BiggerPockets

I have been receiving deals through email from an Atlanta wholesaler. It blows my mind how cheap houses are in the ATL suburbs.

Here is an example of a current deal:
I copy as paste from the email.

How bout a 3 bedroom with 3 full bathrooms?

1374 Muirfield Dr
Stone Mountain, GA 30088
3br/3ba, 1452 sqft
Built 1977

Price: $21,500!!
Est. Repairs: $12-$15k(possibly less)
Last Sold for $96,900

This deal is too good to pass up! Located in the Muirfield subdivision of Stone Mountain, this split level boasts a 2-car garage, with breakfast area and bonus room. Daylight basement with a full bathroom. Definitely will give you awesome cashflow or retail for a decent profit. Don't hesitate to make a move on this one..

See video here>>> http://www.youtube.com/watch?v=P_tgg3uRQ9I

For a rental, the cash flow is phenomenal.
Why are these houses so cheap? What's the catch?

I didnt look at the property specifically, but that's not too uncommon for certain parts of atlanta. In some areas, there is so much foreclosure inventory that finding great cash flow opportunities is easy. On the other hand, trying to flip properties in those areas can be tremendously difficult, as resale values are low as well.

But, if you're willing to hold for a few years, there is opportunity...

I would say that is a good thing, that means at 21,000 he is not overpaying. As J Scott noted, this is probably an area where an investor has to be committed to a long term hold. I would be more concerned with length of stay for tenants and number of similar properties in the area that are rentals as George pointed out. You could end up with a property that is never worth more than you paid simply because EVERY property is a rental.

If the numbers are correct on rental then it looks really good for a long term buy & hold strategy.

I just took a look at the property on the MLS...

First, the price you mention above is about $1500 below the list price on the property, and the list price on the property is a not-yet-approved short-sale price. So, there's a very decent chance that you wouldn't be able to pick up this property at that price.

Also, the property went PLA ("pending lender approval") yesterday...

(All that said, I realize that you're probably not asking about that property specifically, but wanted to add that information just in case it was a deal you were considering)