Ultimate Guilford County Real Estate Investing Guide for 2024

BRRRR is an abbreviation of “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a plan for continuous expansion. A key part of this formula is to be able to receive a “cash-out” mortgage refinance.

You improve the value of the investment property beyond the amount you spent acquiring and rehabbing the asset. The house is refinanced using the ARV and the balance, or equity, is given to you in cash. This cash is placed into a different asset, and so on. You purchase more and more rental homes and continually increase your lease income.

When an investor owns a substantial collection of investment homes, it makes sense to hire a property manager and create a passive income stream. Find one of the best property management firms in Guilford County NC with the help of our complete list.

Factors to Consider

Population Growth

Population growth or shrinking tells you if you can depend on sufficient results from long-term investments. When you find strong population expansion, you can be confident that the area is attracting possible tenants to it. The city is desirable to businesses and employees to move, work, and raise households. Rising populations create a reliable tenant mix that can afford rent growth and homebuyers who assist in keeping your property values up.

Property Taxes

Real estate taxes, upkeep, and insurance spendings are considered by long-term rental investors for forecasting costs to assess if and how the investment strategy will be viable. Rental homes situated in unreasonable property tax areas will bring lower profits. Unreasonable property tax rates may predict an unstable community where expenses can continue to increase and should be considered a red flag.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median rental rates that will show you how much rent the market can allow. An investor will not pay a large amount for a house if they can only demand a limited rent not allowing them to repay the investment in a realistic time. A higher p/r shows you that you can demand modest rent in that community, a smaller one signals you that you can charge more.

Median Gross Rents

Median gross rents signal whether an area’s lease market is strong. Search for a continuous expansion in median rents during a few years. If rental rates are going down, you can scratch that area from discussion.

Median Population Age

The median citizens’ age that you are hunting for in a favorable investment market will be similar to the age of salaried individuals. If people are resettling into the district, the median age will have no challenge remaining at the level of the employment base. A high median age shows that the current population is leaving the workplace without being replaced by younger workers moving in. A dynamic economy can’t be supported by retired individuals.

Employment Base Diversity

A diverse employment base is what a smart long-term rental property investor will hunt for. If people are employed by only several significant businesses, even a slight disruption in their business could cause you to lose a lot of renters and raise your risk considerably.

Unemployment Rate

High unemployment leads to a lower number of renters and an unstable housing market. Non-working individuals can’t buy goods or services. Individuals who continue to have jobs can discover their hours and incomes cut. This may increase the instances of delayed rents and renter defaults.

Income Rates

Median household and per capita income will tell you if the tenants that you are looking for are living in the region. Your investment planning will take into consideration rental rate and asset appreciation, which will be based on wage augmentation in the area.

Number of New Jobs Created

The more jobs are consistently being generated in a region, the more reliable your renter source will be. An economy that creates jobs also increases the amount of participants in the property market. This enables you to buy more rental assets and fill existing empty units.

School Ratings

Local schools can make a major influence on the housing market in their area. When a business evaluates a market for potential relocation, they know that first-class education is a requirement for their employees. Relocating companies relocate and attract prospective renters. Recent arrivals who purchase a place to live keep housing prices up. You can’t run into a dynamically growing housing market without highly-rated schools.

Property Appreciation Rates

Real estate appreciation rates are an indispensable component of your long-term investment approach. You have to see that the odds of your investment raising in price in that neighborhood are strong. You don’t want to allot any time looking at markets with depressed property appreciation rates.

A furnished home where tenants reside for less than a month is regarded as a short-term rental. The per-night rental rates are typically higher in short-term rentals than in long-term units. Because of the high turnover rate, short-term rentals involve more recurring maintenance and sanitation.

Average short-term tenants are people taking a vacation, home sellers who are waiting to close on their replacement home, and people on a business trip who require a more homey place than a hotel room. Regular property owners can rent their houses or condominiums on a short-term basis with websites like AirBnB and VRBO. This makes short-term rental strategy a good approach to endeavor residential real estate investing.

Short-term rental units require engaging with occupants more repeatedly than long-term rental units. As a result, investors manage problems regularly. You might want to defend your legal bases by hiring one of the best Guilford County investor friendly real estate lawyers.

Factors to Consider

Short-Term Rental Income

First, figure out the amount of rental revenue you must have to meet your desired profits. Being aware of the usual amount of rental fees in the community for short-term rentals will help you select a preferable area to invest.

Median Property Prices

You also must know the amount you can manage to invest. The median values of real estate will show you if you can afford to be in that market. You can adjust your real estate hunt by analyzing median values in the city’s sub-markets.

Price Per Square Foot

Price per sq ft can be inaccurate when you are examining different properties. A home with open foyers and high ceilings can’t be contrasted with a traditional-style residential unit with larger floor space. You can use the price per square foot criterion to obtain a good broad view of real estate values.

Short-Term Rental Occupancy Rate

The necessity for new rentals in a region can be determined by evaluating the short-term rental occupancy level. If nearly all of the rental units have renters, that market needs additional rentals. If the rental occupancy rates are low, there is not enough need in the market and you must look in another location.

Short-Term Rental Cash-on-Cash Return

To understand if it’s a good idea to put your capital in a particular property or city, compute the cash-on-cash return. Take your projected Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The result will be a percentage. If a venture is lucrative enough to pay back the investment budget quickly, you will get a high percentage. When you take a loan for part of the investment amount and put in less of your own cash, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This metric shows the comparability of rental property value to its yearly revenue. A rental unit that has a high cap rate as well as charges average market rents has a high market value. If cap rates are low, you can prepare to spend more for real estate in that market. The cap rate is determined by dividing the Net Operating Income (NOI) by the asking price or market value. The answer is the annual return in a percentage.

Local Attractions

Short-term tenants are commonly tourists who come to a community to enjoy a recurrent major activity or visit tourist destinations. This includes collegiate sporting events, kiddie sports competitions, schools and universities, huge concert halls and arenas, festivals, and amusement parks. At particular occasions, areas with outside activities in mountainous areas, coastal locations, or alongside rivers and lakes will attract large numbers of visitors who want short-term housing.

When an investor buys a house cheaper than its market worth, renovates it so that it becomes more attractive and pricier, and then liquidates it for revenue, they are referred to as a fix and flip investor. Your estimate of fix-up expenses must be correct, and you should be able to buy the property for lower than market worth.

Examine the housing market so that you understand the exact After Repair Value (ARV). You always need to analyze how long it takes for listings to sell, which is shown by the Days on Market (DOM) indicator. Liquidating real estate immediately will keep your costs low and maximize your returns.

So that home sellers who have to get cash for their property can effortlessly discover you, highlight your availability by using our list of the best cash real estate buyers in Guilford County NC along with top real estate investors in Guilford County NC.

Also, hunt for the best property bird dogs in Guilford County NC. Specialists on our list focus on acquiring desirable investments while they’re still unlisted.

Factors to Consider

Median Home Price

The region’s median housing price should help you locate a suitable city for flipping houses. You are looking for median prices that are low enough to show investment possibilities in the region. This is a fundamental feature of a fix and flip market.

If your examination indicates a rapid drop in home market worth, it could be a signal that you’ll discover real estate that fits the short sale requirements. Real estate investors who partner with short sale processors in Guilford County NC get regular notifications regarding possible investment real estate. Learn more regarding this type of investment explained in our guide How to Buy a Short Sale House.

Property Appreciation Rate

The changes in real estate market worth in a location are critical. Stable upward movement in median values indicates a robust investment environment. Erratic market value fluctuations aren’t desirable, even if it is a remarkable and unexpected increase. Buying at an inopportune time in an unreliable market can be devastating.

Average Renovation Costs

You will have to evaluate construction expenses in any potential investment area. The manner in which the municipality goes about approving your plans will have an effect on your investment as well. You want to be aware whether you will be required to hire other experts, such as architects or engineers, so you can be ready for those costs.

Population Growth

Population data will tell you if there is solid demand for residential properties that you can provide. If there are purchasers for your fixed up homes, the data will illustrate a robust population growth.

Median Population Age

The median population age can additionally show you if there are qualified home purchasers in the city. The median age should not be less or higher than the age of the usual worker. Employed citizens can be the individuals who are probable homebuyers. Aging individuals are preparing to downsize, or move into age-restricted or retiree communities.

Unemployment Rate

While researching a region for real estate investment, search for low unemployment rates. An unemployment rate that is less than the national average is what you are looking for. When the region’s unemployment rate is less than the state average, that is a sign of a good economy. In order to acquire your repaired houses, your buyers have to have a job, and their customers too.

Income Rates

Median household and per capita income rates explain to you if you will see qualified home buyers in that place for your residential properties. Most individuals who buy a home have to have a home mortgage loan. To be eligible for a home loan, a person cannot spend for a house payment greater than a certain percentage of their wage. The median income stats show you if the area is eligible for your investment efforts. Particularly, income growth is critical if you are looking to expand your investment business. To keep up with inflation and rising building and material expenses, you need to be able to regularly mark up your purchase rates.

Number of New Jobs Created

The number of jobs generated each year is vital data as you think about investing in a specific community. A higher number of residents purchase homes when the region’s economy is generating jobs. New jobs also lure people moving to the area from elsewhere, which also reinforces the local market.

Hard Money Loan Rates

Fix-and-flip real estate investors normally use hard money loans rather than traditional financing. This strategy allows them make profitable deals without hindrance. Find real estate hard money lenders in Guilford County NC and analyze their mortgage rates.

An investor who needs to understand more about hard money loans can find what they are as well as how to utilize them by reading our article titled How Do Hard Money Lenders Work?.

In real estate wholesaling, you find a house that investors may count as a lucrative investment opportunity and enter into a contract to purchase the property. A real estate investor then “buys” the contract from you. The seller sells the home to the real estate investor instead of the real estate wholesaler. The wholesaler does not liquidate the property — they sell the rights to buy it.

The wholesaling mode of investing includes the use of a title company that grasps wholesale purchases and is informed about and active in double close deals. Search for title companies for wholesalers in Guilford County NC in our directory.

Our in-depth guide to wholesaling can be viewed here: A-to-Z Guide to Property Wholesaling. While you manage your wholesaling activities, place your name in HouseCashin’s directory of Guilford County top wholesale property investors. This way your potential clientele will learn about your availability and contact you.

Factors to Consider

Median Home Prices

Median home prices are key to locating markets where homes are selling in your investors’ price level. A community that has a sufficient supply of the reduced-value investment properties that your investors want will have a lower median home price.

A fast depreciation in the value of property might generate the swift appearance of properties with more debt than value that are wanted by wholesalers. This investment strategy regularly delivers numerous particular perks. However, be aware of the legal liability. Learn about this from our guide Can I Wholesale a Short Sale Home?. When you’ve chosen to try wholesaling short sales, make certain to hire someone on the list of the best short sale attorneys in Guilford County NC and the best property foreclosure attorneys in Guilford County NC to assist you.

Property Appreciation Rate

Median home purchase price fluctuations explain in clear detail the housing value in the market. Many investors, like buy and hold and long-term rental investors, specifically need to know that residential property prices in the market are growing over time. Dropping prices illustrate an unequivocally poor leasing and housing market and will dismay real estate investors.

Population Growth

Population growth numbers are crucial for your intended contract assignment buyers. If the population is growing, new residential units are needed. This includes both leased and ‘for sale’ real estate. If a city is losing people, it does not need more residential units and real estate investors will not invest there.

Median Population Age

A robust housing market prefers individuals who start off leasing, then transitioning into homeownership, and then moving up in the residential market. A location with a large workforce has a strong supply of renters and purchasers. A market with these features will display a median population age that corresponds with the employed person’s age.

Income Rates

The median household and per capita income display steady growth historically in cities that are ripe for real estate investment. Increases in lease and purchase prices will be supported by improving salaries in the market. Real estate investors want this if they are to reach their estimated profits.

Unemployment Rate

Real estate investors will thoroughly estimate the location’s unemployment rate. Renters in high unemployment communities have a tough time staying current with rent and some of them will stop making rent payments altogether. Long-term investors who count on timely rental payments will suffer in these communities. Investors can’t depend on tenants moving up into their houses if unemployment rates are high. This is a problem for short-term investors buying wholesalers’ contracts to fix and flip a home.

Number of New Jobs Created

Knowing how soon fresh employment opportunities appear in the area can help you determine if the house is positioned in a reliable housing market. New jobs generated mean a high number of employees who require properties to rent and purchase. Employment generation is beneficial for both short-term and long-term real estate investors whom you rely on to buy your wholesale real estate.

Average Renovation Costs

An important variable for your client investors, especially house flippers, are rehab expenses in the region. The purchase price, plus the expenses for rehabilitation, must amount to less than the After Repair Value (ARV) of the real estate to allow for profit. Look for lower average renovation costs.

Note investors purchase a loan from mortgage lenders if the investor can buy the loan for a lower price than the outstanding debt amount. When this occurs, the investor takes the place of the client’s lender.

Loans that are being paid on time are called performing loans. Performing notes are a repeating source of cash flow. Some mortgage note investors look for non-performing notes because if the mortgage note investor can’t successfully rework the loan, they can always purchase the collateral property at foreclosure for a low price.

Eventually, you could have a lot of mortgage notes and require additional time to service them without help. At that stage, you may want to employ our directory of Guilford County top mortgage servicers and redesignate your notes as passive investments.

If you decide to utilize this strategy, add your venture to our directory of real estate note buying companies in Guilford County NC. When you’ve done this, you’ll be discovered by the lenders who publicize profitable investment notes for acquisition by investors such as you.

Factors to consider

Foreclosure Rates

Low foreclosure rates are a sign that the market has opportunities for performing note buyers. High rates might signal investment possibilities for non-performing mortgage note investors, but they need to be cautious. The neighborhood needs to be active enough so that investors can foreclose and liquidate properties if needed.

Foreclosure Laws

Mortgage note investors want to understand the state’s laws concerning foreclosure prior to pursuing this strategy. Some states use mortgage paperwork and some utilize Deeds of Trust. A mortgage dictates that the lender goes to court for permission to start foreclosure. A Deed of Trust allows the lender to file a notice and proceed to foreclosure.

Mortgage Interest Rates

The mortgage interest rate is determined in the mortgage loan notes that are bought by mortgage note investors. Your investment return will be affected by the interest rate. Mortgage interest rates are crucial to both performing and non-performing note investors.

Traditional lenders price different mortgage interest rates in different locations of the United States. The stronger risk taken by private lenders is reflected in bigger mortgage loan interest rates for their mortgage loans compared to traditional loans.

Profitable investors continuously search the interest rates in their market offered by private and traditional mortgage lenders.

Demographics

A community’s demographics details allow note buyers to streamline their work and properly distribute their resources. The city’s population growth, employment rate, employment market growth, wage levels, and even its median age provide valuable data for investors.
Performing note investors look for homeowners who will pay without delay, creating a stable income flow of loan payments.

Non-performing mortgage note purchasers are interested in similar components for other reasons. A strong regional economy is required if investors are to locate buyers for properties they’ve foreclosed on.

Property Values

As a mortgage note investor, you must look for borrowers having a cushion of equity. This improves the likelihood that a possible foreclosure sale will make the lender whole. Rising property values help increase the equity in the house as the homeowner pays down the balance.

Property Taxes

Payments for property taxes are most often sent to the mortgage lender along with the mortgage loan payment. The lender pays the payments to the Government to ensure they are paid promptly. The lender will need to take over if the mortgage payments cease or they risk tax liens on the property. Tax liens take priority over any other liens.

Because property tax escrows are included with the mortgage loan payment, rising property taxes mean higher house payments. Overdue homeowners might not have the ability to maintain growing mortgage loan payments and might interrupt paying altogether.

Real Estate Market Strength

A region with growing property values promises strong opportunities for any note investor. They can be assured that, if required, a repossessed property can be unloaded for an amount that makes a profit.

A growing market may also be a good environment for originating mortgage notes. It is an added stage of a note buyer’s career.

Some real estate investment firms are conceived as trusts called Real Estate Investment Trusts or REITs. Before REITs were invented, investing in properties used to be too expensive for the majority of people. Many investors currently are capable of investing in a REIT.

REIT investing is termed passive investing. The risk that the investors are accepting is diversified within a group of investment properties. Shareholders have the ability to unload their shares at any time. One thing you can’t do with REIT shares is to determine the investment real estate properties. The land and buildings that the REIT chooses to buy are the properties in which you invest.

Mutual funds that contain shares of real estate businesses are called real estate investment funds. The investment properties aren’t owned by the fund — they are possessed by the companies in which the fund invests. These funds make it doable for more investors to invest in real estate. Real estate investment funds are not obligated to distribute dividends like a REIT. The profit to investors is created by increase in the value of the stock.

You may choose a fund that concentrates on particular categories of the real estate business but not specific locations for each real estate property investment. As passive investors, fund participants are content to allow the directors of the fund handle all investment decisions.