Is Housing Over Priced Right Now?

[Tim OConnor]

I would love to hear from all of you on this. When specifically talking about the Charlotte/NC area, are Quads over priced, under priced, or average? Quads to me are a unique beast because they almost produce enough income to be a commercial property, but not quite. What do you think?

[Jeremiah B.]

I've only been investing in Charlotte for about 10 months, but in that time, I've been rather disappointed with plexes for two big reasons:

First - there are very few to choose from.  The prevalence of plexes seems to vary a lot by market, and Charlotte is just one of those markets with very few of them. 

Second - to your point - when you can find one, they are overpriced. They are not drastically overpriced, but I would estimate that they hover right around the .8% - 1.1% rent-to-price values. This isn't horrible, but right now, I would rather have a SFR that has a total rent/cost equal to a plex. The price per square foot is also about 25% higher than SFR in the same area/age/etc.

And as a third, I've run into a few plex in-fills, where a developer put in 4-12 buildings including several 2-4 plexes.  BE VERY CAREFUL OF THESE!!!  I nearly purchased one, but back out in the due diligence period as I learned how poorly the others were being managed.

I've seriously considered having a 4-plex built as well, but ultimately were uneasy with the risk of the buy, hire a builder, own the build process.  If we could find a developer in Charlotte that included 2-4 plexes in a new community, I would hug said developer.

Best of luck, and let us know if you find a good plex deal in Charlotte - if for no other reason than to make my jealous.