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- Your Daily Dose Of Knowledge! December 16, 2024 - #230
Your Daily Dose Of Knowledge! December 16, 2024 - #230
Today's New Post - Real Estate - Stock Market - Start Your Business - Boost Your Knowledge - More
Welcome Back,
Hello everyone, and happy Monday. I hope you had a fantastic weekend and are ready to have a productive week. Today we are diving into another real estate market, another in the state of North Carolina, that of Durham. Enjoy!
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Real Estate Investing
Market Snapshot:
Durham, North Carolina
Durham’s real estate market is thriving, fueled by a combination of tech industry growth and an influx of young professionals. The median home price has reached $395,000, reflecting a 5.2% year-over-year increase. Despite higher interest rates, demand for single-family homes and multifamily units remains robust, driven by a limited housing supply and the city’s proximity to the Research Triangle Park, a major employment hub. Active listings are currently at 2,800, up 7% compared to last year, indicating a more balanced market.
Median Home Price: $395,000
YoY Price Growth: 5.2%
Active Listings: 2,800 (up 7% from last year)
Deal Of The Day:
2-Unit Multifamily in Durham, NC
Price: $475,000
Units: 2 (3-Bed, 3-Bath each)
Monthly Rental Income: $4,000
Cap Rate: 7.9%
This newly-renovated property near downtown Durham offers a strong cash flow potential with a 7.9% cap rate. Each unit rents for $2,000/month, generating $48,000 annually in gross rental income. Situated within walking distance of restaurants, schools, and public transport, this property is ideal for long-term appreciation and stable tenant demand.
Deal Rating: 6/10
This property is located in a great area and does show some signs of good appreciation over time but is currently priced way above the average in the area. With that said rent in the area seems to be growing exponentially and if you are fine waiting awhile for that sweet-sweet appreciation, then this may be a suitable investment.
Real Estate Tip:
Investment Strategy:
Seller Financing
Seller financing is an effective way to close deals without traditional bank loans. With this method, the seller acts as the lender, allowing the buyer to make direct payments over time. This strategy is particularly useful in a high-interest-rate environment, where traditional loans may not be attractive. For instance, if a seller offers a 5% interest rate on a $300,000 property, you could save significantly compared to current commercial mortgage rates.
Current Interest Rates:
Durham, North Carolina
30-Year Fixed Residential: 6.8%
15-Year Fixed Residential: 6.1%
Commercial Rates: Starting at 6.9%
Durham’s interest rates are comparable to national averages. While residential rates hover around 6.8%, commercial loans are slightly higher. This makes cash flow analysis critical for multifamily investments. Investors should factor in these rates when evaluating potential deals.
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How to Profit from Mixed-Use Developments
Mixed-use developments—properties that combine residential, commercial, and retail spaces—are gaining traction in urban markets like Durham. These properties generate multiple income streams and attract tenants who value convenience.
For instance, a mixed-use property with 10 apartments, 3 retail units, and a co-working space might generate:
$14,000/month from residential rentals
$6,500/month from retail leases
$3,000/month from co-working memberships
Investing in mixed-use developments requires thorough market research, but the payoff can be substantial, especially in growing cities with a strong demand for both residential and retail spaces.
Economic Conditions
Durham’s economy is anchored by the booming tech and healthcare industries, with unemployment currently at 3.2%, lower than the national average. The Research Triangle Park is expanding, attracting companies like Google and Apple, which are building new campuses in the area. Rising wages have bolstered the housing market, but inflation, now at 3.5%, is increasing construction costs. Despite this, Durham remains an attractive destination for both families and investors.
Market Rating: 6/10
Although unemployment and pricing in the area a quite low for most of America the mortgage rates and inflation rates are the 2 biggest factors making this market a so-so market to invest in. This market does see some good market growth YoY although it doesn’t constitute the high mortgage and inflation rates.
Key Takeaways:
Durham’s real estate market is growing, with median home prices at $395,000 and active listings up 7% YoY.
Multifamily properties offer strong cash flow opportunities, like the 7.9% cap rate deal highlighted today.
Leveraging zoning laws and seller financing can open new investment doors, even in high-rate environments.
Economic growth in Durham, driven by tech and healthcare, is bolstering the housing market.
Mixed-use developments are emerging as lucrative investments with diverse income streams.
That’s All For Today
I hope you enjoyed today’s issue. If you have any questions regarding today’s issue or future issues feel free to ask. Come back tomorrow for information on how to grow your income and wealth. I hope to see you.
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