I'm posting in RE Success Stories but I really only have the first part done.
Like many others around here, I had a hard time choosing what path of RE investing to go down. I ended up choosing the BRRRR strategy.
My next problem was location. The area I live in Atlanta is HOT. There are no 2% deals here in Metro Atlanta. Hell, you'd be lucky to find a 1% deal. Most homes rent for less than 1% of purchase price in our market.
As Brandon and Josh constantly say on the podcast, if you drive a couple hours from your home city, you will find a good opportunity.
We then focussed on some surrounding areas only to be less than excited about what we found and the prices remained higher than we were willing to pay.
As I started to slow the search down, we found an emerging market about 3 hours from our house...Augusta, Ga. This little city is ready to grow. Job growth is there along with city planning willing and able to accommodate the upcoming expansion.
Like other cities, Augusta has some good and bad areas. We were lucky enough to find an older home in need of some work listed for $80K in one of the good areas. We offered $57K and with a counter of $60K, we gladly accepted their terms.
The home, without repairs and before closing, appraised for $75K. I already have $15K in equity without swinging a hammer! After repairs, I anticipate the home to appraise in the $120-$140 range.
Here is the kicker, the home actually has a secondary home on the property we call the cottage. We plan on turning the cottage into an Airbnb hoping to hit a HR during Masters Week in Augusta while having a permanent tenant in the main house. I should be able to get 2% on the main house allowing the cottage to just be icing on the cake. There are hospitals, an army base, a university, amongst other things helping support the Airbnb theory.
There is some work to be done on the home. I know finding contractors can be a task. Any suggestions on finding contractors would be great!
I really appreciate the podcast and countless articles/blogs/forums on the site. Without all of the great ideas, I would be nowhere closer to passive income and financial freedom! My wife and are quite excited and just about ready to start shopping for investment home #2 and rounding out the last R in the BRRRR strategy!
congratulations on taking the first step @Brian Eilering
A few ideas on finding contractors
1. If you can find a local REIA in Augusta,Ga, go network and ask for referrals. That's the best way, I know it's tough to drive 6 hrs back/forth for meetings.
2. Search on BP for active investors in that area. Reach out to them, and ask if they would share.
3. I have used homeadvisor.com, yelp and a new website I came across, thumbtack.com recently to find specialty contractors (such as masonry, well/septic etc) after exhausting my current network.
I had pretty good success with thumbtack recently.
4. J Scott mentioned in his book; going to HD early in the morning, those contractors who show up early usually are dependable. Ask the PRO desk for referrals as well.
5. CL is kinda sketchy now. If you're desperate, you could post there.
As always vet, vet, vet the contractors.
Hi @Brian Eilering , congrats sounds like a great deal based on the purchase price and ARV value . Did you also earn a commission since you are a licensed agent as well? Also what do you expect repairs to be ?
Sounds like you might have good potential for future appreciation as things appear to be growing in the area .
Before I start, I have not figured out how to @ (mention) someone, I'll take some instruction for that part as well...
Thank you Chris for the suggestions on finding contractors. I think those are some great ideas. I will definitely reach out to some of the other BP investors in the area and see if they have a suggestion or two.
I am actually applying my commission from the sale to the closing on the home. My cash to close is essentially $1800 less than it normally would be.
As for repairs, most of the house is in reasonable shape. I will need to redo two baths in the main house and the kitchen in the main house as well. The floors and walls are in pretty good shape. I intend to refinish the floors and repair a little drywall. All in all, I hope to get all repairs on the main house done with about $20K...hopefully less.
The cottage needs more repairs but of course it considerably smaller. Maybe another $10K on that house.
I should be all in at $90K and have an ARV hopefully closer to the $140 mark...could be higher. A house a couple doors down is on the market for over $200.
Thanks for all the feedback, it is much appreciated!
I have nearly completed the main house on the property and will be addressing he accessory unit later this week. I do believe it is time to start the third "R" on the BRRRR strategy, refinance.
For those that have executed this strategy, how did you find your lender? Did you try to stay local or go with a larger outfit maybe one of the ones advertised on the podcasts?
We ended up purchasing with cash and would like to cash out for the next property. Thanks again!
Howdy @Brian Eilering
Congrats on your progress.
First, let me answer your question about tagging people with the "@" symbol. Type the @ then immediately type the first four letters of their first name (no spaces). A list of people (with their picture) will appear near the top left of your current post. Just scroll over the name you want and left click on it. Bingo! That person is now tagged in your text.
As far as the Refi Lender goes I strongly recommend you get pre-qualified for the Refi loan prior to purchasing the property. Obviously, that will not work for you in this deal. The reason is I want to have a good idea what my rate and terms are going to be in order to better analyze my projected Cash Flow with the new loan. It also makes the whole process less stressful. That being said I like using small local banks and credit unions for the Refi. But, shop around for the best deals. Even some larger lenders may provide what you need.
OK, thank you very much @John Leavelle . I see now, quite easy, thanks for the tip.
I will shop around the area my house is located. I live in Atlanta and travel back and forth. I have been looking on line for lenders and can't seem to find exactly what I'm looking for. Maybe I will try the credit union route. Thanks again.
Congrats on your first deal. Please, do share your success when you are done.
Like you, I live in Atlanta and I've been looking for the first deal for buy and hold. It is really difficult to find a good cash-flowing property in the area. I'm very happy that you were able to find what you wanted!
Hi @Jinwon Hensley . As a real estate agent searching for investment properties for some investor clients of mine, I am familiar with the struggles of finding deals in the Metro Atlanta area. The deals are few and far between. When they come on the market, I have seen as many as 20 offers. I saw the writing on the wall locally leading me to change directions.
I expanded my search to surrounding areas. You can check Rome, Cartersville, and along the belt line through Atlanta. Rome has a couple colleges near by which was appealing to me. Their job growth was not as promising to me as Augusta. Augusta is a bit further away but I am managing. I essentially go from Tue through Thur/Friday and have a trusted guy on site.
Good luck as you continue, I am more than willing to share my experiences.
Hi @Brian Eilering ,
Congrats on the deal! I'm curious, what area is the property located? Good call on Augusta, lotsa job growth for sure..
@Brian Eilering Just wanted to say congrats on your first purchase! It sounds like it's going to be a nice little investment!
Sounds like an incredible deal @Brian Eilering ! I wish you the best, please post as you make progress!
@Chris Majors the house is off of Wrightsboro Rd in between Trinity Hospital and the VA Hospital. Close to downtown on a very quiet street. Not sure if you know the area but it's a nice little area we've come to like very much.
I like that area too @Brian Eilering . I think you will do well there as a buy and hold. Please keep us updated on the AirBnB cottage. If you have good luck with it I'd like to replicate it, lol.
Great story @Brian Eilering !
Congrats on the purchase. My wife and I are currently looking for a 3rd rental property in the Augusta market. Our first 2 are on Kissingbower and a duplex on Mcdowell, so not too far from where you bought.
We have considered the airbnb route as well in the area and would be very interested to hear about your experience. There is some talk about Trinity Hospital being bought out and turned into a cancer center by one of the larger hospitals in the area. If this is the case I believe the airbnb may turn out quite well for families of patients who would like to stay close by.
Good Luck and keep us posted on your progress.
@Brian Eilering Thanks for sharing. this helps all of us newbs out. I am in a similar boat in utah.
I just came back from Augusta and was on Kissingbower several times. It is right around the corner from my house @Winn Merwin . I actually looked at a home close to the railroad tracks on Kissingbower. I like that area, just don't want to get too far on the "other side of the tracks".
We are about a week away from the main house being completed and I have begun marketing it for rent. Hope to have renter in place before completion.
The rear house needs some roof work. Do you have any recommendations in the area?
Hi! I live in Augusta. Congrats, and I agree about our market. I own a home, and I'd be happy to talk about sharing good repair people. amanda.the.reader at gmail.
Agreed. There is certainly a change in quality of properties as you head down the hill on Kissingbower.
Both of the rentals we have purchased had a newer roof at time of purchase. I have not personally had to use any of the roofing companies in the Augusta area.
@Joel C. has done buy and hold rehabs in the Augusta area and he may know a quality roof guy.
To be perfectly honest, the only roofing guy I've used wasn't someone I'd recommend and has since gone out of business.
I've heard through many local REIA members that All South Roofing or Bobby Lass are the places to go, but I can't personally vouch from experience. You should be able to find both on Facebook.
While keeping an eye on our farm area, I saw that the main home has now been listed for rent. Congrats! The pictures of the reno look great. I hope you get your asking price.
My wife and I bought a small home 5 doors down from your's in December. We have since rented it out. It really seems like that whole street is turning over in a good way.
Have you had any luck with the airbnb cottage yet? Or is that still in the works?
Are you looking for the next property in the area yet or still trying to stabilize this one?
Looking forward to hearing about the progress.
Sorry for the delayed response. I had stepped away from the forums for a little while. My apologies!
We are getting $950 for the main house and are pretty happy with it! I have gone through so many contractors, we are now shopping for another one to put our cottage back together. I either don't trust the ones we have used or don't like their speed. We just haven't found one we like.
Which house is yours? Go up and down Stovall St all the time.
The one next door to me is being renovated fully. It is a triplex plus a cottage.
There is one across the street and a couple doors down that is also under a full renovation.
There were three homes under full renovation on John's Rd as well (just one street over). The whole area is doing great! I will be cashing (cash out refinance) out soon and all of this rehab work is going to help.
I will be headed back to Augusta this coming Sunday and staying a day or two. Would love to chat if you will be around.
@Brian Eilering congrats on the success. I have just received my PSA for an Augusta investment property. I am still looking for contractors but I about to deploy so search has been more compiling and less vetting. Good luck if you have any recommendations ill take them all.
I wish I had some contractors for you. Decent ones are very hard to come by in the area. The cottage referenced above has been put on hold due to this fact. I haven't felt comfortable enough with any of them to give them such a project. I have a handyman doing solid work for me but is slower than you could ever imagine. It would take him a year to finish this project for me.
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