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First of all, while prices are still high, I am starting to see more decent homes that don’t sell in the first week, or even two. Or even three. I wouldn’t call this a correction, but things seem to be headed that way for sure.
Secondly, this means that one can negotiate and get a (slightly) better price.
And finally, my questions:
If you could buy an investment property that would allow you to make a small profit with 40% down in Northeastern Chatham county (close to Southern Village) vs Apex, which of these two locations would you choose? And would you buy at all, or would you wait another couple of months?
PS I’ve heard about the one percent rule (rent should be at least 1% of the purchase price), but I don’t think it’s realistic in the Triangle nowadays.
First of all, while prices are still high, I am starting to see more decent homes that don’t sell in the first week, or even two. Or even three. I wouldn’t call this a correction, but things seem to be headed that way for sure.
Secondly, this means that one can negotiate and get a (slightly) better price.
And finally, my questions:
If you could buy an investment property that would allow you to make a small profit with 40% down in Northeastern Chatham county (close to Southern Village) vs Apex, which of these two locations would you choose? And would you buy at all, or would you wait another couple of months?
PS I’ve heard about the one percent rule (rent should be at least 1% of the purchase price), but I don’t think it’s realistic in the Triangle nowadays.
Nope. That's an outdated benchmark though IMO.
What type of investment would this be? Buy and hold? Part of a larger local portfolio/easier to liquidate? Something to rent out prior to moving in yourself down the road (the latter has incidentally become a relatively common practice recently as folks in other areas look to relocate here for retirement in several years)
Apex is a now-mostly-built-out full-fledged suburban town that carries a premium cost. NE Chatham is still semi-rural though poised for significant development in the near future; though it can't be certain to what degree.
The demand for a medium-high income rental will be greater in Apex; the ability to purchase low and sell higher will probably be be greater in Chatham. It all just depends on your priorities.
In conjunction with Twingle's point above.....don't expect to be able to "negotiate down" on most desirable homes in Apex.
First of all, while prices are still high, I am starting to see more decent homes that don’t sell in the first week, or even two. Or even three. I wouldn’t call this a correction, but things seem to be headed that way for sure.
Secondly, this means that one can negotiate and get a (slightly) better price.
The houses you are talking about are listed on the MLS. As an investor, those are not the houses you want to target. Why would you want to pay market value for an investment property unless you have some secret knowledge that no one else has?
And finally, my questions:
Quote:
Originally Posted by hwy17
If you could buy an investment property that would allow you to make a small profit with 40% down in Northeastern Chatham county (close to Southern Village) vs Apex, which of these two locations would you choose? And would you buy at all, or would you wait another couple of months?
As stated above, I would not be looking on the MLS for deals. You can get lucky, but that would be the exception rather than the rule. I would never put 40% down unless I had a plan in place to pull my money back out almost immediately. Why do you want to put 40% down? If you are going to buy conventionally, then I can understand 20%, but not 40%. Regarding location, I couldn't care less as long as it is a safe area. If I feel safe walking in an area at night, then I feel fine owning a rental property there. I don't care if it is Apex, Cary, Garner, Raleigh, Durham, Bunn or Dunn. I have done the long distance thing, and I would do it again, but with more restrictions in my criteria. As far as would I buy now or wait a couple of months. If a deal presents itself, then you buy. Whether you find the deal today or in September, it makes no difference. Again, your question tells me that you plan on looking for your "investment" property via conventional means. If you really think the RE market is headed south, then a couple of months isn't going to make a difference. Not really. If you aren't going to be creative in the way you go about finding deals, then you probably want to be looking out a couple of years, not months.
Quote:
Originally Posted by hwy17
PS I’ve heard about the one percent rule (rent should be at least 1% of the purchase price), but I don’t think it’s realistic in the Triangle nowadays.
Clearly, you are new to investing in real estate. That's awesome! When used intelligently, real estate can achieve anything from supplementing your retirement to making you wealthy long before retirement age. But, maybe do a little additional research and network with other investors. Join local RE investor groups that have meet ups. Good luck!!
PS I’ve heard about the one percent rule (rent should be at least 1% of the purchase price), but I don’t think it’s realistic in the Triangle nowadays.
1% rule was invented in an era with much higher interest rates, and therefore much higher yield expectations. It's even less achievable in a market like the Triangle, where housing growth has lagged job growth (creating a general shortage) and where an outsized proportion of residents are well-qualified homebuyers (i.e., stable jobs). A lot of small investors have found higher yields further in eastern NC or in the Triad.
Quote:
Originally Posted by carlito2002wgn
I would never put 40% down unless I had a plan in place to pull my money back out almost immediately. Why do you want to put 40% down?
Yeah, one of the big advantages to investing in residential RE is that high leverage is available at relatively low cost.
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