I'm an investor up in the Washington DC area, where the returns on a holding strategy are small to nonexistent...I own three condos in addition to my house, and was looking at my long term plan the other day (which I drew up in 2013) and realized it is going to be an impossibility in the northern virginia market because returns are so slim.
For example, my last deal was a 1br condo -- got it at $160k after hard negotiations, put $5k into it, and it currently rents for $1400, but there's also a $350/month condo fee. I'm netting about a hundred a month cash on a property where I had to put about $50k upfront on dp, fees and repairs. Appreciation is OK, and vacancy is almost nonexistent, but this minimal cashflow will keep me from being able to expand my portfolio. I'll note that my other properties, which i bought earlier in the cycle, are doing better, netting $300 and $230/month respectively, but I can't get any properties like that any more.
In any case, I had long been reticent about purchasing in a far off market, but I think i'm over that now (after listening to a bunch of BP and jason hartman podcasts) and I like the long term look of the jacksonville market (I also have friends down there).
Bottom line, I'm looking for stable, low vacancy SFH's in the $100-120k range, in up and coming areas, which rent for about 1%/month, and I plan on using a management company. This appears within reach in the Murray Hill area. It seems very similar to the south arlington area in northern Virginia -- where young folks who can't afford rents in north arlington (analog: riverside) go to live. Planning to spend some time in Jacksonville over christmas to explore.
My questions for the forum: Is what I'm looking for possible in Jacksonville? Is Murray Hill the right area? Are there other areas I should look into when I'm down there? I'm also happy to consider multifamily.
Thanks for guidance! Really appreciate the BP community.
I'd disagree of your assessment of the DC market. I, along with many investors have gotten rich and built quite a bit of wealth investing here. Cash flow is only one aspect of total return...and even so, I get plenty of cash flow from some of my properties....but it's really the appreciation plays that will grow your wealth in this area.
Russell thanks for your reply. I see that you're a realtor...if you can find me listings that would generate .8% to 1% rent I'd be eager to take a look...i'm interested in expanding but literally can't find anything in Northern Virginia unless I go to Winchester and even there .8% is a stretch. Not terribly familiar with Maryland but would be interested if you know of any listings. I'm open to townhouses, would rather not do condos unless there's a high degree of familiarity or trust with the HOA. Thanks again.
Here is my two cents. I have rental properties all over Maryland and Washington DC. I see that a lot of my SFH are very hot (NW of DC), Howard County of Maryland and really easy to rent. My point that condo fees and HOAs are eating up some cash, that's why I concentrate on single family in desirable locations with good public schools...
@Jonathan, feel free PM me to chat more on this topic.
Hi @Jonathan C. -
Good luck with your new investing strategy!
Your analysis comparing South Arlington/Murray Hill with North Arlington/Riverside is spot on.
Murray Hill is a pretty safe bet these days - the secret is already out. The neighborhood has seen sharp gains in appreciation and property values have dramatically increased in the past few years. I saw a news article earlier this year talking about how Murray Hill and zip 32205 ranks in Florida's top 5 for increasing values.
With that being said, some sections of the neighborhood are better than others, and there are areas where the upward potential is significantly less. Definitely check out both sides of Edgewood Ave when you come into town.
What you're looking for is certainly do-able - although whether you're buying with cash or financing is a factor, and also how much renovation you're willing to do is a big factor in what rate of return you can achieve.
I live in Murray Hill currently, and have rental properties in Riverside, Avondale, and Murray Hill. I hoped for some appreciation when I bought several years ago, but it's improved far beyond what I had expected for a relatively short time.
Thanks for your note, very helpful, really appreciate it.
Being long distance, I don't foresee being able to do a ton of improvements (as I can locally). So closer to turnkey would be ideal. Understand that lowers relative return.
Also, I get the need to do cash on a lower property ($40-50k) but you think I'd need to come in with cash on a $100 or $120k property? I can do it, but not being there makes me nervous (if I refi post-sale and have to deal with appraisals after the fact).
Welcome aboard @Jonathan C.
Don't count out the beaches area.....there are still occasional good opportunities out here if you know where to look. PM me if you'd like any help.
I have a condo, townhouse, and two single families in various parts of Jacksonville. My properties are near UNF/Town Center, NAS Jax, and U of F hospital. All are renting for 1% or more than purchase price + renovations. Although I am from Jax. I use a property manager because I am active duty military and only get home for the holidays. I think the Jacksonville market will be good for you.
I would also love to hear other investors take on the Jacksonville market. I'm in a similar area of west Florida although the population is smaller. Any big wholesalers in Jacksonville on here? If so, I would like to hear from you about that area and what kind of deals you are finding.
The majority of housing stock in Murray Hill is around 70-90 years old, so most of the time you'll be paying top dollar for someone else's flip if you want turnkey; generally those don't make profitable rentals.
Anything under $70k will definitely go cash; an unrenovated 3/2 around $100k-$120k will also likely go for cash, since renovated 3/2s are selling around $200k lately.
In general, the better the deal, the more likely it will be a cash sale.
@Jonathan C. I can get you what you are looking for, but only sometimes. I do a lot of stuff in Front Royal. I don't often get to 1% anymore, but sometimes. If you are looking for something with Cashflow, and some decent upside its a good place. Its stable and growing. PM me if you want some details. Got two single families being sold together right now that are 80k each and rent for 800 a month.
Welcome to Bigger Pockets. You are at the right place to continue to learn about real estate investing.
Hi @Jonathan C. , I work in the turnkey business and regularly help investors acquire properties in Jacksonville. Happy to assist if you'd like to have a conversation. Good luck!
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