Charlotte Area Real Estate Best Buys: January 2016

This is my first “Charlotte Area Real Estate Best Buys” newsletter of 2016, and I know many investors have been struggling to find inventory for both flip and rent-and-hold projects. As you will see in the summary of properties and the link to full MLS reports below, good deals are still out there. But you need to be prepared to move quickly. There remain plenty of competing buyers for REO inventories, and sellers know it. As we saw in 2015, the days of making offers of 75% of listing price are gone for a while. The best values continue to receive multiple offers, sometimes bidding the sales prices up above listing price. So solid research and careful analysis of comparable sales and active listings is critical. Likewise, being prepared to accurately estimate renovation costs is crucial. The issue isn’t really how far below the listing price you can get a property under contract; the issue is how far below market value or ARV (“after repair value”) you can get it under contract.

A couple of years ago, tax value could serve as a quick and easy estimate of market value. As the Charlotte market continues to recover, that is no longer the case in many areas. Tax value can now be significantly below market value or ARV. So research and analysis are more important than ever to the eventual success or failure of a project. Good deals continue to present themselves. But they are increasingly more difficult to identify. That’s what I’m here for. And having said that, here are summaries of 23 properties that might make good investment projects, depending on the individual investor’s goals and strategies:

#1 – MLS 3118301 -4BR/2.5BA brick and vinyl REO (“foreclosure”) near Uptown (zip code 28205) on .31 acre, built in 1964. Listing price is $104,900. Tax value is $145,300.

#2 – 3066493 – 4/2.5 Cornelius REO with 3,086 sq.ft. of heated living area (“HLA”), but this one has a synthetic stucco exterior. Some of you can deal with that; others are best advised to stay away. Listing price has been reduced to $444,900 with a tax value of $495,400.

#3 – 3117047 – SE Charlotte (28212) 3/2 REO with 48 days on the market (“DOM”); listing price has been reduced to $99,900 and tax value is $130,600.

#4 – 3118727 – Statesville REO on a 1.20 acre waterfront Lake Norman lot; the home is configured as a 3/2 with a basement, but MLS specifies 5,228 total sq.ft. Listing price is $500,000 with a tax value of $664,950.

#5 – 3129986 – 4/3.5 Monroe REO on .80 wooded acre; this one was built in 2007 and is priced at $319,900, with a tax value of $373,820.

#6 – 3139739 – 4/3.5 with basement (total of 4,822 sq.ft.) on .52 acre in zip code 28278; priced at $255,000 with a tax value of $417,000.

#7 – 3113313 – 4/3.5 with 3,386 sq.ft. on 2.32 acre lot in Monroe; this Fannie Mae REO is priced at $214,900 with a tax value of $300,700.

#8 – 3138464 – 3/2.5 Sherwood Forest (near Uptown Charlotte; an area seeing a lot of revitalization and upscale custom building and renovations) Estate sale priced at $210,000 with a tax value of $222,300.

#9 – 3138424 – 4/3 on .47 acre lot off Sardis Road North (28270), priced at $199,900 with a tax value of $222,700.

#10 – 3138906 – 4/2.5 on .54 acre in Harrisburg; this Fannie Mae REO is priced at $189,900 with a tax value of $189,960. But Harrisburg is one of those areas that has seen a nice recovery in market prices, which are often now well above tax value.

#11 – 3140113 – 4/2.5 in NE Charlotte (28262); this REO is located on .62 acre lot and has 2,559 sq.ft. of HLA. Listing price is $184,000. Tax value is $200,200.

#12 – 3136323 – 4/2.5 REO in Monroe (28110) assigned to top performing Wesley Chapel Elementary, Weddington MS and Weddington HS (high desirable); this one is an example of how comps can be well above tax value. It is priced at $180,000 and has a tax value of $216,370. But most area recent comparable sales have averaged in the $275,000 range. The problem with this one is it may be located in a flood plain.

#13 – 3129193 – 4/2.5 REO built in 2006 in Wesley Chapel subdivision in Monroe (28110); this Fannie Mae property has 2,550 sq.ft. and is listed at $174,900 with tax value of $181,140. Like the one above, this could make a very good rent-and-hold property because of location and school assignment. This one is assigned to the somewhat less desireable Sun Valley schools, though.

#14 – 3140265 – SE Charlotte (28215) 4/2.5 Freddie Mac REO with 3,086 sq.ft., built in 2007. This home is listed at $164,900, with a tax value of $170,900.

#15 – 3150210 – 4/2.5 built in 2007, this Fannie Mae REO is located in Kannapolis and is listed at $149,000, with a tax value of $151,380.

#16 – 3139779 – 3/2.5 NE Charlotte (28213) HUBZU “auction” REO. (See earlier editions of this newsletter/blog for a discussion of HUBZU and other so-called “auctions.” They are not necessarily “bad,” but they are not really auctions, either. They do, however, generally charge a 4.5% buyer premium in addition to the purchase price. They also usually will not allow an inspection contingency in the contract, so you need to have inspected the property before you make an offer on it. These can be good deals, but you really need to be careful and “know what you’re doing.”) This one is listed $133,560 and has a tax value of $130,000. The MLS listing price is often quite a bit above the “minimum bid” HUBZU will consider.

#17 – 3121839 – North Charlotte (28269) REO with 4BR/2.5BA and 2,396 sq.ft. of HLA. This one was built in 2008, so mechanical and other systems should be good unless they have been intentionally vandalized. Listing price is $129,900 with a tax value of $153,500.

#18 – 3140262 – 3/2 Freddie Mac REO in 28215 on .51 acre. This one is listed at $124,900 with a tax value of $151,500.

#19 – 3126385 – 3/2 Concord REO on .38 acre. Listing price is $119,900 and tax value is $129,980.

#20 – 3137333 – 3/2 Fannie Mae REO on .56 acre in zip code 28213. This one is listed at $109,900 and has a tax value of $122,800.

#21 – 3138042 – This is a 2/1.5 “project” for those who like this sort of thing; it was built in 1935 and the MLS states it has 2,682 sq.ft. of HLA. It is located in zip code 28112 (Monroe) and is listed at $99,900, with a tax value of $183,330.

#22 – 3117754 – 2/1 brick ranch in Selwyn Park (28209 near Uptown Charlotte) on .26 acre. This is also an REO, and it is on a large enough lot that someone could either expand the home or knock the home down and built a new custom home in its place. Listing price is $98,000 with a tax value of $161,200.

#23 – 3137058 – 3/1.5 HUBZU “auction” property located in SE Charlotte (28227), listed at $72,300 with a tax value of $87,100.

A link to the full MLS reports for all of these homes follows: (If you see a single-line display of addresses when you click the link, look for the tab in the upper right corner of the page labeled “Display” and choose full report with photos)

Click the following link to view the Residential:
http://matrix.carolinamls.com/DE.asp?k=331377XSXZH&p=DE-18001911-613

Most of these properties will not last long, but as you can see, interesting deals continue to enter the Charlotte market in 2016. As always, if you have any questions or would like to see any of these properties, please do not hesitate to contact me. Until next time…