know that I would consider Gastonia for my first foray into another state to purchase real estate, but that's just MY opinion. There is a LOT of growth in NC, I'm just not sure that's the area you want to look into. Unless they're building a new university. As they say, due your due diligence and find out why people are moving to a given area and consider looking there.

I haven't seen that report yet @Candyce Blodgett but I'm not surprised. I've been investing in the belmont / mt holly area just north of Gastonia. I've searched Gastonia many times for investment opportunities just haven't pulled the trigger yet on the right deal.

In the 1970's in New York, across the street from my firehouse (long before I got there), the guys in the house were offered to purchase a building. Lower East Side in manhattan in the 70's meant a whole lot of fire, and a whole lot of crime, but not an ideal place for any of these guys to put their money. The building was offered at $60,000 I believe which they passed on. That building sold again just recently for something like $14,000,000.

For many of the reasons listed I think Gastonia is still a great investment for the long term. The historic houses are incredible and they have a long main street with tons of potential. Should the overcrowding in Charlotte spill a bit south (which it has been), my forecast is some larger companies (ie. amazon) will take advantage of the cheaper land, old warehouses and walkable main street to plant their foot in Gastonia. And if/when that happens, I'd love to be part of the windfall to follow.

Now, all that said @Johnny Szeto, if you're interested in quick returns on a flip or immediate cash flow I'd look more towards the current developed suburbs like Matthews, Mint Hill or Mooresville for example.

I'm in the Mooresville area and I've been keeping my eye out for some deals but I just don't see the rents making sense for the home prices right now. Because of the schools Mooresville has exploded with growth but the rents seem to still be down unfortunately. Most "deals" aren't hitting the market at all and being scooped up by those with bigger pockets (no pun intended).

Thank you @Brian Orr , my main focus for now is to generate above average passive cash flow in the long term.

In that case @Johnny Szeto I'd stay clear of Gastonia in the short term for sure. There's just not enough jobs around there right now. Check south or northeast of charlotte, maybe concord area?

Originally posted by @Brian Orr :

I haven't seen that report yet @Candyce Blodgett but I'm not surprised. I've been investing in the belmont / mt holly area just north of Gastonia. I've searched Gastonia many times for investment opportunities just haven't pulled the trigger yet on the right deal.

Morning Brian,  

What's different about the investments you have made in Belmont/Mt. Holly than what you are seeing in Gastonia?  What about the deals you have found in Gastonia haven't been right for you to pull the trigger?

@Johnny Szeto, We bought a 76-unit complex in Gastonia back in June, that was our first investment property in NC.  We're now in the process of re-positioning the property by renovating units and taking care of deferred maintenance.  While it hasn't been a walk in the park we're already starting to see results and our rents per sqf are climbing month over month.  We're at a point where there's a wait list for units at our property, and indication that we still have pricing power and that demand is outstripping supply overall.

The two things that have been surprising to me since we've acquired are property are; (1) we've seen tons of people coming to us from Charlotte.  There's an affordability crisis going on in Charlotte right now.   And while there's an argument to be made about the strength of the local job market in Gastonia there are people tons of people working in Charlotte that are leaving in search of more affordable housing.  (2)  There's a significant migration into the city from the Northeast and not everyone is going to Charlotte.   l've personally met quite a number of folks who are recent transplants to Gastonia.  I am always surprised to meet another New Yorker in town but it's becoming more common. 

Given my experience above I can see why Gastonia has the fastest growing rents in the region:

In any case, I don't regret investing in Gastonia and if we could pick up more assets there I would.  Like any thing else, you have to know your pockets.   It's also a very local market so it pays to invest in building your network there.   

My opinion... get your own real data and stay away from reports with faulty methodology.

In 2 minutes, I found this from NC data sets . Compare violent crime in Gastonia to Lumberton or Laurinburg and you'll see that there are plenty of higher crime (and unemployment, worse housing, on and on) NC cities... just cities that the report filtered out because of their selective methodology. 

That is a nice angle to see this @Chris Martin , thank you! In my opinion, even in ghetto area, there will be good tenants, people need to have a nice and safe place to live, we as investor need to explore their needs and find ways to accommodate it.

I'm going to agree with @Ruben Guerrero on this one. Gastonia has long been known for slumlords and the dirty city in the past. Once the mills closed the economy went down. However I've been investing there since 2011 and I've seen rents jumps $100/door since then. 15 min drive to Charlotte seems to attract a lot of people who don't want to pay $1000/mnth for a 1/1. Gastonia is on the rise and it will be a Belmont in the next 5-8 years. The city is pumping money into infrastructure along with a $15M baseball stadium coming to downtown Gastonia along with Loray Mills renovation that has boosted rents. Yes there are still some low end areas, but you'll see them turnaround in the next 5 years. Appreciation is taking effect already in downtown. 

@Ruben Guerrero if your in the area give me a shout. Would love to sit down and chat!

Hey @Tyler Watts , I'll be back in NC for most of November. I'd love to meet up and discuss more about the Gastonia development. I've spoken with council members on and off the past few years but I haven't been able to get down there in over a year. I did notice a lot of properties I looked at have since been flipped. Last I heard they were developing the arts district with work/live space - do you know if that ever happened?

Hey @Josh Stack

I was focusing on the more historic homes on the south / south eastern part of town, near and around the mill. In one word - foundations! Almost every one of these homes had such dramatic structural damage that was just above my scope. If any contractor who specializes in foundations were interested they'd probably strike gold there.

Aside from that, the numbers. Searching mostly through MLS at the time the math just didn't work on a lot of the listings. The upside just wasn't there in the time frame I was looking for to accept anything less than a killer deal.

My timeframe has nudged slightly since as I do see the extension of Charlotte further down as I've noted above. The reason Mt. Holly and Belmont worked is because of the neighborhoods and the numbers, as simple as that really.

One caveat for the commuter plan though, exit 26. It's a nightmare

@Brian Orr @Tyler Watts

I'll be back in Charlotte and Gastonia the first week of November.  Would love to host a get together at our property, see a real live case study of Gastonia.   Or we could just meet up for drinks, happy to do either :)

Shoot me a time and date and I should be able to make it happen. 

@Brian Orr , what makes you think the Charlotte spillover won't go in the direction of South Carolina? You mention "a bit south" but there is still a lot of inexpensive land in York & Chester counties. I grew up in that area so I am interested in why the expansion of Charlotte just seems to stop at Rock Hill. 

Very interesting observation @Rachel N.

Dig a little, and it's clear form a HUD perspective that the Charlotte MSA (Metropolitan Statistical Area) is Charlotte-Gastonia-Rock Hill, not Charlotte-Concord-Gastonia. HUD 2018 Qualified Census Tracts - Metropolitan Areas  shows on page 8: METROPOLITAN AREA: Charlotte-Gastonia-Rock Hill, NC-SC MSA not Charlotte-Concord-Gastonia. This is true with the 2017 Qualified Census Tracts - Metropolitan Areas, 2016 and 2015 as well.

The U.S. Bureau of Labor Statistics, on the other hand, seems to equate Charlotte-Gastonia-Rock Hill, NC-SC MSA and Charlotte-Concord-Gastonia. This page shows Charlotte-Gastonia-Rock Hill, NC-SC while this page shows both, and this page shows Charlotte-Concord-Gastonia, NC-SC ... with all pages showing the same numbers.

I conclude one of two things. Either Concord NC is exactly the same in every respect to Rock Hill SC, or (more probable) BLS has a labeling issue. It's all one giant mosh pit anyway. 

On a real estate site like this, I'd stick with the more consistent HUD MSA which is Charlotte-Gastonia-Rock Hill. So NC and SC as part of the equation, as shown by the image from the Charlotte Regional Partnership above.

@Rachel N. You're absolutely correct about the spillover going into SC.  That's why we're also buying in the Rock Hill and Fort Mill areas as well.

@Rachel N. I wouldn't presume to project where the spillover will occur. Rock Hill and Fort Mill are certainly building too. Two main reasons I prefer Gastonia - 1 traffic on 77 is a nightmare in both directions north and south of the city... Improving to the south but not great. 85 is much more stress-free commute.

2 - Gastonia has the one major thing that I love most of all and I probably mentioned before: They have a downtown, walkable Main Street. It's that classic layout that's close to impossible to reconstruct with new developments. Now, the development or revitalization of that is key to my speculations of course. Without that, Gastonia will be hard to compete with upscale cul-de-sac communities being built down 77. But for the dictators of suburban/urban growth (the artists, musicians, small business owners, etc...) Gastonia is like a blank canvas waiting to be painted over. Hopefully

@Chris Martin , that map is fascinating. Thanks for sending. I don't think Rock Hill is much like Concord, so I would also go with a labeling issue there on the BLS. I'm waiting for the real estate spillover to go slightly below Rock Hill, since there's plenty of land between there and Columbia off I-77. Lots of beautiful, rural countryside. Good school districts, not so much.

@Ruben Guerrero , glad to hear you're investing in that area. 

@Brian Orr , really interesting point about Gastonia's walkable downtown. Rock Hill has tried to "revitalize" the downtown area off and on since the 1970s, but it has never managed to attract enough businesses to do so. I can't think of one part of town where you could live and walk comfortably to stores, shops, etc, so that's nice that in Gastonia you are able to do that. 

I'm watching the development in this area with great interest...

@Rachel N. there are many programs in place now. one small one for example is all brand new trees and benches which have been installed along main ave. another is the FUSE project which may include a new Grizzlies baseball. They broke ground on that earlier this year. 

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@Brian Orr@Tyler Watts@Ruben Guerrero

Great thread!  I am a flipper/ buy and holder in Charlotte who is looking to get into the multi-family game.  Ruben mentioned getting together in early November, did this happen yet?  If not let me know as I would love to meet you all and talk about the region and multi-family opportunities.  

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