I have been driving up and down the beltline for the past few years searching out the best single family home investment prospects in Raleigh NC. One thing remains the same - they are available and affordable.
The Raleigh area has homes that an investor can acquire for $100,000 and less with immediate equity and cash flow potential. The homes are available, but the ones priced competitively, in good neighborhoods with "band aid" repairs go fast. The Raleigh market is not like California, Florida or Michigan. We are finding multiple bid situations on these listings and they are going for full asking price or more. So, if the bank, seller or gov't agency has dropped their price to 1/3 or more off repaired value, buyer's should be prepared to offer list or list+ on a good property if they want to succeed. Non cash investors should be prepared to compete with cash buyer's with a higher offer. Our market, like most, has suffered the last few years. Unlike other areas though, we did not experience the quickly increasing values creating a "bubble". Distressed homes here will not go for 65-55% of their oringinal value.
The North/east areas of Brentwood, Starmount, Berkshire Downs, Skycrest, Smoketree etc... are good areas to consider in the $75,000-$150,000 investment range. The north east area is an easy commute to downtown Raleigh and close to Triangle town center. Ex: In Smoketree I recently viewed a 1420 sf 3/2 detached Dept of VA foreclosure home. It was listed for $82,000 with an after repair value of about $130,000. Rental rate would be $1,000/mo. The repairs were @ about $8,000. So, at full offer plus repairs, cost of money would be about $650-700/month at current investor interest rates. That scenario offers immediate $40,000 in equity and $250-300/month cash flow - plus tax benefits (for now)!
The South east area of Raleigh has great income property potential, access to great magnet schools, neighborhood parks, and a lot of homes available for renovation. Some of my favorite neighborhoods include Farmington Woods, Worthdale, Longview Park (close to Wake Med), and NCSU area. Deals can be found under $70,000 and with repair, will rent for $700-$900 per month offering immediate cash flow and tax benefits. Several of these neighborhoods are on a bus line which is a great asset in the rental market.
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