Reynoldstown Atlanta: foreign investor needs help

6 Replies

Hello BP Members.

My very first BP post goes to Atlanta BP members.

I’d like to get in touch with local investors and developers that are familiar with Reynoldstown area.

There is a residential development opportunity I’m considering and would like to hear your thoughts on that market.

Although my own research found good aspects to sustain a move forward decision, there is nothing better than locals’ knowledge.

The types of questions I have are:

1.How do you perceive Atlanta home ownership rate outlook compared to the US home ownership rate decline trends?

2.What are the bad things about Reynoldstown area that no one talks about?

3.What are the top 3 things investor should be aware of when investing/developing in Reynoldstown/Atlanta?

4.What’s the 2016 outlook for Atlanta residential sales activity and price growth?

5.How much exposure does the micro region to Fed’s incoming interest rate rise?

6.How attractive the area really is for households profiles with annual incomes greater than $80K?

7.How strong the demand for $500K+ townhomes (such the Axis project at Delkab Ave) really is?

8.What appeal does modern look architecture such the project above has locally compared to traditional architecture such RTown Lane project at Kirkwood ave?

9.What rent rates should the Greystar multifamily project get at Moreland Ave (across the street from Edgewood Retail District)?

10.Who are the top residential 2 brokers in Reynoldstown area that I should talk?

I haven’t been in Atlanta yet, and I’ve been trying to get as much knowledge about the market as possible prior to jumping into a plane. 

I’m based in Brazil, so this is like “out of state investing”.

Looking forward to hear your thoughts.

Many thanks!

L

About myself: I’ve started my career in 2004 as an architect and since 2009 I’ve been focusing on ground up development. I’m currently developing a 224 unit condo project close to Sao Paulo International airport, and a downtown renovation project converting a 80,000sf+ empty building into 201 affordable units.

Personal goal: I’m interested in diversifying my portfolio in the US (and learn about it) and building a long term relationships along the way.

Bom Dia! Como vai voce

Welcome to BiggerPockets! You asked some loaded questions in your first post. I am gonna try my best to explain your questions. 

A little bit about Reynoldstown, GA

Reynoldstown has changed a lot over the last couple years especially in the last 3-4 years. There have been a whole lot of investor activity around Cabbagetown, Edgewood, Kirkwood, Reynoldstown due to the Beltline and people in general wanting to stay inside the perimeter attract new families, empty nesters, students etc. Check out Curbed articles on Reynoldstown and you will get a sense of what I am trying to say. 

1.How do you perceive Atlanta home ownership rate outlook compared to the US home ownership rate decline trends?

1. Homeownership rates by region. Homeownership in the south have averaged around 67.9% since 1965. In general homeownership depends on accumulating funds for down payment, credit availability and x# of other factors. Lately, the prices have gone up significantly for example Metro Atlanta are up 51% from the bottom of 2012. In general the higher prices it becomes difficult for families to fund the down payment. As a result of which most people rent. Historically, the vacancy rates are going down and the homeownership rates are declining. However, Georgia State Economic forecasting center predicts more jobs in Georgia. According to the census bureau Metro Atlanta has #2 Population between age 25-39 and #5 population under 20. Baby boomers are coming closer to move to their grandchildren and population is moving from rust belt to sun belt states and according to ARC 20 City Metro Atlanta Population will double in next 30 years. So in general Atlanta is a good place. However, if the prices keep rising it will become difficult for families to afford homes. In addition, the future interest rates are trending towards increasing this will significantly impact the home affordability. 

2.   What are the bad things about Reynoldstown area that no one talks about?

2. Used to be some crime but the area has since significantly changed. Can't think of one. 

3. What are the top 3 things investor should be aware of when investing/developing in Reynoldstown/Atlanta?

  • Buy Right - Don't overpay. Market is heated things get picked up quickly don't buy at higher prices 
  • Don't underestimate time to for permits in City of Atlanta 
  • Get necessary permits before you go cutting trees

4. What’s the 2016 outlook for Atlanta residential sales activity and price growth?

4. Home values have gone up significantly and most properties are overvalued. The inventory levels are low now but more homes are being constructed to meet the demand. Home prices may peak in 2016. However, if there interest rates rise the prices will normalize and expect a steady growth and I wouldn't expect crazy property appreciation. 

5. How attractive the area really is for households profiles with annual incomes greater than $80K?

5. The area attracts single professionals, students, empty nesters. The median income is around 54K in the area. 

6.How strong the demand for $500K+ townhomes (such the Axis project at Delkab Ave) really is?

6. Demand is strong but don't know for how long. There is 7.5 months of inventory for homes between 500k -1M. However, there is more demand in the 200-500k range.  Homes in the 500k and up range tend to sit longer on the market. 

7. What appeal does modern look architecture such the project above has locally compared to traditional architecture such RTown Lane project at Kirkwood ave?

7. Lately, the trend is more on the modern architecture style. More and more properties are getting the modern look. There are some craftsman style homes as well. 

8. What rent rates should the Greystar multifamily project get at Moreland Ave (across the street from Edgewood Retail District)?

8. Rental Rates ~$1200-$1900

Hope the above answers your questions. 

How is the Brazil Real Estate Market? What kind of returns are you seeing your market? What kind or returns are you expecting to see in the Atlanta market based on your research?

Good Luck and see you around the BP forums. 

@Leandro Abreu...Welcome to Bigger Pockets! Wow! You just jump right in the deep end, head first, huh?! I like it! 

Seriously, I believe Azeez answered your questions adequately. He mentioned "The Beltline". I'm sure you're aware that this is the largest urban redevelopment project in the nation. I took "The Beltline Tour" a couple weeks ago, and our tour guide lives and works in that area (Ansley Park, I believe). I don't know anything about his work, but he was an awesome tour guide. It was great to see the project from a realtor's perspective. He's the only realtor I know who specializes in that particular area, and is well versed on it. His name is Derek, and his company is The Beltline Team. If you contact him, do let him know I referred you. 

I'd like to add: I working with the largest wholesaling company in the SE region. We are direct to the seller, and have tons of off-market properties and lots in that area. As I'm sure you are also aware, approx 93-95% +/- of all properties for sale aren't listed on the MLS. They are off-market. That is where you pick up the good deals. If I can be of any assistance, give me a shout. I'd be glad to help.

Leandro, thanks for a great set of questions. I'm relatively new to BP as well and just have to say Azeez, that was a really well-crafted and helpful post. Thank you!

@Azeez K. tudo ótimo. Obrigado. 

Many thanks for your insights.  I could find tons of interesting articles on Curbed about Reynoldstown and some projects that are going on. Very very helpful.  As curiosity, where did you pull the information about the zip code 30316? 

About your interest in my market: 

Brazil has entered into a recession and is now fighting against a political crisis, where congress and president can't agree on fiscal adjustments that must be made to "stop the bleed", Not to mention that currency devalued over 50% in the last 18 months (think of inflation in a recession environment), unemployment rise, and interest rate up at 14.25%, hence credit became scarce and expensive.

In this light, construction industry, that represents 10% of our GDP, is among the ones that are suffering the most: prices going down, growing unsold inventory (24 months in certain zip codes), etc. It's almost a perfect storm.

In terms of returns, I've been able to generate mid 20'% IRR returns as my projects started in 2011/2012. I see many hedge funds providing mez debt at 20%+ returns with significant collateral. Not a bad deal. However, when you put into perspective our Fed interest rate, it's not a huge premium to the level of risk the market offers.

Brazil is a great place for vacation though! 

Given that scenario, I'm looking overseas and expect I can get similar returns (25-30%IRR) in Atlanta.

@Cynthia Calhoun , I wasn't aware of the Belt Line project - thanks for the heads up. Seems it's already resulting in material transformation in certain areas of east Atlanta.

Cynthia, please email me more info about lots you have in and around Cabbage town/Reynoldstown are, or others areas: they must be at a walking distance to the Marta and retail, 1-4 acres, and fully entitled, and zoned for townhomes.

Again, many thanks for you help!

Originally posted by @Azeez K. :

Bom Dia! Como vai voce

Welcome to BiggerPockets! You asked some loaded questions in your first post. I am gonna try my best to explain your questions. 

A little bit about Reynoldstown, GA

Reynoldstown has changed a lot over the last couple years especially in the last 3-4 years. There have been a whole lot of investor activity around Cabbagetown, Edgewood, Kirkwood, Reynoldstown due to the Beltline and people in general wanting to stay inside the perimeter attract new families, empty nesters, students etc. Check out Curbed articles on Reynoldstown and you will get a sense of what I am trying to say. 

1.How do you perceive Atlanta home ownership rate outlook compared to the US home ownership rate decline trends?

1. Homeownership rates by region. Homeownership in the south have averaged around 67.9% since 1965. In general homeownership depends on accumulating funds for down payment, credit availability and x# of other factors. Lately, the prices have gone up significantly for example Metro Atlanta are up 51% from the bottom of 2012. In general the higher prices it becomes difficult for families to fund the down payment. As a result of which most people rent. Historically, the vacancy rates are going down and the homeownership rates are declining. However, Georgia State Economic forecasting center predicts more jobs in Georgia. According to the census bureau Metro Atlanta has #2 Population between age 25-39 and #5 population under 20. Baby boomers are coming closer to move to their grandchildren and population is moving from rust belt to sun belt states and according to ARC 20 City Metro Atlanta Population will double in next 30 years. So in general Atlanta is a good place. However, if the prices keep rising it will become difficult for families to afford homes. In addition, the future interest rates are trending towards increasing this will significantly impact the home affordability. 

2.   What are the bad things about Reynoldstown area that no one talks about?

2. Used to be some crime but the area has since significantly changed. Can't think of one. 

3. What are the top 3 things investor should be aware of when investing/developing in Reynoldstown/Atlanta?

  • Buy Right - Don't overpay. Market is heated things get picked up quickly don't buy at higher prices 
  • Don't underestimate time to for permits in City of Atlanta 
  • Get necessary permits before you go cutting trees

4. What’s the 2016 outlook for Atlanta residential sales activity and price growth?

4. Home values have gone up significantly and most properties are overvalued. The inventory levels are low now but more homes are being constructed to meet the demand. Home prices may peak in 2016. However, if there interest rates rise the prices will normalize and expect a steady growth and I wouldn't expect crazy property appreciation. 

5. How attractive the area really is for households profiles with annual incomes greater than $80K?

5. The area attracts single professionals, students, empty nesters. The median income is around 54K in the area. 

6.How strong the demand for $500K+ townhomes (such the Axis project at Delkab Ave) really is?

6. Demand is strong but don't know for how long. There is 7.5 months of inventory for homes between 500k -1M. However, there is more demand in the 200-500k range.  Homes in the 500k and up range tend to sit longer on the market. 

7. What appeal does modern look architecture such the project above has locally compared to traditional architecture such RTown Lane project at Kirkwood ave?

7. Lately, the trend is more on the modern architecture style. More and more properties are getting the modern look. There are some craftsman style homes as well. 

8. What rent rates should the Greystar multifamily project get at Moreland Ave (across the street from Edgewood Retail District)?

8. Rental Rates ~$1200-$1900

Hope the above answers your questions. 

How is the Brazil Real Estate Market? What kind of returns are you seeing your market? What kind or returns are you expecting to see in the Atlanta market based on your research?

Good Luck and see you around the BP forums. 

 Azeez,

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