Charlotte Area Real Estate Best Buys: November 2015

More time has passed since my last investor suggestion list/blog entry than I would have preferred, but things have been quite busy. The Charlotte area real estate market remains strong, without becoming inflated or overheated. It is still quite possible to find suitable properties for “fast flip” or rent-and-hold investors—and for those with strategies somewhere in between these goals. I have said it before and I’ll say it again: the most successful investors I work with do not attempt to make every purchase or resale a “home run.” Those who do this professionally are content with an ongoing stream of “base hits” because it makes much more sense to do eight or ten deals in a year that result in a $10,000 net profit each than to insist on finding that one deal on which you make a $50,000 net profit, but which takes all year to find and/or resell. You can do the math. There is also the issue of diversifying your investments among several somewhat smaller properties, rather than putting all your eggs in that one basket that MUST make a larger profit in order to be successful.

For those of you who buy, rent and hold, there continues to be plenty of upside potential in the Charlotte market. Of course, stable areas assigned to better-performing schools are a better bet. The non-profit web site that continues to be a good source of information on public school performance is: www.NCReportCards.org. As many of you know, most REO properties do not advertise school assignment. But it is not difficult to determine which schools are assigned to a particular property. As my company motto goes: “Solid analysis identifies great opportunities.” Proper research is certainly fundamental to solid analysis.

Having said all of that, let’s get on to the suggestions for this edition of the newsletter. As always, a link to the full MLS reports (including address and photos) for each of the properties mentioned below appears at the bottom of this page. If your display shows only single line summary of the properties when you click the link, look for the tab near the top right of the page labeled “Display” and choose full report with photos. You will then be able browse through full MLS reports for each property. Here is a summary of the properties in this edition of the newsletter:

#1 – MLS 3119205 – 4BR/2.5BA Estate Sale in the Lake Park subdivision in Indian Trail. This one purports to have a new roof, and appliances convey. It has been on the market 24 days on the date of this publication. Priced at $179,000, a cash buyer might be able to get the property under contract at a price that would yield better than a 10% gross return on rental income, and provide room for steady upside appreciation.

#2 – 3059726 – 3/2.5 short sale built in 2006. This one is located in northern Monroe (reasonable commute to Charlotte). It is listed at $129,000 with a tax value of $138,650. But, as I have said many times before, beware of short sales. The seller can list the property for whatever price he thinks will get attention. The trick is in getting his lender(s) to approve the contract price. I rarely waste time with short sales on which the listing price has not already been pre-approved by the seller’s lender(s) for that reason. Also, don’t focus too exclusively on tax value as an indication of market value. Tax value may have been a good “quick and easy” indication of market value 2 years ago, and it might still be in some areas today. But the market here has improved enough in the last year or so that market value is sometimes considerably higher than tax value. There is no substitute for “pulling comps” and doing the research.

#3 – 3117015 – 4/2.5 in Matthews, assigned to Butler High School and Mint Hill Middle School—both desirable school assignments. This one probably has some condition issues and it is also a short sale, but at $123,000 it is probably well under market value. Tax value is $129,600.

#4 – 3076707 – 3/2 in the Kingstree subdivision in East-Central Charlotte, built in 2005. This is another short sale with 87 days on the market. It is listed at $105,000, with tax value of $117,400. As many of you who buy and hold rental properties know, those homes purchased in that $100,000+/- range tend to yield quite nicely because the rental price vs. total investment tends to be better. The trade-off is usually on area stability and school assignment. There is usually a reason for the low price. But some investors are motivated more by “the numbers” than by other factors.

#5 - 3106700 – 3BR/1.5 Bath home built in 1967 on .40 acre in east Mecklenburg (zip code 28215). This is a Fannie Mae REO and has been on the market 64 days. Listing price has been reduced to $89,900 with a tax value of $129,600. Some of these older 3/1.5’s can be fairly easily converted to 3//2’s by using closet space adjoining the half bath to create a small shower.

#6 – 3101346 – 3 Bedroom/2 Bath on .38 acre lot assigned to the sought-after Myers Park High School (Carmel Middle and Sharon Elementary). The home is also an REO and has 2,330 sq.ft. of HLA. It has been on the market for 110 days, but is listed at $265,000 with a tax value of $361,400. You have location here. This might make an interesting upscale flip.

#7 – 3098025 – 3/2 with 1,881 sq.ft. of HLA and a 2-car garage. This one is an Estate Sale assigned to high-performing schools in desirable Harrisburg. It is listed at $199,000.

#8 – 3105617 – 4BR/2.5 fixer in Matthews (28105), which usually means high performing schools (but we would need to check school assignment). This is a Fannie Mae REO with 92 DOM. It has been reduced to $156,900 with a tax value of $195,980.

#9 – 3121839 – 4BR/2.5 BA build in 2008 in North Charlotte. This one has 2,396 sq.ft. of HLA and is priced at $144,900. Tax value is $153,500.

#10 – 3110570 – 4/3.5 built in 1998 in northern Monroe. This one is a HUBZU “auction” property. I place “auction” in quotation marks because most of these online auctions or just a gimmick, but you can still sometimes find good values among them. Be aware that many involve a “buyer premium” that is added to the purchase price. In this case, the buyer premium is 4.5% so you would want to factor this into whatever offer you were willing to make. It has 63 days on the market (which tells you how much of a true auction this is) and is priced at $129,400 with a tax value of $148,200.

#11 – 3110090 – This is a 3BR.2.5 BA short sale built in 2005 in Saint John’s Forest in northern Monroe. It has been on the market 71 days and may have some condition issues. Remember what I said in item #2 above about the listing price of short sales, Having reminded you of that, the listing price for this one is $125,000 and it has a tax value of $144,720.

#12 – 3111197 – 3/2 on .70 acre in Kannapolis that is zoned C2 (general commercial). This REO is priced at $119,900 with a tax value of $178,860.

#13 – 3117754 – 2/1 on .26 acre in Selwyn Park—close to Uptown Charlotte in an area that is seeing much redevelopment. It is not uncommon to see small, older original structures demolished and new, large custom homes constructed in their place. This one is a VA REO. Listing price is $119,000. Tax value is $161,200.

#14 – 3121950 – 3/2 with 2,300 sq.ft. on 1.98 acre lot in Waxhaw. This one is priced at $118,000 and has a tax value of $201,190.

#15 – 3111883 – 3/2.5 on .48 acre lot. This is another HUBZU “auction” property, priced at $115,700 with a tax value of $155,349.

#16 – 3118301 – 4/2.5 with 1,744 sq.ft. built in 1964 on .31 acre lot near Uptown (28205). This one is listed at $104,900 with a tax value of $145,300.

#17 – 3125737 – 3/2 on .20 acre in Monroe (28112). This is a HUD home with 5 DOM. (HUD has a 15-day owner-occupant preference period.) It is listed at $53,000 and has a tax value of $95,130.

The link to the full MLS Reports for all of these appears below:

Click to view ALL property listings

As always, if you have any questions about these or any other properties, please don’t hesitate to contact me.

Until next time…