How to rehab an entire area

Question

Hello everyone,

I am a beginner level investor in Atlanta, Ga.  I have an idea to purchase quite a bit of SFH in an area within walking distance from a college and turning them into college housing. The property values aren't very high and the area has quite a bit of abandoned and boarded up homes.

I believe that if I can purchase the majority of the boarded up houses on 2 or 3 of the closest streets to the school and fill them with college students, it will be abetter look for the school and raise the value of the area and ultimately be great income investment.

The problem I am facing is that I am beginner and I do not have access to enough of funds to do this on my own. Even if I am being creative and offer to partner with the owner of the property in exchange for completing the rehab, funding would still be a problem. The area has a long history of college housing that does well during the school year so Im confident that it would be a good investment. On top of that the Georgia Dome is in the process of being build which will make the surrounding areas more desirable. Does anyone have any suggestions on how i should go about finding funding for something of this nature? Any help or advice would be greatly appreciated. Thanks in advance.

Mike H. · Answer

If you're that confident, then I'd say to go for it. But I think you're going to have to do it one house at a time in order to prove to someone that its doable. And, then, the real hard part is that you're going to have to sell the first few student occupants that you're going to be bringing the entire area back.

Thats the sale I think you're going to have to make. Nobody is going to fork over the money that would be needed to convert an entire block or several blocks.

And if they were, they would not be the type of entity that would want to cut you in on the deal. They'd likely be a large corporation or hedge fund that would want no part of a partnership on the deal.

So that might be another thing to consider. If you offer the idea up to too many people, you eventually run the risk of being cut out entirely. If you go for it one at a time, then maybe a bank or some other investor might be willing to stake the investment once you've done 2 or 3 and can show that its working and making money.

Curt Davis · Answer

Your best bet would be to find a private lender who will finance this project for you. Your biggest hurdle is you have no track record and would be considered too large a risk and project for someone who is new.

You might try to find another investor who will partner with you on the deal and split profits.

Good luck

You might try to find another investor who will partner with you on the deal and split profits.

Good luck

Fitzgerald Hall · Answer

@Rick Baggenstoss I would love to connect and send you over any deals that would fit your criteria.

Rick Baggenstoss · Answer

I am.  I also invest in Historic West End.

Fitzgerald Hall · Answer

@Rick Baggenstoss This is very true. Thanks for the advice. I see that you are from Decatur. Are you active in the area?

Rick Baggenstoss · Answer

When the big investors jump in, they'll more likely build apartment buildings/condos.  If you're early, you've done good work, made lots of friends in the area, know all the homeowners and the situation with every house, then you'll be in great shape to further your vision more.

You really want competition there.  It will help you accomplish your goals without being the one to put all the money in.

Steven Burrows · Answer

I'm from NY, and somewhat interested. What's the price range of the houses you're looking at?

Fitzgerald Hall · Answer

@Rick Baggenstoss My fear is that the big investors will catch on quickly and and beat me to it. Another is that since the dome is coming soon, prices will rise dramatically.

Rick Baggenstoss · Answer

Definitely one at a time in the beginning.  You could work the are for years.  Turn arounds don't happen that quickly in real estate so you just need to build up your momentum.  The vision is doable, but it's a long road.

How to rehab an entire area

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