First and foremost, thanks in advance for any insight that you can provide. I'm just starting down my investment journey (I have been a part of quite a few deals in my original home state, but now I'm going out on my own). I am trying to get a good grasp on the market and started out with my team (Lender, Agent, PM, and Contractors) but in finding an ability to do BRRRRs here or converting properties, I noticed it to be very difficult due to some of the zoning (All of the zoning) limitations that are here.
I am currently struggling to find properties that cash flow positive pretty consistently (From a duplex-fourplex perspective) and even if I look at living in it personally, it can easily still be "cutting it close".
I noticed that most agents are focused on appreciation here (even the investment minded RE Agents) and were curious if anyone had any stories they might be able to share or some suggestions/learnings from being in the greater ATL market.
I will admit that I am not well versed on all the zoning laws for every Atlanta county. However, other than some restrictions recently put on new construction on the West Side, I am not aware of other restrictive zoning outside of the norm. Obviously, taking a SF and turning it into a duplex will be a zoning issue and yes, getting these approved is quite tough. Would love to dive into some of the other zoning issues you have ran into though!
In regards to finding great deals on the market, this is something that is quite difficult in any hot market. Atlanta is one of the hottest right now and has been for some time. However, the greater Atlanta metro is huge and there is growth happening all over. Have you looked at deals in the border counties like Henry, Douglas, Paulding, etc.?
Appreciation-happy agents are quite abundant here because that is a big upside to investing in the Atlanta area. With cash-flow so sparse, this is becoming a focus for many investors and agents in the area. That being said, there are those of us still out there who would not bet on appreciation ourselves thus will never ask a client to do so (unless that is the client's goal). Cash-flow and decent spreads do still exist if you know where to look and are prepared for the ensuing bidding wars. You might even get one that slips through the cracks. One of my clients closed on a deal last month that was about $75k with $1k/mo rent that had been on the market for a few months. It only needed a few grand in repairs. Definitely more of an exception than the rule here but these deals do still exist if you're diligent and patient.
Now, if you're real serious about finding multiple deals in a shorter span of time here, you will want to go the off-market route. I'm not talking wholesale deals since these seem to be even more sparse than market deals. You'll want to start your own marketing campaign, but remember you will be battling with all the wholesalers and agents who are doing the same. Therefore, you will want to get real specific with your campaign and try to hone in on a niche that is not yet saturated.
Lastly, keep in mind, just because you aren't buying deals left and right does not mean you aren't being productive and moving closer to your goals. If the deals aren't coming and you're doing your best to find them, that is out of your control. So, focus on things that are within your control, like expanding your network and education. Make sure you are positioned so that the moment a deal does come up you're ready to go. That's the name of the game here in Atlanta.
Hope this helps a bit. Please, feel free to reach out anytime if you have questions or just want to chat!
New to Real Estate · Atlanta, GA · Member since 2020 · 13 posts · 7 votes
5y
@Josh Stralko
I feel the exact same way brother. Really not seeing anything on market that I could pull money out of it seems. If anyone can prove us wrong please do!
I will admit that I am not well versed on all the zoning laws for every Atlanta county. However, other than some restrictions recently put on new construction on the West Side, I am not aware of other restrictive zoning outside of the norm. Obviously, taking a SF and turning it into a duplex will be a zoning issue and yes, getting these approved is quite tough. Would love to dive into some of the other zoning issues you have ran into though!
In regards to finding great deals on the market, this is something that is quite difficult in any hot market. Atlanta is one of the hottest right now and has been for some time. However, the greater Atlanta metro is huge and there is growth happening all over. Have you looked at deals in the border counties like Henry, Douglas, Paulding, etc.?
Appreciation-happy agents are quite abundant here because that is a big upside to investing in the Atlanta area. With cash-flow so sparse, this is becoming a focus for many investors and agents in the area. That being said, there are those of us still out there who would not bet on appreciation ourselves thus will never ask a client to do so (unless that is the client's goal). Cash-flow and decent spreads do still exist if you know where to look and are prepared for the ensuing bidding wars. You might even get one that slips through the cracks. One of my clients closed on a deal last month that was about $75k with $1k/mo rent that had been on the market for a few months. It only needed a few grand in repairs. Definitely more of an exception than the rule here but these deals do still exist if you're diligent and patient.
Now, if you're real serious about finding multiple deals in a shorter span of time here, you will want to go the off-market route. I'm not talking wholesale deals since these seem to be even more sparse than market deals. You'll want to start your own marketing campaign, but remember you will be battling with all the wholesalers and agents who are doing the same. Therefore, you will want to get real specific with your campaign and try to hone in on a niche that is not yet saturated.
Lastly, keep in mind, just because you aren't buying deals left and right does not mean you aren't being productive and moving closer to your goals. If the deals aren't coming and you're doing your best to find them, that is out of your control. So, focus on things that are within your control, like expanding your network and education. Make sure you are positioned so that the moment a deal does come up you're ready to go. That's the name of the game here in Atlanta.
Hope this helps a bit. Please, feel free to reach out anytime if you have questions or just want to chat!
First of all, I love your mentality as it's very close to the way I think. Focus on the "controllable" and keep your work ethic and attitude up.
Second of all, this is a great insight. Even hearing the small stories of people's experience in ATL specifically, helps a ton for a bit of perspective. Thanks for taking the time out of your day to help here!
New to Real Estate · Atlanta, GA · Member since 2020 · 13 posts · 7 votes
5y
Hi @Brenden Mitchum, thank you for that! It is true, REI is not a get rich quick thing, deals won't come left and right. I am a naturally eager person, but am willing to be patient and work on it every day. I will also definitely be employing off-market strategies once we get there but those are harder to do 2000+ miles away haha
I love that Atlanta is a hot market, truly can't wait to get there for reasons outside of real estate too. Thanks for your post, it was encouraging and informative! I will probably plan to set an aggressively wide radius of anything a 30 minute drive from the Atlanta circle since I'm no stranger to those types of commutes being in Los Angeles... From what I've gathered, the north is nice but expensive, the south is growing, the west has opportunity neighborhoods, and the east is all over the place? PLEASE correct me if I'm wrong.
Real Estate Broker · Atlanta, GA · Member since 2016 · 200 posts · 75 votes
5y
Ryan, I have a slightly different take. We invest in any opportunities throughout metro Atlanta. We have bought a fire-damaged house in Winder for $20k and a ranch in Buckhead we are popping the top on. Across the board, deals are there if you learn the market(s). That can often be hard in a city of Atlanta's size as it is hard to pick an area or property type and narrow it down. Whether on market or off, there are some opportunities for cashflow even in the SFR range depending upon your price point. I suggest you narrow your search area and price point. Happy to talk further with you if you want to pick our brains here. We invest for ourselves but also source properties for Invitation, Tricon, SFR3 and others. Best of Luck.
Appreciate your take here. I figure that with most properties to cash flow ITP heavy renovation is needed or converting properties that lay within a zone that is flexible.
Real Estate Agent · Atlanta · Member since 2018 · 137 posts · 69 votes
5y
@Josh Stralko
If you're only looking for already-renovated, move-in-ready properties in/around Atlanta, then yes you're right that good cash flow will be very hard to come by. You'll have to be willing to either 1) expand into more rural areas outside metro Atlanta, and/or 2) take on a decent sized rehab project in order to make the numbers work for generating cash flow here.
Realtor · Atlanta, GA · Member since 2020 · 42 posts · 19 votes
5y
Hi @Josh Stralko. From my experience here in the Atlanta metro area, in order to find good cash flowing properties, you either have to go off market or be willing to do some work to create a cash flowing property. Sam is absolutely correct in that its definitely possible to cashflow with the right type of property and the right amount of renovations. I recently bought a SFH that I am in the process of converting to a duplex but its not been easy or quick. All the contractors are slammed with work at this time and therefore its really difficult to get any good work done in a timely manner.
Investor · Atlanta, GA · Member since 2018 · 104 posts · 116 votes
5y
@Josh Stralko Hey Josh and others in the thread, I understand the feeling in a relatively newer market for you. I trust the breakdown below will give you some hope in ATL.
I am a licensed RE Agent working with an investment brokerage in Atlanta wholesaling deals to BRRRR and flips investors. I have a deal on the table right now in Atlanta 30315 and find these types of deals quite consistently for my buy and hold investors. PP-125k, Rehab-24k, ARV-170k, est. rent $1400. Using standard assumptions this is a deal that will cash flow at >$420/month with 28k in the deal =17.61% CoC return. This is pretty typical of our deals, of-course with some variance based on condition and area. So as to better understand the market and base your expectations I hope this example deal helps.
