Rental Property Investor · Charlotte, NC · Member since 2017 · 23 posts · 34 votes
7y
Rocky Mount is a unique market for investors.
The economy has been struggling for the past 10+ years. One of the highest unemployment rates in the state. Will this turn around? There are positive signs but it’s too early to tell.
The population has been decreasing every year for the past 10 years. Will this trend turn around soon? Conventional wisdom says to invest in growing markets. Investing in RM now means that you’re betting that a turn-around is coming soon.
Half of Rocky Mount is in Nash County. The other half is in Edgecombe county. The dynamics are different in each market so be conscious of that.
Rocky Mount is much more of a renters market than larger NC cities. (% renters is higher on Edgecombe side than Nash County side)
A significant portion of the housing stock is very old.
Rent to price ratios and cash on cash returns for the market tend to be very high relative to larger markets in NC. This is a blessing but can also be a curse if you’re not careful. An investor coming in from another market can look at their first deal in RM and think they have a steal based on traditional metrics…..only to find out that they overpaid significantly.
There are lots of deals that offer great cash flow in Rocky Mount. Most of these are very old or in underperforming parts of town that I mentioned above. One thing to keep in mind is that if you invest in the very old properties or in less desirable parts of town, the only buyers that you’ll find when it’s time for you to sell will be investors—no homeowners. Those investors will be expecting the same “steal of a deal” that you were looking for so keep this in mind when you run your numbers and are forecasting future sales price. Be very conservative on appreciation estimates. I’m fairly conservative, so I assume low or no appreciation in RM when I run my numbers.
I’ve found that you can be much more aggressive on rental rates than on appreciation.
Some areas have flood risks so do your homework. Use the FEMA website to assess the risk for each property your research. This is usually step # 1 or 2 for me.
These are some of my observations. I tried to focus on my factual points/considerations and allow you to form your own opinion. My overarching opinion is that investing in Rocky Mount has a lot of potential. Your analysis will result in great metrics on paper. Those theoretical numbers can be achievable if you do sufficient due diligence…….but they can also turn into a nightmare if you’re not careful. So make sure that either you or your agent are very knowledgeable about the dynamics of the market. Good luck!
Rental Property Investor · Everywhere, USA · Member since 2012 · 689 posts · 525 votes
7y
Hi @Tom Keller welcome to the Raleigh subforum. About 5 years ago I went pretty heavy on researching Rocky Mount and thought there was potential. But I ultimately didn't pursue anything because at that time there was enough happening in the Triangle to keep me busy.
If anyone else is currently active in Rocky Mount, I would love hearing their thoughts too.
Contractor · Knoxville, TN · Member since 2018 · 77 posts · 44 votes
7y
I was there. An attorney spoke on a number of issues re: long term rentals, mostly from the perspective of working for the owners of said properties. Things to do, NOT do, avoid, look out for etc.
Was well worth attending. Good turnout, maybe 40 or so folks.
Wholesaler · Rocky Mount, NC · Member since 2018 · 30 posts · 6 votes
7y
Awesome networking guys! I can use some help understanding how to go about wholesaling in RM or Eastern North Carolina. Could one of you reach out with guidance. I missed the meeting but plan to make the next one.
Lender · Raleigh, NC · Member since 2012 · 955 posts · 639 votes
7y
Rocky Mount is currently much more of a B/H market than a F/F market. The city is working to bring in businesses, and has some promising prospects. The Mill (right near the river) has been / is being revitalized, primarily on the shoulders of Jim Goodman (CEO of Capital Broadcasting) who was the force behind the revitalization of Durham, NC near the ballpark and DPAC center. Coincidentally, my lending partner and I are spending the day tomorrow in RM to look at a couple larger opportunities and site visit a few of the properties where we provided loans.
Residential Real Estate Broker · Greensboro, NC · Member since 2016 · 15 posts · 7 votes
7y
I worked in RM for several years ... city has fallen down pretty hard. It is a city of the have and have nots. Personally I would not invest there unless I lived there and really knew locations well but that's the conservative me.
Rental Property Investor · Charlotte, NC · Member since 2017 · 23 posts · 34 votes
7y
Rocky Mount is a unique market for investors.
The economy has been struggling for the past 10+ years. One of the highest unemployment rates in the state. Will this turn around? There are positive signs but it’s too early to tell.
The population has been decreasing every year for the past 10 years. Will this trend turn around soon? Conventional wisdom says to invest in growing markets. Investing in RM now means that you’re betting that a turn-around is coming soon.
Half of Rocky Mount is in Nash County. The other half is in Edgecombe county. The dynamics are different in each market so be conscious of that.
Rocky Mount is much more of a renters market than larger NC cities. (% renters is higher on Edgecombe side than Nash County side)
A significant portion of the housing stock is very old.
Rent to price ratios and cash on cash returns for the market tend to be very high relative to larger markets in NC. This is a blessing but can also be a curse if you’re not careful. An investor coming in from another market can look at their first deal in RM and think they have a steal based on traditional metrics…..only to find out that they overpaid significantly.
There are lots of deals that offer great cash flow in Rocky Mount. Most of these are very old or in underperforming parts of town that I mentioned above. One thing to keep in mind is that if you invest in the very old properties or in less desirable parts of town, the only buyers that you’ll find when it’s time for you to sell will be investors—no homeowners. Those investors will be expecting the same “steal of a deal” that you were looking for so keep this in mind when you run your numbers and are forecasting future sales price. Be very conservative on appreciation estimates. I’m fairly conservative, so I assume low or no appreciation in RM when I run my numbers.
I’ve found that you can be much more aggressive on rental rates than on appreciation.
Some areas have flood risks so do your homework. Use the FEMA website to assess the risk for each property your research. This is usually step # 1 or 2 for me.
These are some of my observations. I tried to focus on my factual points/considerations and allow you to form your own opinion. My overarching opinion is that investing in Rocky Mount has a lot of potential. Your analysis will result in great metrics on paper. Those theoretical numbers can be achievable if you do sufficient due diligence…….but they can also turn into a nightmare if you’re not careful. So make sure that either you or your agent are very knowledgeable about the dynamics of the market. Good luck!
St. Louis Area · Member since 2019 · 4 posts · 9 votes
7y
Hi BP - first time poster... just getting started on this journey...
Hannah, I'm from Rocky Mount, my parents and 2 siblings are still there... I lived there for 18 years on both the Edgecombe and Nash sides. We lived through the 'Floyd Flood' of '99 and the huge downturn of the city afterwards (it was already heading down, the flood put some finishing touches on it.)
I'd approach the city very carefully because if people are moving there, I'm honestly not sure what for... In my firsthand opinion, RMt's better days are in the past:
Used to be a center of tobacco industry in eastern NC - the 'Golden East' (even the mall is named Golden East Crossing)
Used to be a thriving hub for textiles (literally days after NAFTA was signed, the textile plants closed)
Used to have headquarters for Hardee's (it's where Hardee's began)
Used to be a banking center of Eastern NC - People's Bank merged with Planters Bank to be Centura Bank; RBC bought Centura to make RBC Centura (that's where I worked, before and after RBC)... that didn't last, as PNC bought it out; I think they maintain a presence there, but a much smaller one
That said, the real estate market is on the cheap side, and if you have a tenant in hand looking for a place there, then maybe... but also check out other things like the crime rate per capita, medium income, etc... I believe it's the worst or in the top 5 for murder per capita https://www.cbs17.com/news/rocky-mount-murder-rate...
Thanks for your detailed feedback. I know a number of investors who have had good success investing in Rocky Mount. I'm interested in doing more research and seeing how the city develops in the near-term and long-term.
Rental Property Investor · Raleigh, NC · Member since 2009 · 90 posts · 52 votes
7y
I would HIGHLY recommend going to the Rocky Mount TREIA event to get the true vibe of what is happening there.
Every TREIA meeting in Rocky Mount is packed! They are held inside one of the most active Rocky Mount investor-owned buildings: Station Square. Active investors are all over this town. I can personally attest to having friends who have in the last 18 months purchased 15 + downtown commercial buildings, 150+ single family homes, and many multifamily units. My wife and I bought two commercial properties on Main St (Music City & Lights buildings). We are currently doing full gut rehabs on both buildings financed by a local Rocky Mount bank. We will have two 2000sqft+ luxury lofts on the second floors and two commercial spaces on the bottom. We plan to attract restaurants on the bottom of each of these buildings.
Rocky Mount just debuted their 165,000 sqft indoor Event Center which can seat 4000+ people. It is literally 2.5 blocks from my buildings. That will become an economic powerhouse of the downtown area. The Event Center is NCAA certified, can host 16 volleyball courts, 8 basketball courts, music concerts, and has a video arcade, a ropes course. All of this is walkable to downtown.
Rocky Mount Mills was mentioned in previous comments but I just want to reiterate the impact they are having. My wife and I toured the grounds about a week ago. It is fascinating. Not only have they purchased entire streets and renovated all the houses (front porch lawn chairs and kegerator included in all houses), they have 60+ condos they are currently renting/renovating inside the mill, and they have A COMMUNITY OF 20+ TINY HOUSES they will be renting out soon.
Again, visit the TREIA meeting if you are interested in Rocky Mount. The movers and shakers are not always on Bigger Pockets :)
TREIA this month it is at 5:30pm, Wednesday, February 20, 2019
Developer · Cary, NC · Member since 2016 · 98 posts · 53 votes
7y
HI @Tom Keller , I have been investing in RM for 3+ years now. I can tell you that I've seen interest grow exponentially in that time. All the reasons @Andrew Clark mentioned are spot on. Come to the meeting on the 20th. You will find it educational.
Property Manager · Rocky Mount, NC · Member since 2016 · 50 posts · 35 votes
7y
Single family homes are good to me - my tenants are excellent and have remained in the homes for years; if you desire long term, stable tenants... single family is definitely a great way.
Rental Property Investor · Raleigh, NC · Member since 2017 · 9 posts · 5 votes
7y
@Andrew Clark, @Milan Mehta, and @Necho Williams, thank you for the positive feedback and information in regards to Rocky Mount. I was born & raised there (moved out west after high school, and then back to NC/Raleigh five years ago) and am so happy to see the growth and revitalization it has been experiencing. My husband and I are new to RE investing and are looking towards focusing some of our efforts in the area. I am planning on going to the upcoming TREIA meeting in May and hope I will have to opportunity to meet you all. Thanks for believing in my hometown.
The economy has been struggling for the past 10+ years. One of the highest unemployment rates in the state. Will this turn around? There are positive signs but it’s too early to tell.
The population has been decreasing every year for the past 10 years. Will this trend turn around soon? Conventional wisdom says to invest in growing markets. Investing in RM now means that you’re betting that a turn-around is coming soon.
Half of Rocky Mount is in Nash County. The other half is in Edgecombe county. The dynamics are different in each market so be conscious of that.
Rocky Mount is much more of a renters market than larger NC cities. (% renters is higher on Edgecombe side than Nash County side)
A significant portion of the housing stock is very old.
Rent to price ratios and cash on cash returns for the market tend to be very high relative to larger markets in NC. This is a blessing but can also be a curse if you’re not careful. An investor coming in from another market can look at their first deal in RM and think they have a steal based on traditional metrics…..only to find out that they overpaid significantly.
There are lots of deals that offer great cash flow in Rocky Mount. Most of these are very old or in underperforming parts of town that I mentioned above. One thing to keep in mind is that if you invest in the very old properties or in less desirable parts of town, the only buyers that you’ll find when it’s time for you to sell will be investors—no homeowners. Those investors will be expecting the same “steal of a deal” that you were looking for so keep this in mind when you run your numbers and are forecasting future sales price. Be very conservative on appreciation estimates. I’m fairly conservative, so I assume low or no appreciation in RM when I run my numbers.
I’ve found that you can be much more aggressive on rental rates than on appreciation.
Some areas have flood risks so do your homework. Use the FEMA website to assess the risk for each property your research. This is usually step # 1 or 2 for me.
These are some of my observations. I tried to focus on my factual points/considerations and allow you to form your own opinion. My overarching opinion is that investing in Rocky Mount has a lot of potential. Your analysis will result in great metrics on paper. Those theoretical numbers can be achievable if you do sufficient due diligence…….but they can also turn into a nightmare if you’re not careful. So make sure that either you or your agent are very knowledgeable about the dynamics of the market. Good luck!