Late 2023. Interest rates had climbed past 6.5% and were still moving.
Every real estate podcast, every investor forum, every conversation at the gym had the same message: there are no good deals right now. Just wait. The market will correct.
I disagreed.
The investors who stop analyzing deals when conditions get uncomfortable are the same investors who wonder later why they missed the window. Deals do not disappear when rates rise. The math just changes. You adjust your down payment, adjust your criteria, and keep working your process.
So I kept running properties through my deal analyzer. And in late 2023, I found a 3-bed, 1-bath house in Jacksonville, North Carolina. Strong rental demand, low property taxes from being outside city limits, and a price that made the numbers work if I was willing to put more money down.
I bought it. And it has performed exactly as planned.
This post is part of my First 10 Real Estate Deals series, where I break down what actually happened, not polished success stories.
👉 irst 10 Real Estate Deals -- Series Hub
Deal Snapshot
Item | Details |
|---|---|
Property | 106 Grey Fox Lane, Jacksonville NC |
Year / Market | 2023 -- Onslow County, NC |
Property Type | Single-family, 3 bed / 1 bath |
Purchase Date | November 8, 2023 |
Purchase Price | $180,000 |
Down Payment | $70,800 (40%) |
Total Cash Invested | $70,800 |
Loan Amount | $106,200 at 6.625% |
Monthly P&I | $680.01 |
Current Rent | $1,645/month |
Current Market Value | $185,000 |
Strategy | Long-term cash flow rental |
The Story
How I Found the Deal
I found this deal through process, not luck. At the end of 2023, Avery and I wanted to close before year-end to take advantage of bonus depreciation for tax planning purposes. That created a deadline, and deadlines can push investors into bad decisions.
I did not let the deadline change my criteria. I ran a large number of properties through my deal analyzer and evaluated each one against my buy box. This property met every requirement. I moved forward.
If you want to see exactly how I evaluate deals, you can use my Real Estate Deal Analyzer. and watch the walkthrough video.
Due Diligence
The property is located outside Jacksonville city limits, which results in lower property taxes than comparable properties inside the city. That detail improves cash flow every year and compounds over a long hold.
Rental comparables in the immediate area
Condition of all major systems
Tax assessment and effective tax rate
HOA status (none)
Flood zone classification
Financing and Execution
I put 40% down on this deal. Most investors in a high rate environment try to minimize their down payment. I did the opposite, because my goal is not to minimize down payments. It is to acquire properties that cash flow strongly, that I can hold for decades, and that do not require constant management attention.
$106,200 loan at 6.625%, 30-year fixed. Monthly P&I of $680.01. Total cash out of pocket: $70,800. A larger down payment was not a compromise. It was the strategy.
Financials (Reality Check)
Acquisition
Purchase Price: $180,000
Down Payment: $70,800 (40%)
Total Cash Invested: $70,800
Loan Amount: $106,200 at 6.625%
Monthly P&I: $680.01
Current Performance
Monthly Rent: $1,645
Vacancy Rate: 5%
Monthly Expenses: $567.42
Monthly NOI: $995.33
Monthly Debt Service: $680.01
Monthly Cash Flow (BTCF): $315.31
Annual Cash Flow: $3,783.78
Equity and Total Return (Year 1)
Appreciation: $8,140
Loan Paydown: $1,159
Cash Flow: $3,784
Total Return: $13,083
Investor Metrics
Cash-on-Cash Return: 5.3%
Total ROI: 18.5%
Effective Annual ROI: 7.6% (18.5% / 2.44 years)
DSCR: 1.46
Expense Ratio: 39.5%
The 39.5% expense ratio reflects a proper underwriting model that includes property management, leasing costs, maintenance reserves, taxes, and insurance. This deal was designed for long-term stability and consistent cash flow, not short-term home runs.
Wins and Losses: My Lessons Learned
Lesson 1: Discipline Creates Opportunities Others Miss
When interest rates increased, a large portion of the investor market stopped buying. That reduced competition and created opportunities for investors who stayed active. I was buying selectively, with adjusted criteria for a higher rate environment.
Lesson 2: Cash Flow Solves Most Problems
By putting more money down, I ensured the deal worked from day one. Strong cash flow creates flexibility. A bad month does not create a crisis. A capital expenditure does not require a refinance.
Lesson 3: Simple Deals Are Often the Best Deals
No major renovation. No permitting risk. No complex repositioning. Just a solid property in a market I know well, bought at a price that made the numbers work. Simple scales. Complex creates friction.
Lesson 4: Interest Rates Are Relative
A 6.625% 30-year fixed rate felt high to investors spoiled by sub-3% rates in 2020 and 2021. In historical context, it is not high. The long-term average mortgage rate is closer to 8%. I was comfortable locking this in and holding for decades.
Lesson 5: Long-Term Fixed Debt Is an Asset
I am not a fan of refinancing long-term rental properties once fixed debt is in place. Refinancing adds closing costs, resets loan terms, and increases total interest paid. For long-term holds, stable fixed-rate debt that becomes cheaper in real terms over time is one of the most powerful tools in real estate investing.
Why I Would Rather Own 10 of These Than 1 Risky Deal
This deal is not flashy. It does not rely on perfect execution, forced appreciation, or a market that cooperates. It produces consistent cash flow, builds equity every month, and performs exactly as expected.
I would rather own 10 deals like this than chase one deal that might hit a home run. This is how wealth is actually built: consistency, discipline, and time in the market.
How This Deal Changed My Future Deals
I reinforced my conviction that a larger down payment is a legitimate strategy, not a fallback
I became more selective about location-specific tax advantages that compound over time
I stayed committed to my process during a period when most investors around me had stopped buying
Would I Do This Deal Again?
Yes, without hesitation. This deal aligns perfectly with my long-term strategy. It produces consistent cash flow, requires minimal oversight, and supports the goal of building a portfolio of properties I can hold for decades.
Key Takeaways
Discipline is a competitive advantage when other investors stop buying
Cash flow solves most problems -- size your down payment to ensure it
Simple deals scale better than complex ones
6.6% fixed rate is not expensive in historical context
Long-term fixed debt becomes cheaper in real terms over time
Location details like tax jurisdiction compound over decades of ownership
What is Next
In Deal #9, I break down a relationship-driven off-market deal in Castle Hayne, where I created value on day one through rent repositioning rather than renovation. No construction. No permitting. Just a clear plan, a rent gap, and disciplined execution.
👉 Deal #9: The Base Hit That Created Value on Day One
Looking back at the previous deal in this series: Deal #7: The Deal Where I Got Cocky and Paid for It
If you want to evaluate deals the way I do today, download my Real Estate Investing Analyzer + Deal Analysis Video.
Want Help Evaluating Your Next Deal?
At Cedar Ridge Management, our mission is to enable financial freedom for owners, tenants, and teammates.
If you are interested in real estate investing, or have a home you want to rent out and want to partner with a local, investor-minded property manager, schedule a call with our team here.
We would love to partner with you.
