Newbie = Wants to know about Investing In NC

North Carolina Real Estate Q&A Discussion Forum
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Newbie = Wants to know about Investing In NC

Sam Rane
Member since 2021 · 4 posts · 3 votes

Hello Everyone,

I'm new to this forum and new to investing. a little bit about me, i'm 38 years old male married no kids, I currently live in NC specifically in Raleigh area, and i am looking at diving into NC housing market but i'm not sure where to start exactly. I wanted to know which option would be best for someone like me "a Newbie" and how to actually get started in Real Estate? Should i get a Single Family House (3 bed 2 bath) as a 1st property and rent it out OR get a Duplex ? I'm looking for cash flow and gradual appreciation or maybe mix of the two. My goal is to start small like invest into home/s between 80k-100k and grow my portfolio...

Some of the questions i have are:

1. is the NC real estate market promising ?

2. Is it risky/or safe to jump into a duplex as a first property ? Or a SFH would be a best option?

3. Where in NC should i start looking for houses under 100k ? Name of city/or Town?

4. Is it easy to rent the property in NC?

5. Do i need to own an LLC ?

6. Do i need to hire a PM to handle the property ?

Any comments/help is appreciate it, thank you all!

Sam

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Jason E. Smith
Contrarian Investor · Greensboro, NC · Member since 2016 · 219 posts · 174 votes
5y

Sam,

Welcome to BP and real estate investing. I’ll give my free advice to your questions:

1. is the NC real estate market promising ? For the most part, yes. I would be cautious about buying what appears to be deals in small towns that have one or two major employers because in the event those employer(s) leave who will your tenants work for and how far will they have to travel for work.

2. Is it risky/or safe to jump into a duplex as a first property ? Or a SFH would be a best option? Depends on your goals. SF has more buyers if you're wanting to sell down the road, but a duplex offers an offset to expenses when one tenant leaves. So there's pros and cons to each.

3. Where in NC should i start looking for houses under 100k ? Name of city/or Town? Eh, I think you’re making a mistake in focusing on low price. You need to consider who your tenant will be. You may find something for say $90k in a rural location that rents for $700 a month. But that’s a much different tenant that say something that rents for $1,500 a month in a better location. Just think about what life will be like with each tenant in your portfolio.

4. Is it easy to rent the property in NC? Any property will rent, it’s just at what price.

5. Do i need to own an LLC ? No, if you try and buy in an LLC you'll have to use commercial lending which are different terms and conditions.

6. Do i need to hire a PM to handle the property ? Again, depends on your goals. Some people like self managing and they want a dozen or two houses to pay for their retirement. That’s one strategy. Some people want to scale and have hundreds of houses or they don’t want to deal with day to day operations so they use a PM. Me personally, I’ve never self managed, I’ve always allowed professional managers to take care of the properties. I think if you buy a cheap house and you self manager you’ll have a higher risk of creating headaches, but that’s just my opinion.

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  • Jeremy KaplanPro Member
    Real Estate Broker · Raleigh, NC · Member since 2017 · 18 posts · 7 votes
    5y

    @Sam Rane happy to help here in the Raleigh Market and more than likely the rest of the greater Triangle. Let’s connect!

    0Reply
  • Jason E. Smith
    Contrarian Investor · Greensboro, NC · Member since 2016 · 219 posts · 174 votes
    5y

    Sam,

    Welcome to BP and real estate investing. I’ll give my free advice to your questions:

    1. is the NC real estate market promising ? For the most part, yes. I would be cautious about buying what appears to be deals in small towns that have one or two major employers because in the event those employer(s) leave who will your tenants work for and how far will they have to travel for work.

    2. Is it risky/or safe to jump into a duplex as a first property ? Or a SFH would be a best option? Depends on your goals. SF has more buyers if you're wanting to sell down the road, but a duplex offers an offset to expenses when one tenant leaves. So there's pros and cons to each.

    3. Where in NC should i start looking for houses under 100k ? Name of city/or Town? Eh, I think you’re making a mistake in focusing on low price. You need to consider who your tenant will be. You may find something for say $90k in a rural location that rents for $700 a month. But that’s a much different tenant that say something that rents for $1,500 a month in a better location. Just think about what life will be like with each tenant in your portfolio.

    4. Is it easy to rent the property in NC? Any property will rent, it’s just at what price.

    5. Do i need to own an LLC ? No, if you try and buy in an LLC you'll have to use commercial lending which are different terms and conditions.

    6. Do i need to hire a PM to handle the property ? Again, depends on your goals. Some people like self managing and they want a dozen or two houses to pay for their retirement. That’s one strategy. Some people want to scale and have hundreds of houses or they don’t want to deal with day to day operations so they use a PM. Me personally, I’ve never self managed, I’ve always allowed professional managers to take care of the properties. I think if you buy a cheap house and you self manager you’ll have a higher risk of creating headaches, but that’s just my opinion.

    5Reply
  • Sam Rane
    OP
    Member since 2021 · 4 posts · 3 votes
    5y

    @Jason E. Smith thank you for the response, I was actually a little skeptical that I had asked too many questions but I'm really grateful for the detailed answers.

    1Reply
  • Chris Levarek
    Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
    5y

    @Sam Rane I went the duplex route in Durham, NC. I like mitigating loss of revenue if one tenant moved out and I planned to go into larger multifamily properties in my 5 year goals. I think @Jason E. Smith covered all the answers pretty well. 

    As he mentioned when discussing where to invites, "Just think about what life will be like with each tenant in your portfolio." is sound advice. As a new investor, price dictates what you often buy. However, be sure you know what you are signing up for. Lower priced properties or asset classes typically have more mgmt. issues and possible tenant issues. Not always, but just pointing this out.

    I've had great tenants and I have had not so great tenants, now owning property in Durham, Burlington and Fayetteville. We had a tenant not pay rent since last April 2020 due to moratorium in a C class property, recently evicted. Might this have been avoided at a higher tier of property, perhaps. All worthwhile considering.

    2Reply
  • Annchen Knodt
    Investor · Durham NC (and Brenham, TX) · Member since 2018 · 302 posts · 197 votes
    5y

    Hi @Jeremy Kaplan, you've gotten thorough great answers, and I remember having all these questions myself. I'll just add one point to the LLC question - lots of people (including myself) get tripped up in this question. I went the route of getting an LLC, buying in my personal name (for the great rates/terms with conventional loans), and then deeding the property over to the LLC. LLCs have expenses associated with them (which depending on the state can include annual filing expenses, and filing fees for holding properties in other states, etc), but for just getting started or owning a small number of properties , you likely do just as well to just have some extra umbrella liability insurance. If you plan on going big, it would really pay off to talk to an attorney up front and get your structure set up straight from the start. Good luck!!

    0Reply
  • Oren Kachel
    Member since 2019 · 140 posts · 24 votes
    5y

    hey , im jumping in....

    anyone have a recomendation to a property management company in (south of) Fayeteville?

    0Reply
  • Sequeya Hicks
    Investor · Durham, NC · Member since 2021 · 8 posts · 3 votes
    5y

    @Oren Kachel

    I own a property in Fayetteville. My PM is Linchpin Property Management (linchpinpropertymanagement.com). Their service area is around Fort Bragg, Hope Mills, Raeford, Sanford, Spring Lake, Fayetteville, and the surrounding area. One of the co-owners is an attorney and the other owner is a Realtor with over 20 years of experience and also teaches property management at the local community college. They charge a flat fee and have a 100% rent collection rate during COVID.

    2Reply
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