Raleigh-Durham Real Estate Blog

Raleigh-Durham Leading the Pack in Investment Opportunities in 2008!

January 4th, 2008 10:12 PM

Happy New Year Fellow Investors!

I thought it appropriate to share some joy in the midst of all of the "reported" economic gloom in the US. Good news... Raleigh-Durham is weathering the storm quite well, and the hiccup in the national real estate market seems to have largely passed over this vibrant metro area.

The good news seems endless, and includes continues employment growth, and a strentghening rental market. These items are a plus for investors building portfolios in the Raleigh-Durham market.

While housing starts are down in the Northeast, West and other regions, they are up in the South. This is likely due to the positive outlook for appreciation in this region, along with affordability, an influx foreign direct investment, and local economic and employment growth. Read more on these items at:

http://www.businessweek.com/the_thread/hotproperty/archives/2007/09/rocky_market_ma.html?chan=search

Although Raleigh, Durham, Chapel Hill and surrounding areas make up what is known as the Triangle, each city is very distinct and has different norms, especially when it comes to real estate characteristics and pricing. All 3 offer VERY solid investment opportunities. Durham, however - which is home to Duke University the new Southpointe Mall Commercial District, a revitalizing downtown, and Research Triangle Park - is pulling ahead of the pack and becoming known as a great location for bargain real estate buys. Read more at:

http://images.businessweek.com/ss/07/09/0918_bargains/index_01.htm

Now if you're anything like me, there is no such thing as "too much information". I have to admit, I hoard data to a certain extent but then again, I am a techie at heart, so online research is a must in my day-to-day routine. I've gathered much of this information together for the benefit of my clients and others interested in this market. Feel free to visit www.tiffanyelder.com/TriangleMarketFAQ for a range of information and market data to round out your understanding of the area.

Once again, Happy New Year and Happy Investing!

--Tiffany
www.tiffanyelder.com

Posted by Tiffany Elder on January 4th, 2008 10:12 PMPost a Comment (0)

Subscribe to this blog

Durham, NC - The Hidden Gem

November 29th, 2007 1:09 PM

North Carolina is becoming well-known at the new hot spot for real estate investing. The area is a cluster of cities, and smaller townships including Raleigh, Cary, Durham, and Chapel Hill and is home to several universities and business campuses.

Most individuals are familiar with Raleigh, as it is the state capital and has gathered quite a bit of media attention. Savvy investors, however are looking at neighboring Durham as well and are benefitting from more attractive pricing and appreciation projections.

CNN Money recently posted its local forecasts for this metropolitan area. Unlike many US markets, both Raleigh and Durham MSAs are projected to have positive appreciation in the upcoming year. The surprise is that Durham (Raleigh's NW neighbor) is expected to outperform Raleigh in both 2008 and 2009. This is likely due to the lower median home price, which makes it an easier market to navigate for budding investors. In addition, Research Triangle Park (RTP), which is located in South Durham is the nation's largest research park and is on the upswing. More about RTP can be found at http://www.rtp.org/main

All in all, a solid portfolio mix is the key to successful investing. This means a mix of property types and locations. So, for those of you considering investment opportunities in North Carolina, be sure not to overlook Raleigh AND Durham for your next acquisition!

Visit the CNN site for more info on the 2008-2009 forecast:
http://cgi.money.cnn.com/tools/homepricedata

Happy Investing!

Posted by Tiffany Elder on November 29th, 2007 1:09 PMPost a Comment (0)

Subscribe to this blog

Real Estate and Investing Q&A

October 12th, 2007 12:19 PM

Question 1: "I had plans to invest in the real estate market but lately the news stories about its poor performance has me a bit concerned. Is now a still a good time to invest in real estate?"

Real estate markets are local, so the answer to this question depends on where you live. Much of the recent press about declining real estate markets has focused on California, Florida, New York and other high-dollar locations that experienced a steep (double-digit) incline in appreciation over the past 5-6 years. Other markets, including Texas, North Carolina & Utah are still moving strong.

One thing to keep in mind is that it is always a good time to invest in real estate, you just have to adjust your investing criteria to meet what the market is doing. When most people think of investing nowadays, they think of “flipping” and “rehabbing”. This is not the only option for investors. In addition, given the current market, flipping will likely not offer as solid a return as other investing mechanisms. For example, the current trend in the US is that the market has slowed down and many of the exotic mortgage programs that prevailed only a year ago are now extinct. For investors, this presents an opportunity. Fewer qualified buyers, means less demand for housing. Less demand for housing means sellers will have to be more flexible in the price and terms they will require to sell their home. More flexibility from sellers means better deals for investors. Given that real estate is cyclical (markets typically follow 8 year cycles), buying in a buyer’s market will ensure a bargain-basement price for an asset that, over the upcoming years, will likely rebound and perform very well. In addition, many would-be new homebuyers are not able to find financing because of the mortgage market meltdown. These buyers will therefore remain renters for a while longer. This means that rental property owners will fare very well in upcoming years.

So keep in mind, not to think short-term when it comes to real estate. Given the locality and cyclical movement of real estate, you can still find very good deals that will set you up for early retirement IF you’re able to think outside the norm and learn your market.

Question 2: "I am interested in starting an investment group among my friends. Should we seek professional help to get things started? If we try to teach ourselves as we go along, what sort of 'newcomer' mistakes should we try to avoid?"

Absolutely. Unless one of the members of your group is well-versed in the type of investing you’re interested in (stock market, real estate, etc…), you will need to bring in this expertise in from the outside to lower your learning curve and get you started on the right path. A few additional points to consider:

Make sure everyone in your group is on the same page, and put all of your agreements and goals in writing. A common mistake that friends make is relying too much on their friendship in money and business matters and overlooking some of the smaller items at start-up. This is the easiest way to kill a friendship, because money matters quickly become personal when disagreements arise among friends. Visit The National Association of Investors Corporation (NAIC) website and pick up a book on the topic of starting an investment group as a first task for your group. Their tried and true advice has been used by thousands of investment groups over the years and will help to get you started on the right track.
Don’t get attached to the aesthetics of a property or stock investment if the numbers don’t work. Numbers don’t lie. No matter how much you like an investment, if your calculations show that it will not make a good investment, no amount of tweaking will fix it. Move on to the next one.
PLEASE don’t take what you read in some of the larger financial publications as gospel when it comes to investing. For example, that “gem” of a sock that no one knows about is no longer an unknown gem by the time you pick up the magazine. By then, millions of others are aware of it and the price has probably adjusted to account for this. Real estate is a bit slower to react given the time involved in a purchase, but keep the same in mind. Many of those headlines are put there to sell the magazine, and you’d probably perform just as well some of the “experts” in these publications, with your own research and that of an investment professional at your side.

Question 3: " I recently graduated and started my first job. I know that it is important to start saving and investing for the future early, but where should I focus my attention now that I am at the beginning of my career?"

Ok, I feel a long response coming, so let me get comfortable. I’m so glad you asked this question, as it is one of the concerns many recent grads have when stepping out into the real world. (I had the same concern many moons ago!) Although I typically focus my advice in the realm of real estate investing and homeownership, given the poor financial investment advice that dominates the air and television waves, I’ll make an exception for this one. Although I am not a financial advisor, some things just make good common sense, so let’s cover a few of them…

Focus is a good thing. When it comes to financial independence, however, balance is the idea to keep in mind as you start out in your career. This means not forsaking savings for investing and vice-versa. You may have heard that you should not invest until you have 6-9 months of living expenses saved in a savings or money market account. This will ensure that you have a comfortable “cushion” in the event that you are injured, lose a job or are otherwise unable to work. On the other end of the spectrum, you may have heard that you should immediately purchase a home and/or other assets at the start of your career. Given that real estate values generally go up in stable markets (like the Raleigh-Durham market has in recent years) you should jump in right away and benefit from getting in early.

In actuality, both of these extremes may leave you at a loss. Focusing only on saving 6-9 months of living expenses, can, depending on your quality of life, take you a year or more. If this is your sole focus, you will have missed out on a full year’s worth of value increase and tax write-offs in your local real estate market. (Remember, you can write off the interest portion of your home mortgage, which translates into a smaller tax bill for you at the end of the year). Plus, with the current trend of regular increases in interest rates, you’ll likely pay a higher interest rate on your mortgage (which translates into a higher payment) than you would have a year earlier. On the flip side, purchasing real estate without having some type of cushion can be considered reckless. Unless you have long-term disability insurance and at least a few months set aside, hold off on the larger purchases (this includes new car purchases and leases as well).

I commend you for getting your mind in gear to save and invest so early on. Many of your peers will undoubtedly set this aside for the later years and miss out on the benefits of starting early. Given that your case is unique to your specific situation, I advise taking on a financial advisor to keep you on track. As a matter of fact, I have an appointment with mine later today. Keep in mind that financial advisors are compensated in different ways so be sure to discuss this with them upon your initial meeting (which they will usually offer for free). In addition, following are a few quick do’s and don’s to follow as you get started:

DO:

Start to save right away. It doesn’t have to be overwhelming… $100 per month split evenly between a mutual fund investment earning the historic average of 9% per year, and a money-market account earning 5% a year will land you with over $90,000 in a mutual fund and over $40,000 in cash in 30 years. Now I’m sure everyone can find an extra $100 a month to make an extra $130,000!
Investigate some of the online lenders who offer higher-than-average savings account rates. ING Direct, Emigrant Bank and HSBC are a few that come to mind. Since these banks have few, if any brick-and-mortar locations, they pass their cost savings to you in the form of higher returns on your savings accounts. You may be able to have your savings amount automatically deducted from your check every month and sent directly to your savings account.
Interview a few financial advisors and start out during your first 3-4 months of work with the goal of saving as much as you can in a savings or money market account. This will set you up for success when you do decide to invest in larger assets (real estate included) given that these may require a small out-of-pocket expense up front.

DON’T:

Overdo it when the checks start coming in by buying flashy, non-appreciating assets like cars and other toys. These assets go down in value over time and often, individuals find themselves OWING more on the asset than the asset is actually worth down the line.
Put off purchasing a new home or investment property if you are in a market that is on a gradual upswing. Raleigh-Durham is one of these growing markets and has seen steady growth over the years. If you are in a NY, CA, FL or similar market, speak with a few real estate brokers in the area to gauge what the market is doing before diving in.
Set aside your intent to save and invest. “I’ll start next month” is an all-to-common phrase that eventually lands many of our counterparts with no savings and no assets decades down the line. Once you fall into that mantra, it’s hard to get out. Set your mind to start saving and investing TODAY, and make your investing commitment an amount that won’t be overwhelming for you. If it feels like you have to deprive yourself of something else in order to do it, you won’t maintain it, so take a close look at your finances and decide what amount works for you.

Posted by Tiffany Elder on October 12th, 2007 12:19 PMPost a Comment (0)

Subscribe to this blog

Real Estate Investing Q&A

October 5th, 2007 12:06 PM

Question 1: "I am interested in purchasing some investment property. What considerations should I keep in mind as I decide between targeting single family homes versus multi-unit (i.e. duplex, two-flat, three-flat etc.) properties?"

There are pros and cons to both single-family and multi-family rental properties:

Single Family

Pro: These properties tend to appreciate well if located in a desirable location. In addition, upon reselling the property down the line, you will likely have a much larger pool of potential buyers, which can make for a quicker sale. Keep in mind that your potential pool of buyers will include both investors and individuals who wish to use the home as their residence.

Con: A single-family home will typically have only 1 tenant (except in the case of a rooming house). This can be a drawback if the property is located in a slow-renting area, given that the exit of one tenant will result in the loss of 100% of rental income until another tenant is found.

Multi-family

Pro: A multi-family rental property has several tenants and therefore will not result in the loss of 100% of rental income when 1 tenant vacates. Often the rents on the other units will be enough to cover most, if not all of the underlying mortgage payment until a new tenant is found for the vacant unit(s).

Con: Resale of multi-family properties (3 units and up) require a larger down-payment than single-family units or duplexes. At the time of this writing, 5% down-payment residential funding is available for 1-2 unit rentals, while 15-20% is the minimum down-payment for a 3-4 unit. Any property over 4 units will require commercial funding, which is another discussion in itself.

I’ve found that many new investors find 1-2 unit rentals easier to start with given the availability of financing for these types of purchases. In the ideal case, an investor’s portfolio will have both single-family and multi-family rentals. The US tax laws have many loopholes available to property owners, one of which allows the owner of a property to sell without realizing an immediate tax hit on the gain (IRC Section 1031). This mechanism can be a strong ally in growing your investment portfolio. Leveraging this resource alongside a portfolio with easy-to-sell 1-2 unit rentals and larger multi-family properties can be a powerful resource for buy-and-hold investors.

Question 2: “A couple of friends and I have discussed pooling our funds to purchase some investment property. How should we organize ourselves to make things, such as the mortgage, taxes, and hopefully the future addition of new properties to our portfolio, go smoothly?”

I’m glad you’re considering pulling your group’s resources together to invest in real estate. Keep in mind that working with friends can make for a fun and fulfilling learning experience, or it can end a friendship, if handles inappropriately. There’s quite a bit of legwork you need to do upfront to prevent the latter. The key is to be very open with your partners up front to avoid disagreements down the line.

Discuss each of your goals to be sure these are in line. If one of you wants to flip and other wants to buy-and-hold this conversation will offer an early indication that you may not want to venture into this partnership because is unlikely your actions and expectations will line up.
Put everything in writing upfront. Ideally, you’ll speak with an attorney to set up an entity (LLC, Corporation) or a limited partnership (LP) to invest through. The operating documents for these will spell out almost everything you’ll need to know up front (roles, initial investments and other monies required form each partner) the goal of the entity, etc…
Plan your exit are the outset. Don’t leave this part undone. When will your company dissolve? What requirements does the group require before a partner can exit? Will there be penalties if a partner decides to pull out early? Given that you are pooling your money together, it might not be fair to allow partners to exit early on because if will leave the remaining partners with a heavy financial burden. How will liability and profit be split between you?
If you plan to purchase property directly into your entity (LLC or Corporation), you’ll need to speak with a commercial banker. Residential lenders will not allow a buyer to purchase a property in the name of a company, because they want to have direct recourse against the owner in the case of default. Commercial lenders will allow this (but will likely require a personal guarantee from each partner) but commercial funding typically has higher rates and higher down-payment requirements, so depending on your combined financial strength, there may a drawback to this avenue if you are just starting out.
Speak with a CPA - as a group on behalf of the entity, and also individually with your personal CPA/tax preparer. The way you set up the partnership (C-Corp, S-Corp, LLC with flow-through taxation, LLC taxed as a corporation, LP, etc…) will have a direct impact on your tax burden, so plan accordingly.

These are just a few items to consider. A lengthy and open conversation with your partners is the best place to start. Then speak with a CPA, corporate attorney (if you choose to set up an entity) and any other professionals related to your cause. This will be time consuming, but trust me, it will save a lot of headache down the line. Other than that, sharing the research and learning process with your friends can speed up the learning process and give you an outlet to share ideas and concerns with others who are on the same page, which is a benefit many individual investors don’t have. Keep me posted on your progress and good luck!

Posted by Tiffany Elder on October 5th, 2007 12:06 PMPost a Comment (0)

Subscribe to this blog

Raleigh Facts - Bet You Didn't Know...

June 18th, 2007 12:18 PM

The Raleigh-Durham Area real estate market is on a definite upswing and for more than 1 reason. The following article was taken directly from the Raleigh Convention and Visitors Bureau and lists may of these accolades Visit http://www.visitraleigh.com/media/accolades.html for the full article.

Raleigh Ranks Right on Top

RALEIGH, N.C. (June 2007) -- North Carolina's Capital City area certainly makes the grade when it comes to positive accolades. Over the past five years, numerous third parties have praised Raleigh for its quality of life, excellent education, entertainment options and business climate. After all, Raleigh embodies, "City Life, Carolina Style." Among Raleigh's most notable accolades:

LIFESTYLE

Top 5 City for Young Singles
(Top 25 Cities for Every Stage of Your Life List)
Kiplingers Finance, May 2007

#3 Best Place for African Americans
Black Enterprise, May 2007

Top 10 – Best Place to Find A Mate
Men's Health, April 2007

Top 10 Tech Towns
Wired, January 2007

#8 Safest City (Cary)
Morgan Quinto Press, October 2006

#6 Area for Relocating Singles
Primacy Relocation, October 2006

#13 Overall Quality of Life
Business Dev. Outlook, September 2006

# 9 Health Rating
Tampa Bay Partnership, September 2006

#15 Climate Rating
Tampa Bay Partnership, September 2006

#1 Area Overall (Raleigh-Durham)
Tampa Bay Partnership, September 2006

#6 Best Cities for Singles
Forbes.Com, July 2006

#4 Best Places to Live
Money Magazine, July 2006

#3 Best City for US Bargains
Hotwire Travel Index, January 2006

Top 20 Place to Live, Work & Play
Homebuilder.com, November 2005

Top 10 Best Budget Weekend City
MSN.Com, August 2005

One of "7 Cool Cities"
Kiplingers, August 2005

#4 Best Cities for Singles
Forbes.Com, July 2005

#34 "Top 100 Places to Live" (Cary)
Money Magazine, July 2005

#17 Best Place for U.S. Running
Runner's World, July 2005

# 8 Best Place for Wireless Connections
Intel, June 2005

Five Star Quality of Life (Raleigh-Cary)
Expansion Management, April 2005

Top 50 City: Quality of Life (Raleigh-Cary)
Expansion Management, March 2005

#4 Best City for Dating (Raleigh-Durham, NC)
Sperling's Best Places, May 2004

#4 City That Rocks
Esquire Magazine, April 2004

Hottest Town in the East (Cary, NC)
Money Magazine, January 2004

#6 Most Fun City
Cranium, January 2004

#1 College Town (Raleigh/Durham/Chapel Hill) – Tier II
USA TODAY, August 2003

#10 Lowest Rents-CBD
Expansion Management, August 2003

#1 Best Place to Live
MSN House & Home, July 2003

MEETING

#20 Expo's Top 25 Bargain Destinations
Expo, July/August 2004

#3 Cost-Effective Location for Corporate Meetings
GetThere, December 2003

#10 Successful Meetings 10 to Watch
Successful Meetings, December 2003

#1 Best Place to Live & Work
Employment Review Magazine, June 2003

#9 Best City for Singles
Forbes Magazine, June 2003

#3 Best Place to Reinvent Your Life
AARP Magazine, May/June 2003

#10 Low-Stress City (Raleigh-Durham-Chapel Hill, NC)
Sperlings Best Places, 2003

Top 20 Best Urban Trails (Raleigh's Umstead Park)
Runner's World, October 2001

#4 Healthiest Metro Area in the US
Demographics Daily, June 2001

#2 Best Place to Live and Work
Employment Review, June 2001

EDUCATION

#1 School District in the Nation for Certified Teachers National Board of Teachers, January 2007

#2 Most Educated City
US Census Bureau-American Community Survey,
2003 (Released April 2005)

#2 Best Public Education System
Expansion Management, April 2005
(Raleigh – Cary)

#2 Most Educated City
US Census Bureau-American Community
Survey, 2002 (Released May 2004)

#6 Best Public School System
Expansion Management's MSA Education
(Raleigh-Durham-Chapel Hill MSA) Quotient Rankings, April 2004

2005 National Superintendent of the Year
American Association of School
(Bill McNeal, Wake County Public Schools) Administrators, 2004

#3 Best Education In The Biggest Cities
Forbes, February 2004 (Wake County Schools)

Gold Ribbon School District – Wake County
Expansion Management, December 2003

# 2 Best Place for Education
Forbes Magazine, June 2003

#1 Best City for Education
Places Rated Almanac, Millennium Edition

BUSINESS

#3 Best Jobs in the Hottest Cities
Business 2.0, May 2007

#7 Business Boomtown
Inc Magazine, May 2007

#4 Hottest Job Market for Young Adults
Bizjournals, April 2007

#1 Best Place for Business
Inc Magazine, April 2007

#1 Best Place for Business & Career
Forbes.com, April 2007

#1 Best City for Jobs
Forbes.com, February 2007

Top 50 Hottest Cities for Expanding &
Relocating Companies
Expansion Management, February 2007

Top 10 Place in the South for the Creative Class
Southpoint Business & Development, Winter 2007

#1 Best City for Women Entrepreneuers
Allbusiness.com, November 2006

#6 Most Wired City
Forbes.com, August 2006

#2 Best Place for Business & Careers
Forbes, August 2006

Named one of 15 Top Fast Cities (Raleigh-Durham, NC)
Fast Company, November 2005

#7 Top Metro for Scientists & Engineers Per Capita
Expansion Magazine, May 2005

#10 Top Metro for University Spending
Expansion Magazine, May 2005

#7 Best Educated Workforce
Expansion Magazine, May 2005

#2 Best Place for Business & Careers
Forbes, April 2005

#4 Best City for Entrepreneurs and Small Business
Gold Guide Rankings, May 2004

#5 Best City for Economic Dynamism
Gold Guide Rankings, May 2004

#2 Best Place for Business (Raleigh-Durham, NC)
Forbes, May 2004

#1 City with the Happiest Workers
Hudson Employment Index, March 2004

#3 High Value Labor Market Quotient 2005
Expansion Management, March 2004

#6 Least Expensive Midsize Metro Area for Businesses
KPMG LLP, February 2004

#1 Hottest Job Market (Raleigh-Durham-Chapel Hill, NC)
Business 2.0, March 2004

#4 Top State for New Business Sites and Facilities
Plants Sites and Parks, January 2004

#13 Hottest Cities (Raleigh-Durham, NC)
Expansion Management Magazine, January 2004

#11 Choice City for Biotechnology
Business Development Outlook, December 2003

#9 Hottest Job Growth Market 2003-2013
Business 2.0, September 2003

#7 High Value Labor Market Quotient 2003
Expansion Management, July 2003

#4 Top High-Tech City
Business Facilities, May 2003

#9 Best City for Corporate Headquarters
Business Facilities, April 2003

#3 Best Place for Business and Careers
Forbes Magazine, May 26, 2003

#1 Fastest Growing Local Online Population
Nielson/Netratings Report, February 2003

#3 Highest Mobile Phone Penetration
Telephia Report, February 2003

#10 Real Estate Market
Expansion Management, August 2002

#3 in New Biotechnology Companies in the 1990's.
Signs of Life: The Growth of the Biotechnology Centers in the US. Brookings Institute, June 2002

Top 60 Cybercity
Site Selection Magazine, March 2002

#2 City in the US for Relocation
Expansion Management, January 2002

#3 Hottest Metro
Plants, Sites & Parks, March 2002

Fastest Growing State in Venture Capital Investment
Plants, Sites & Parks, January 2002

5-Star Ranking for Best Economic Metro
Demographics Daily, January 2002

#5 for access to venture capital
Progressive Policy Institute, April 2001

#3 for access to high-tech jobs
Progressive Policy Institute, April 2001

#8 Most Wired City
Yahoo! Internet Life, March 2001

#3 for percentage of households using the Net
Yahoo! Internet Life, March 2001

#4 for broadband use and interest
Yahoo! Internet Life, March 2001

#7 State (NC) for New Facilities/Expansions in 2000
Site Selection, March 2001

#4 Best City to Start and Grow a Company in Now
Inc., December 2000

#3 Best City in the Nation for Entrepreneurship
Entrepreneur, October 2000

#6 for Directory Density (sites per 1000 capita)
Yahoo! Internet Life, March 2000

#5 for Hosts Per Capita
Yahoo! Internet Life, March 2000

#6 Hottest City
Expansion Management, January 2000

Posted by Tiffany Elder on June 18th, 2007 12:18 PMPost a Comment (1)

Subscribe to this blog

South Durham - The Triangle's Newest Real Estate Hot Spot

June 12th, 2007 2:28 AM

Raleigh, Durham, Chapel Hill, Carrboro, Wake Forest, Cary, Morrisville, Apex, Clayton.... and the list goes on.

All of these cities/townships make their home in the Research Triangle area of Raleigh Durham, which has been heralded as one of the most formidable emerging real estate markets in the US. Each of these areas has its own personality and norms (with regard to real estate), so where is the "hot spot" for real estate investors who are interested in this region in the southeast.

South Durham.

South Durham is one of a few distinct pockets of growth and development that are leading the path of growth in the Triangle. The trend started a few years back with the introductin of Southpointe Mall, the area's newest, higher-end shopping area. The mall brought with it an influx of commercial and residential developement whose pace continues to date. The newest addition is a Sheraton Four Points Hotel, an upcoming condominium development, a plethora of retail and entertainment establishments, and countles new construction developments in the immediate area.

Area residents have enjoyed solid property appreciation despite the growth in new construction, as 2 of Durham's more established and respected neighborhoods are in South Durham, just minutes from Research Triangle Park, one of the country's largest research and employment parks. Although these 2 neighborhoods were built out in the mid 1980s through the mid 1990's they enjoy higher dollar-per-square-foot property values than some newer areas elsewhere in the Triangle.

Insider's Tip -- There is a new housing development in the works in this area with prices starting under 150k...unheard of in South Durham. Although I am not a speculative investor, if the past performance of similar developments in this area is an indicator of the future of this new development, getting in on the early phases of this neighborhood should prove very formidable for investors in the know. (Feel free to reach me at tiffany@tiffanyelder.com if you'd like more information as it becomes available.)

A recent article at triangle.com outlines a bit more on this thriving area. Find out more about South Durham and other Triangle real estate hot spots at http://www.triangle.com/108/story/18594.html

Posted by Tiffany Elder on June 12th, 2007 2:28 AMPost a Comment (0)

Subscribe to this blog

Potential Challenges for the Raleigh-Durham Real Estate Market

April 20th, 2007 11:40 PM

It never fails.

A city starts up the growth curve of a formidable real estate market and local government finds yet another way to pull additional financial benefit from these changes at the expense of the homeowner.

What is Tiff complaining about, you ask?

Answer: The North Carolina Home Tax. This tax, which is currently being considered in the state legislature, would impose an additional 1% fee to the seller upon the sale of a North Carolina residence. It is, essentially, a tax on the equity in our homes.

Example: Neil and Joanna move to the Triangle for a new job and purchase a home for 200k. Neil is unexpectedly transferred for work, and they have to sell their home 3 months after their move. Well, with this new tax, not only will they incur the typical closing costs on the sale of their home (which already include a $2 per $1000 revenue tax paid to the state … $400 in our example), but they will also have to pay the state another 1% tax on the sales price (i.e. another $2100 if they sell their home for 210k). Hmmm…$2500 for the privilege of selling their home. Sounds steep to me. Visit www.itsabadidea.org for more information on the NC home tax.

Another challenge facing North Carolina home-builders and homebuyers is increased impact fees. These impact fees are typically charged to the builder or developer of a new property or subdivision to cover the additional infrastructure capacity costs (i.e. “impact”) that tend to go along with an increase in population. These may cover the cost of more road maintenance, more schools, or any of a slew of other costs. The intent is to cover the additional burden the city will have in maintaining the locality in light of the population increase.

These costs are, of course, passed on to the end-buyers of new homes by way of higher builder pricing on these properties. Seems to make sense at first glance, but after a bit of thought, does it seem fair to have new homebuyers carry the full burden of the cost to maintain a growing city that has many more current residents that will also benefit from city improvements? Every resident of the city will benefit from the roads, schools and other improvements, so it seems these costs would be better allocated across the entire population, or in some other equitable fashion.

Numerous trade organizations, including the North Carolina Realtor Association and the Association of Homebuilders are fighting for better solutions to these challenges. I’ll be sure to keep you posted.

I know, I know…

I’m usually the bearer of GOOD news with regard to the Raleigh-Durham-Chapel Hill real estate market, but I feel it’s my duty to report on both the good and the (potentially) bad. I am now stepping down off of my soapbox (temporarily), but I hope that this brief discussion has helped to keep you abreast of changes in our local market.

The good thing is that the Raleigh-Durham real estate market remains strong and very affordable despite pending changes. Even with increased impact fees and proposed home sales taxes it will be a long long time (if ever) until returns on Raleigh-Durham real estate investments suffer.

For more information, or for additional insight into the many POSITIVES of investing in Raleigh-Durham-CHapel Hill real estate, vist my website and real estate blog at www.tiffanyelder.com

Until next time...

Posted by Tiffany Elder on April 20th, 2007 11:40 PMPost a Comment (0)

Subscribe to this blog

Cashflow Opportunities Abound in Raleigh-Durham!

March 19th, 2007 7:55 PM

As a real estate broker and active investor, I often find myself looking at the market trends in other metro areas in comparison with my home market.

I am constantly in awe of the wealth of opportunities to acquire investment properties in the Triangle at very formidable prices.

Take the following examples of properties currently available for sale:

Investment #1
3-year old townhome
Price $140,000
Gross rents $1000
Annual taxes: ~$1555
Annual Insurance: $0 (included in homeowner's HOA payment)
HOA - $80/month (includes insurance and exterior maintenance.)
Cashflow: POSITIVE

Investment #2
Recently renovated Duplex (2-units)
Price $156,000
Gross rents $1370
Annual taxes: ~$1493
Annual Insurance:~ $450
Cashflow: VERY POSITIVE!

Investment #3
Quad (4-unit)
Price $120,000
Gross rents $1400
Annual taxes: ~$1585
Annual Insurance:~ $550
Cashflow: VERY, VERY POSITIVE!!!

As a whole the Triangle remains very affordable for both homeowners and investors.

If the aforementioned properties interest you, or if you'd like to learn more about what the Raleigh-Durham has to offer in the way of investment opportunities, feel free to reach me at tiffany@tiffanyelder.com.

I look forward to speaking with you soon!

-Tiffany Elder, MBA
Broker, Realtor
www.tiffanyelder.com

Posted by Tiffany Elder on March 19th, 2007 7:55 PMPost a Comment (2)

Subscribe to this blog

Triangle (Raleigh-Durham-Chapel Hill ) Resale Market Remains Strong!

March 18th, 2007 9:14 PM

Yes, the resale market in the Triangle (Raleigh, Durham, Chapel Hill) remains strong, and projections for the spring market are even more optimistic than in years past.

New construction continues its steady growth with several local and regional builders initiating projects in high-demand areas (South Durham, North Raleigh, and surrounding townships). Days on Market hasn't moved much from its 2.5 month average and inventory is in balance.

In addition, recent 3rd party praise from notable sources is spurring relocation interest in the Triangle from career seekers and retirees; two demographics that are playing a large role in the growth of this region.

First, is Forbes in their "Best Places for Business and Careers". Raleigh and Durham are both in their Top 10. Raleigh ranked #2 while Durham appeared at #8. Read the full article at:
http://www.fineliving.com/

Similarly, Durham ranked #6 on the Forbes "America's Smartest Cities" report. The city is home to Duke, North Carolina Central University, and Durham Technical Institute along with other smaller institutions.Read the full article at: http://www.forbes.com/entrepreneurs/2006/12/14/boulder-education-cities-ent_cx_ee_1215smartcities.html

All of this, and our housing remains ridiculously affordable! The average sales price for existing homes in 2006... approximately $230,000.

Opportunities for cash-flow on multi-family units are not difficult to find with reasonable 10%-20% downpayments. Take the following available properties, for example:

Cash-Flow Property #1
2-family duplex for 115k.
Gross rents $1300/month
Tenant-paid utilities.
No HOA fees

Cash-Flow Property #2
2-family duplex for 240k
Gross rents $2000
Tenant-paid utilities
No HOA fees

If opportunities like these interest you, feel free to reach me at tiffany@tiffanyelder.com for additional information.

I look forward to speaking with you soon!

Posted by Tiffany Elder on March 18th, 2007 9:14 PMPost a Comment (1)

Subscribe to this blog

Raleigh-Durham-Chapel Hill Market Trends...2006 Year in Review

March 18th, 2007 9:13 PM

In reviewing the market trends over the past 12 months in the Triangle area (Raleigh, Durham, Chapel Hill), several noteworthy items surfaced which highlight the steady growth in this vibrant metro area.

To start:

1. Resale closings of existing homes were up 11% over this 1 year period.

2. The average sales price for housing across the counties was 225k (Orange County – Chapel Hill posted the highest average price and appreciation over this timeframe).

3. New housing starts and commercial development remained strong.

Although average days on the market for typical homes in the area averages just under 3 months (~72 days), the inventory on hand continues to absorb steadily. What is the reason for this, you might ask? Well, one reason may be the steady flow of employers and job expansion in the Triangle. North Carolina is becoming known as a business-friendly state, especially for small to medium-sized firms. This business-friendly environment has supported the expansion of several smaller firms such as Healthways, which created 130 new jobs over a 1 year period and plans to add 100 more to its call center (at an average salary of 65k) in the next year alone. Likewise, Merck has constructed a new 272k sq. ft. plant in north Durham County which is expected to bring in excess of 300 new jobs when it is completed in 2008.

In addition, The Triangle is home to no less than nine educational institutions including Duke, UNC, North Carolina State University, Durham Technical institute, Shaw University, Wake Tech, Meredith College, and Peace College among others. The growth in the student, administrator and professor populations at these institutions plays a large role in supporting migration to the Triangle and provides a steady flow of professionals to sustain the real estate markets.

All in all, a very healthy year in review.

Please contact me for more information about investment property in the Raleigh-Durham-Chapel Hill area.

Posted by Tiffany Elder on March 18th, 2007 9:13 PMPost a Comment (0)

Subscribe to this blog