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Josh Harris
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Investing in Atlanta, GA and surrounding areas

Josh Harris
Posted Dec 3 2023, 14:50

I currently have around 200k in cash that is yielding 5 percent in my brokerage account. I'm thinking of using that same money to potentially buy a rental property that could yield more and appreciate in value over the years. I figure it could be a decent time to buy soon while it seems to be somewhat of a buyers market given high rates as I could be cash buyer. I am however, a total newbie when it comes to real estate investing and it would be my first rental. That having been said, I want to avoid any rookie mistakes. I'm in Atlanta, GA which gives me fewer options with that budget unless I go with condos with HOA's that allow rentals, or venture out to towns outside of Atlanta like Macon, GA, Athens, Lagrange etc... That having been said, are there any tips from experienced investors in Georgia with suggestions of where I should be looking to buy? I even get tempted out of state in places like Alabama, South Carolina because real estate is so much cheaper there but continue to hear its best to have a rental around 45 min away or so.. Any tips/insight much appreciated! Thanks so much!

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AJ Exner
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  • Lender
  • Springfield, MO
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AJ Exner
Pro Member
  • Lender
  • Springfield, MO
Replied Dec 3 2023, 20:16

Hey Josh,

Completely biased, but real estate is definitely a great option and Atlanta certainly has its pros and cons. 

In Atlanta, anything with an HOA is likely going to rip apart any cashflow/DSCR that you might have and make financing kind of tricky. You obviously want to grow your portfolio as soon and as much as possible, but getting most of it tied up in a couple of non-CF condos could be detrimental.

Honestly, I have a number of clients in Atlanta suburbs and GA, being aware of lenders that have minimum property values that they will lend to. Even if you were to BRRRR something, its a great way to stretch your dollar while still maximizing leverage and cash flow. Particularly, parts of AL have been great for a number of my clients.

I wouldn't be too concerned about the distance. There are plenty of out-of-state investors that are able to manage from much farther distances, so you should be fine there. But, it would put additional pressure on finding a good team to help oversee everything.

Atlanta is a hot market, but it is also very competitive. Don't force a deal to happen there, and willingness to expand your search and find something good might really be beneficial for you as you look to invest.

Good luck!

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Tiffany Vogel
  • Rental Property Investor
  • Newnan, GA
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Tiffany Vogel
  • Rental Property Investor
  • Newnan, GA
Replied Dec 4 2023, 03:35

Hi Josh! 

My husband and I are full time investors in Newnan and Lagrange and have made great returns. If you're interested in deals down this way I can connect you with a great agent, attorney, etc to help you get started

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Josh Bowser
  • Real Estate Agent
  • Atlanta, Ga
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Josh Bowser
  • Real Estate Agent
  • Atlanta, Ga
Replied Dec 4 2023, 05:07

Hey Josh - sounds like you're in a great position!

If you want to buy close to Atlanta - you're best chance for yield is likely going to be townhomes that are currently owned by investors that are rented to voucher backed tenants. Many of the HOAs across the metro at that price point do not have inhibitive rental restrictions.

I would strongly urge you to avoid areas with flat or declining population in areas like Macon. Most of the time, markets are cheap for a reason - keep that in mind. If you're going to go to Macon, take a look at Warner Robins. 

Areas like Newnan, LaGrange, Carrollton are fair game and solid markets from a demographics and price to rent stand point. You can find nice rentals in these areas at your price point.

Rookie mistakes to avoid:

- Buying cheap properties, just because they are cheap.

- Buying in areas that have negative population growth

- Trying to do everything yourself

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Greg Parker
Property Manager
  • Realtor
  • Montgomery, AL
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Greg Parker
Property Manager
  • Realtor
  • Montgomery, AL
Replied Dec 4 2023, 06:23

glad to answer any question about Montgomery, Alabama.  

Alabama has the second lowest property taxes in the nation behind Hawaii.

gp

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Cody Lekberg
  • Realtor
  • Macon, GA
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Cody Lekberg
  • Realtor
  • Macon, GA
Replied Dec 4 2023, 17:49
Quote from @Josh Harris:

I currently have around 200k in cash that is yielding 5 percent in my brokerage account. I'm thinking of using that same money to potentially buy a rental property that could yield more and appreciate in value over the years. I figure it could be a decent time to buy soon while it seems to be somewhat of a buyers market given high rates as I could be cash buyer. I am however, a total newbie when it comes to real estate investing and it would be my first rental. That having been said, I want to avoid any rookie mistakes. I'm in Atlanta, GA which gives me fewer options with that budget unless I go with condos with HOA's that allow rentals, or venture out to towns outside of Atlanta like Macon, GA, Athens, Lagrange etc... That having been said, are there any tips from experienced investors in Georgia with suggestions of where I should be looking to buy? I even get tempted out of state in places like Alabama, South Carolina because real estate is so much cheaper there but continue to hear its best to have a rental around 45 min away or so.. Any tips/insight much appreciated! Thanks so much!


 Hey Josh, I'm the preferred agent for the Macon Area here on Bigger Pockets. I'm working with a lot of investors in the Macon, Warner Robbins, Forsyth area. I'd be happy to talk with you about what's going on here in Macon if you would like. There's a lot of cool stuff going on here in Middle Georgia! 

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Mark Faulkner
  • Real Estate Consultant
  • Roswell, GA
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Mark Faulkner
  • Real Estate Consultant
  • Roswell, GA
Replied Dec 7 2023, 11:16

Hi Josh!

You are heading in the right direction with your interest in Real Estate as an investment vehicle. Yes, you are right, there are some buying opportunities given the current market conditions. Given this is your first investment endeavor, I would highly recommend going with an experienced and reputable management company that will mitigate your risk when the not-so-fun parts of property management arise. There are a multitude of risks they can help you navigate.

I am an experienced investment consultant, investor myself, and Director of operations for a large property management company here in Atlanta (9,000 homes). I would like to talk when you can, so let's set something up and I can show you a few things! Nice to meet you!

Mark Faulkner

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Rosston Smith
  • Investor
  • Warner Robins, GA
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Rosston Smith
  • Investor
  • Warner Robins, GA
Replied Dec 7 2023, 14:02
Quote from @Josh Harris:

I currently have around 200k in cash that is yielding 5 percent in my brokerage account. I'm thinking of using that same money to potentially buy a rental property that could yield more and appreciate in value over the years. I figure it could be a decent time to buy soon while it seems to be somewhat of a buyers market given high rates as I could be cash buyer. I am however, a total newbie when it comes to real estate investing and it would be my first rental. That having been said, I want to avoid any rookie mistakes. I'm in Atlanta, GA which gives me fewer options with that budget unless I go with condos with HOA's that allow rentals, or venture out to towns outside of Atlanta like Macon, GA, Athens, Lagrange etc... That having been said, are there any tips from experienced investors in Georgia with suggestions of where I should be looking to buy? I even get tempted out of state in places like Alabama, South Carolina because real estate is so much cheaper there but continue to hear its best to have a rental around 45 min away or so.. Any tips/insight much appreciated! Thanks so much!


Hey Josh! My company signs long term leases with investors to lock in great returns with them. Reach out to me and if you're interested I can advise you on what we're looking for. Thanks

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Michael Smythe
Property Manager
#5 Managing Your Property Contributor
  • Property Manager
  • Metro Detroit
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Michael Smythe
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  • Property Manager
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Replied Dec 8 2023, 07:03

@Josh Harris

When investing in areas they don’t really know, investors should research the different property Class submarkets. If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

Our OPINION for the most markets (always verify each area for yourself!):

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect

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Josh Harris
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Josh Harris
Replied Dec 8 2023, 12:21
This is fantastic advice thank you so much for sharing your insight!

Quote from @Josh Bowser:

Hey Josh - sounds like you're in a great position!

If you want to buy close to Atlanta - you're best chance for yield is likely going to be townhomes that are currently owned by investors that are rented to voucher backed tenants. Many of the HOAs across the metro at that price point do not have inhibitive rental restrictions.

I would strongly urge you to avoid areas with flat or declining population in areas like Macon. Most of the time, markets are cheap for a reason - keep that in mind. If you're going to go to Macon, take a look at Warner Robins. 

Areas like Newnan, LaGrange, Carrollton are fair game and solid markets from a demographics and price to rent stand point. You can find nice rentals in these areas at your price point.

Rookie mistakes to avoid:

- Buying cheap properties, just because they are cheap.

- Buying in areas that have negative population growth

- Trying to do everything yourself

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Cody Lekberg
  • Realtor
  • Macon, GA
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Cody Lekberg
  • Realtor
  • Macon, GA
Replied Dec 9 2023, 06:23
Quote from @Michael Smythe:

@Josh Harris

When investing in areas they don’t really know, investors should research the different property Class submarkets. If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

Our OPINION for the most markets (always verify each area for yourself!):

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect

This is a great breakdown! Do you have a good way to collect this type of data (Vacancy rate, Typicla FICO score, trade lines, etc.)? 

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Michael Smythe
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#5 Managing Your Property Contributor
  • Property Manager
  • Metro Detroit
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Michael Smythe
Property Manager
#5 Managing Your Property Contributor
  • Property Manager
  • Metro Detroit
Replied Dec 9 2023, 07:50

@Cody Lekberg much of it can be applied anywhere.

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Katlynn Teague
  • Real Estate Agent
  • Atlanta, GA
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Katlynn Teague
  • Real Estate Agent
  • Atlanta, GA
Replied Jan 2 2024, 05:39

Hey Josh! I would love to connect with you, I specialize in the Atlanta market and am based in Brookhaven. Feel free to reach out, I sent you a DM! 

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Replied Jan 3 2024, 05:20
Quote from @Mark Faulkner:

Hi Josh!

You are heading in the right direction with your interest in Real Estate as an investment vehicle. Yes, you are right, there are some buying opportunities given the current market conditions. Given this is your first investment endeavor, I would highly recommend going with an experienced and reputable management company that will mitigate your risk when the not-so-fun parts of property management arise. There are a multitude of risks they can help you navigate.

I am an experienced investment consultant, investor myself, and Director of operations for a large property management company here in Atlanta (9,000 homes). I would like to talk when you can, so let's set something up and I can show you a few things! Nice to meet you!

Mark Faulkner

Hey @Mark Faulkner

I am also in Roswell and would love to chat sometime.  

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Abel Aberra
  • Investor
  • Snellville, GA
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Abel Aberra
  • Investor
  • Snellville, GA
Replied Jan 5 2024, 07:10

Josh,

I'm sort of in the same boat I owned rentals in the past.

I had the idea these housing prices would start coming back down to earth sooner; I'm currently in a home that I planned to rent when I purchased it. It's a 4/2.5 home with a pool and a nice backyard (an older home that needs to be remodeled a bit) and a great school cluster. It's on a 3.2% rate) 30-year conventional, with a good amount of equity (I purchased it in the COVID-19 summer of 2020). 

In the meantime, I'm putting all my "real-estate investment" cash into 4-week T-Bills at 5.3-5.4% Yield last year and into 2024. I'm looking at 2024 and wondering if I should make a move on a short-term/mid-term/long-term rental.

I look at the GREATER Atlanta area, Decatur, Lake Claier, etc, and prices are just crazy. I'm looking for a short-term rental (to generate active losses), but maybe I'm thinking about this wrong... 

 When will be an excellent time to jump in?  What are you thinking?

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Josh Harris
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Josh Harris
Replied Jan 5 2024, 07:19

Thanks so much for your input and responding Abel! I'm still on the sidelines and working with a realtor but haven't pulled the trigger quite yet. While I'm still new to the real estate, part of me is thinking the Fed may begin to slowly lower rates in the next few months. That having been said, I think when he does, home prices will continue to elevate. I too though they would come down but it seems because of the low supply of homes that may not happen (at-least any substantial correction). With that in mind, I'm looking to buy within the next 2 months before that first rate cut which I think may cause asset prices to rise a little. I am actually looking in Decatur as I'm seeing some single family homes in the 200k range, even some fixed uppers slightly below. I'm still even thinking of doing the condo route that allows rentals even with an hoa. Still having some analysis paralysis to be honest and continuing to research. Thanks again for chiming in and feel free to stay in touch!

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Kevin Polite
Pro Member
  • Investor
  • Decatur Atlanta, GA
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Kevin Polite
Pro Member
  • Investor
  • Decatur Atlanta, GA
Replied Jan 6 2024, 05:25
Quote from @Josh Harris:

Thanks so much for your input and responding Abel! I'm still on the sidelines and working with a realtor but haven't pulled the trigger quite yet. While I'm still new to the real estate, part of me is thinking the Fed may begin to slowly lower rates in the next few months. That having been said, I think when he does, home prices will continue to elevate. I too though they would come down but it seems because of the low supply of homes that may not happen (at-least any substantial correction). With that in mind, I'm looking to buy within the next 2 months before that first rate cut which I think may cause asset prices to rise a little. I am actually looking in Decatur as I'm seeing some single family homes in the 200k range, even some fixed uppers slightly below. I'm still even thinking of doing the condo route that allows rentals even with an hoa. Still having some analysis paralysis to be honest and continuing to research. Thanks again for chiming in and feel free to stay in touch!


 What areas of Decatur are you looking?  Keep in mind a lot of hedge funds have purchased in certain areas of Decatur and they have become saturated with rentals. Plus they tend not to take care of their homes so they are not appreciating as much. 

HausZwei Homes Logo

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Josh Harris
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Josh Harris
Replied Jan 6 2024, 08:06

Thanks for chiming in Kevin! I also appreciate the heads up and perhaps should be more cautious. I currently see some properties around the Belvedere Park area that look interesting. I'm also just genetically looking in all of Decatur but understand there are some rough patches.

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Replied Jan 6 2024, 13:17

Here are a few resources you may find helpful. I was just doing some research on Atlanta

https://tomo.com/blog/7-best-neighborhoods-in-atlanta/

Invest Atlanta also has funds available for several different types of buyers and developers. Even if its not applicable to how you are looking to invest, areas where the government is putting a bunch of money could be good bets.

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Nicole Turner
  • Real Estate Agent
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Nicole Turner
  • Real Estate Agent
Replied Jan 9 2024, 12:46

Hi Josh! I'm an agent in metro Atlanta and work exclusively with investors. While your budget may limit options within the city, exploring areas like Decatur, Marietta, or Smyrna could be worthwhile. These areas often provide a good balance of affordability and rental demand. Not sure what kind of rehab you are comfortable with, but I have seen deals in these areas under 200k. Feel free to reach out if you need further assistance or have any specific questions - would be happy to help!

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Replied Jan 25 2024, 21:49
Quote from @Josh Harris:

Thanks so much for your input and responding Abel! I'm still on the sidelines and working with a realtor but haven't pulled the trigger quite yet. While I'm still new to the real estate, part of me is thinking the Fed may begin to slowly lower rates in the next few months. That having been said, I think when he does, home prices will continue to elevate. I too though they would come down but it seems because of the low supply of homes that may not happen (at-least any substantial correction). With that in mind, I'm looking to buy within the next 2 months before that first rate cut which I think may cause asset prices to rise a little. I am actually looking in Decatur as I'm seeing some single family homes in the 200k range, even some fixed uppers slightly below. I'm still even thinking of doing the condo route that allows rentals even with an hoa. Still having some analysis paralysis to be honest and continuing to research. Thanks again for chiming in and feel free to stay in touch!

 So you're the person I’m competing with to buy my first house huh? 

I agree with Kevin’s analysis. It looks like a couple of corporate investors are dumping the worst performing rentals in the low 200ks, they need work. Most of them haven’t been maintained properly (think worst case scenario like bottles in vents, grease in plumbing, uneven floors , crawl space issues). Some are starting to show signs of movement/ foundation sinking.  Because of the rain, GA is one of the states set to see the most ecological impact, erosion will be a bigger issue in a few years. 

Have you considered the west side of Atlanta? It's being revitalized. I checked out a few that could be decent to BRRR, but would need money than I want to spend starting out.

If you need any help looking, I am familiar with the area (due to my own interest in investing in Decatur). Sending a request so I can follow and learn from your journey. 

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Replied May 8 2024, 11:29
Quote from @Tiffany Vogel:

Hi Josh! 

My husband and I are full time investors in Newnan and Lagrange and have made great returns. If you're interested in deals down this way I can connect you with a great agent, attorney, etc to help you get started


 Hi Tiffany,

I'm new to RE investing and very interested in the Newnan and Lagrange areas. Would love to get any advice from you and hear about what your returns look like? Thanks!

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Tiffany Vogel
  • Rental Property Investor
  • Newnan, GA
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Tiffany Vogel
  • Rental Property Investor
  • Newnan, GA
Replied May 9 2024, 03:16

Hey @Demitri Blanco! We haven't been actively buying in the last couple of years but attend a local meetup that meets on the second Thursday of the month (tonight) at the Fayetteville iHop.  We are also about to launch a meetup in Newnan.  Feel free to send me a DM for more info

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Replied May 19 2024, 09:50

Hey I'm currently looking into the surrounding areas of Atlanta mostly west of ATL, but I'm not sure what percent investors are buying at these day. I know about the 70% rule but that's not always accurate in certain areas. Can anyone help with the math formula on finding what percent investors are buy at in any giving state or area?