I Broke My Own Rule and Bought a 2/1

I Broke My Own Rule and Bought a 2/1

2 min read
Ken Corsini

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 houses in Metro Atlanta since 2005.

Experience
With over 15 years of experience in the real estate industry, Ken has expanded his original flipping business into multiple independent real estate businesses, including Red Barn Real Estate, with over 180 agents in Metro Atlanta across four offices; Red Barn Construction, a custom home-building company specializing in modern farmhouses across North Atlanta; Red Barn Renovations, a full-service renovation company; Black Oak Mortgage, a direct lending company based in Woodstock, Georgia; and InvestorSumo, a technology company focusing on CRM and data needs for real estate investors.

Having been involved in thousands of transactions and having owned over 800 houses, multiple commercial and multifamily properties, and more, Ken brings a wealth of knowledge and experience to the BiggerPockets community. He has authored over 100 blogs and currently hosts the “Best Deal Ever Show” on the BiggerPockets YouTube channel. He is also the host of the popular Deal Farm Podcast.

Ken is currently writing a book in conjunction with BiggerPockets called “Profit Like the Pros,” scheduled for release in Fall 2020.

He and his wife also run Roc.Star Kids, a non-profit organization focused on the needs of children and families in the fight against childhood cancer. For more information on this very personal cause, check out their story here.

Press
In addition to HGTV and HGTV Magazine, Ken has been featured on The Today Show, People Magazine, The LA Times, Think Realty Magazine (cover), TV Insider, In Touch Weekly, Life and Style Magazine, The Wrap, The Atlanta Journal Constitution, UGA Today, US Chamber of Commerce, PopSugar, Entertainment Magazine, and a number of local periodicals.

Education
Ken has a Business Degree from the University of Georgia and a Masters Degree in Building Construction from Georgia Tech.

Accreditations
Ken is currently licensed as a general contractor (commercial) in the state of Georgia.

Follow
RedBarnHomes.com
Instagram @kencorsini
Twitter @kencorsini
Facebook

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For years, when agents asked me what my criteria was for buying investment property, one of my standard responses was that the property needed to be at least a 3 bed/ 2 bath. I know a lot of other investors in my area that have the same criteria. The thinking is you end up up narrowing your potential market to a very small segment that is willing to live in a 2 bed property.

By and large this is true … most people looking to rent or buy want a minimum of 3 bedrooms and a minimum of 2 bathrooms. Understandably, your average renter or homebuyer needs extra space for children, guests, an office, etc. A 2 bedroom typically doesn’t provide the space that your average consumer wants.

Why I Broke My Rule

So why did I break my own rule that I’ve held fast to for so many years?

Well, one reason is because inventory is tight and I’ve had to broaden my buying criteria (but that’s another topic for another day). The truth is, I’ve learned that buying real estate shouldn’t be about a strict formula applied to heterogeneous property types, neighborhoods, market factors, etc. There isn’t a “one-size-fits-all” formula for buying investment property because there is simply too much variation in the marketplace.

For instance, I’m sure there are people in New York City reading this article wondering what in the world is wrong with a 2 bed/ 1 bath property! This is because rental space in New York City is limited and therefore sold at a high premium. It’s not at all uncommon for someone to rent or own a 2 bed unit. However, in Atlanta, Georgia, most renters and buyers expect more square footage for the money.

So again, if the general sentiment in Atlanta is for more bedrooms and more square footage, why would I invest in a 2 bed / 1 bath? The simple answer is that even within an overall market, there are submarkets and neighborhoods that don’t conform to the general trends in the larger market.

In the case of the 2 bedroom property I purchased this week, it’s located just off of a main road in a high density area with a high rate of growth. In addition, the neighborhood that this property resides in is actually comprised of about 50% 2 bedroom houses. Looking through our local MLS, I can see that many of the 2 bedroom houses in this neighborhood have rented in recent months at rental rates that make sense compared to my investment. Additionally, the 2 beds that have sold in the neighborhood in the last few months have sold for a good bit more than what I paid for the property (ie. my potential profit margin fits within my normal buying models).

Interestingly, I bought this property at the courthouse steps yesterday. It’s interesting because I spent the entire day watching a handful of hedge funds bid other properties up to insanely high purchase prices. However, when this 2 bedroom came up for bidding, not one of them was interested in it. It’s as if they had marching orders from the higher-ups to steer clear of any 2 bed properties. Luckily for me, I wasn’t stuck in a box of what I could or couldn’t bid on.

At The End of the Day…

At the end of the day, the question you should ask yourself is whether or not a particular property will make you money. If the particular market you are buying in supports the demand for a 2 bedroom house, don’t limit yourself on principle alone. I did this for years and probably missed out on opportunities that could have been profitable.