Investor looking for advice... (Atlanta, Sandy Springs: apartment, rentals, mortgage)

[Looking2buy]

Hi everyone,
My husband and I live in Virginia and are looking to invest in some rental property in the Atlanta area. So far we're considering North Cobb county, near Acworth and Kennesaw for single family homes, but are not sure where to look for multi-family homes (duplex, triplex, quadraplex). Does anyone have any advice about where would be a good area to buy multi-family homes? We're looking for clean, safe neighborhoods. Any nsight would be greatly appreciated!! Thanks.

[Steven2149]

I would suggest closer intown on the multifamily properties. You might want to look at places closer to or inside of 285. The rents should be a bit higher there. Places I would consider (as an investor/ agent myself) would be Tucker, Decatur, Atlanta (northside), Dunwoody, Sandy Springs, Roswell, maybe Norcross, Doraville, and Chamblee. It all depends on what you are looking to spend.

[Looking2buy]

Thanks Steven2149, I'll check out those areas. I've heard that Norcross and Chamblee are kind of sketchy areas though... are the other areas you listed a bit safer?

[Steven2149]

Well, as with anywhere in Metro Atlanta, the areas have good and bad spots. It would be important to check out some of these places to get a feel for them. You can't always put a lot of emphasis on what you may read in the paper. (not always anyway) There are nice places in Norcross as are there suitable places in Chamblee. Mainly when I speak of multi family properties, you want to be in a place with higher density. Atlanta in general is not very dense, however there are pockets that have more people per square mile. This is one factor that leads to stronger rents (generally speaking) in relation to purchase price of property. There are places around Atlanta that you could buy a quad for 200k, but the rent will not be very strong at all. Most of the places I listed earlier, it is possible to purchase a quad for 400k that will have strong rents in the 800 plus range. Where you can see that your monthly income will not be that strong, the hopeful appreciation is what you would like to have in multi family. (my 2 cents)

[Prichard]

I think Buckhead is relatively cheap compared to its location to town, and it's nice older residential homes. There has been a trend to move way out of the perimeter, but I think that trend will reverse somewhat. You will always have professionals who need to live near downtown, midtown, and Buckhead. The bigger the city gets, the more professionals it can and will support - even more than it's got now. Already, many Atlanta professionals are opting to own a home near town, with a weekend place in one of the rural mountain towns. This way they get the best of both worlds, without the awful commute every day. Also, these professionals can afford to send their kids to private schools, so the public schools are not an issue. If I were looking to invest money in Atlanta, Buckhead is where I'd place my bet.

[Georgia]

No offense meant, but we have enough speculators attempting to turn Georgia into Tenant Central.

Just an FYI.
Since Georgia has been invaded by developers run a muk, we are entering another area of issue. This being, HOME FOR RENT! Currently we have more developers slapping homes of all types on every piece of grass they can find then running off leaving the residents to foot the bills for infrastructure, we have a housing glut.

You can purchase new homes for nothing down and this amenity and that. Current homes are on the market for months. We have speculator galore that feel if they come down from up north or come up from Florida, they can buy duplexes, single family homes, etc. and have rental utopia. The issue is many of the "established" GA companies already have the relocation folks renting for a year while finding exactly where they want to live, the colleges already have the areas secure for the students to rent while here, so what is left?
Thousands of home with For Rent signs. Many of those renting to individuals with no credit history, fly by nights who don't pay, and of course the undercover person who rents, then sub-rents to about 25 illegals in a 3BR 1BA home or apt for cash under the table. Next you have a home you owe a mortgage on, hundreds of miles away so you cannot see the damage, neighborhood associations suing you since the 25 cars, parties, and fights are slightly against covenants, and you, the landlord going slowly broke.

Also warning: As landlord speculator, make sure the neighbors of what used to be a nice neighborhood don't know who your are. Your welcome may be less than friendly.

[homesource group]

I'm not quite sure about the Buckhead idea. Investing down there is for long holds and eventual resale for a positive ROI, but if you attempt to rent you're probably not going to earn a strong cash flow. When you speak of rentals such as quads, duplexes, and multi-family homes it is probably best to find one that needs rehab. I say this because you can find a property at a low cost, thus having a relatively low mortgage. Rehab the units possibly even create a few more, and then retain a strong positive cash flow because you could probably ask for more per unit. With respect as to where you may find such a property, I would say Midtown, Virginia Highlands, East Point and pretty much any area within the new Beltline. I’m a Realtor is this aspect is one that I am proud to say that I am good at. That is investment. I have a client who has recently purchased a 26 unit apartment building. It is in horrible condition, but has serious income potential. This project will probably take some time, but the pay off will be monumental. I also know of a gentleman who went into a project where he found a home on 3 lots. The home is located in the general area of Georgia Tech. He bought the property for $38,000, spent $225,000 to build a 13 unit dorm like structure. He has full occupancy and charges $420 per unit. Do the math; it's great positive cash flow. Well I hope that has given you some insight. Should you have any questions please feel free to contact me. Good luck!

[Steven2149]

Good point homesource. Anything that relates to proximity to one of the colleges would be a good investment if the numbers are right. That brings to mind Georgia Gwinnett College which is located in the Collins Hill area of Lawrenceville. Enrollment now is perhaps a hundred or so.... and expected to be over 8000 within 3 - 4 years. It is a brand new college and they plan to build some *some* dorms to accomodate the students. Therefore creating a demand for off campus housing. That area could be a potential gold mine for quads or duplexes.

[homesource group]

Funny you should mention that Steve. I am in COMPLETE agreeance. I have personally purchase a home there for such a reason. I am now pitching to many of my present client and prospects to begin the slight transition around the area. THe numero uno problem is that the plans are not really set in stone. No RFP's, no PUD...plans nothing. I know where they are going to build, but I don't have any clue what they are going to look like. I always tell my clients that you never want to be the biggest and baddest house in the subdivision for fear that you price yourself out. And obviously, you don't want to be Mr. Lowend either. So where to retain comps for such a property? What do you mold after? Or do you set the precedent? At that point how much of a risk are you going to be taking? THe hold on such a property is about 3 years right now. THe University has yet to pull all the stops and do a recruiting campaign. I think once I see occupancy in hotels rise from visiting parents and a strong enrollment program, not just projections, I will then open the floodgates to my very able and capable investors and be at the forefront of some of these changes. I really look forward to it. Such a project gets me very excited

[backfist]

Begrudgingly, I'm in agreement with Georgia on this one. There are becoming way too many speculators who capitalize on the necessity to rent, and way too few homeowners. Residents who have no financial stake in their community, don't care for their community. And, absentee landlords who have only a financial stake in a community, usually don't care about the community either.

If people are really about "investing", why not invest in home ownership instead of tenant-ship.