I thought I’d share the story of my real estate investments in Durham, Chapel Hill, and Carrboro, NC — if it helps you in your quest for investment properties, great. 

When I moved to Chapel Hill in 1994, a university town dominated by the University of NC there was hardly a house that cost more than $500,000.  Now there are many that are considerably over $1million.  The prices have risen dramatically and little 4-room mill houses cost over $100,000. Gary Keller in his book, The Millionaire Real Estate Investor, says that the best way to build wealth is to buy, rent to tenants who pay down your mortgage, build equity, and then sell or get the income.   The most important factor is location.  Once you’ve chosen a location that will appreciate and rent easily, you’re in good shape.  Then you pick a house or multi-family dwelling and look at the renovations needed and figure that into your cost.  Do the numbers, the before tax and after tax cash flow. 

In 1999 I bought a 2 bed, 2 bath, 2 story condo in Chapel Hill in a small development that rents to UNC students steadily, because it is within walking distance of campus and Franklin St, the center of town.  Location, location, location.   It cash flows now $300/mo and I heard that I’m charging too little.   I’ll raise the rent in June for the next renters.  There are improvements I need to make to the property before I raise the rent.  Read the next installment for that info and what I did about property managers.