Will we ever see another buyers market?

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Will we ever see another buyers market?

Vincent Crane

Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes

I haven't seen a single deal in the city of atlanta that cashflows, and I've looked at about 200.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Vincent Crane all properties cash flow when you pay cash..

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Aaron Mazzrillo
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
10y
Sounds like you need to keep looking. Or, you need to tighten up your criteria. I can't imagine every investor in the entire city is starving for deals. Maybe you're looking under the wrong rocks? Maybe you're not even looking under rocks? Hope you're not standing on top of the rock looking around.
5 Reply
Cal C.
Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
10y
patience grasshopper!
2 Reply
Moiez Karim
Atlanta, GA · Member since 2015 · 32 posts · 6 votes
10y
I'm seeing similar things
0 Reply
Vincent Crane
OP
Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
10y
Most people in Atlanta I've talked to aren't finding deals either. 4% cap rates on multi's, just absolute crap properties selling for full retail price that need $50 in rehab in a B area. It's unreal.
0 Reply
Alex Franks
Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
10y
Like Most cities the gold rush on properties is over. Once the hedge funds came into Atlanta like most markets the turn key rental properties dried up. Then again here in Charlotte we don't even look to rent as we are selling most for retail sales. Even in Rental markets getting retail sales. Keeping in Mind A and B type assets.
Todays Market you have to be very creative to find deals. Now looking at 200 and not seeing a single deal. First that is a lot of homes ,and maybe your criteria might be a little to harsh. Just my opinion I think we are going to see the lower end deals( subprime, and type d and c assets) making a come back for investors. Unfortunately this is normally just recycled product. C and D asset product is just a rougher product. As to many things can and will go wrong with the lower end asset. Not saying Not to buy them, just understand what your buying.
For me personally I made the jump to New construction, A, B product, and or commercial. So like your self my criteria will only allow for certain properties. The good things is I'm buying or building with a specific plan of attack.
0 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
10y
What you're seeing is a manifestation of the current housing shortage. Some 80% of builders / developers went under in the crash and are only now ramping back up. Foreclosures and other demand for housing has continued unabated during that same time. Economists estimate we are over 5 million housing units behind the demand.
That said, remember that a lack of discounts indicates a lack of seller motivation. Perhaps patience will pay off.
... and THAT said, there is also talk of an impending "double dip" - or maybe a "new" dip - in the economy and the housing market circa. mid-year, sometime during the Q2/Q3 time frame. Wall Street has been taking a beating lately.
David J Dachtera
"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."
- DJ Benedict
2 Reply
Mike Watkins
Wholesaler · Powder Springs, GA · Member since 2013 · 516 posts · 143 votes
10y
I'm not sure where you guys are looking but I'm finding deals all over. I even got a house for a $1. I don't buy unless it's at least a 10cap.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
10y
Originally posted by @Vincent Crane:

I haven't seen a single deal in the city of atlanta that cashflows, and I've looked at about 200.
Sounds like you need to try a different market.
1 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
10y
I think it really depends on where you're looking. Sure, everyone wants a cheap, new constructions, that gets maximum rents in the best school district.
If you don't find that, then you'll have to look at criteria and see where you're willing to give:
- Location
- Type of property A,B,C,D
- price
- Condition of house
- SFH or MF
Readjusting any of those will likely give you more to work with. For example, I'm right now willing to sell a duplex for 45K, with rents at 425/450 each side. But it's a C or D neighborhood, which I'm sure you don't want. So, you have to see which criteria you'd be willing to give a little
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Vincent Crane all properties cash flow when you pay cash..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
15 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
10y
I have recently bought (2) duplexes for 15K each, in the city of Atlanta. 1 needs about 15-20K, the other about 25K. Rents should be about $ 750 each side.
So, I do think there are deals in Atlanta . And I'm buying from California
1 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
10y
I don't buy overpriced trash.
Wait until they lose their shirt and then swoop in and buy them for a song. Some even when buying incorrectly will be able to handle the next down cycle and wait it out.
It's the buyers who overpaid and can't hang on where you scoop up deals. We call them "vulture buyers" in the business.
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5 Reply
Account Closed
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
10y
I believe you can make what looks like a non-cash flow property work if when making the offer you insist on your terms, terms that will satisfy your investment objective.
Pay little attention to what the seller wants and make your offers to satisfy your needs. There has got to be some deals in your area.
- Check the Daily Record or other business publications where foreclosures and tax sales are publicized.
- Attend Rent and Housing court every day
- Run ads in newspapers or Goggle Ad Words
- Talk to foreclosures attorneys
- Get on the mailing list of all auctioneers in the area
- Work a farm area, walk and talk
- Make offers everyday on expired listings
- Attend seller ordered auctions
- Visit the manager of every bank in your area
- Get the current list of Tax Sale offerings, visit as many owners as possible
- Offer agents a big bonuses for bring you listed and unlisted properties
- Talk to brokers and mangers of real estate offices
Just my thoughts.
6 Reply
Vincent Crane
OP
Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
10y
@Michaela G. If there's a duplex in Atlanta selling for $15k, I suspect it's in a war zone. Duplexes in decent locations, in decent condition in Atlanta are going for $250k. What part of the city did you buy it in?
@Jay Hinrichs Of course but I'm obviously talking about 75 LTV, conventional financing for your typical $100k SFR that you'd want to see $250/month cash flow from in a B or C location.
0 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
10y
@Vincent Crane , you're statement was that there was not a single cashflowing deal in the City of Atlanta and I showed you that there are.
Now it's up to you to reevaluate your criteria
1 Reply
Vincent Crane
OP
Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
10y
This should be more about the market as a whole. It was a great time to buy in 2012. It's not so much in many places today. Who thinks it's getting to look bubbly and there could be a downturn and lead to the next buyers market in 2 years, or 4 years, etc?
1 Reply
Account Closed
Investor · Atlanta, GA · Member since 2013 · 212 posts · 107 votes
10y
Similar to the stock market, there is no way to predict the answer to your question with sufficient confidence to make a market timing decision. And even if someone could make an actionable prediction, you would not be able to sift through the other, incorrect predictions and pick out the person with a crystal ball. It sounds like you are just looking for people to confirm your own view that the Atlanta market is over priced.
Sure, cap rates in the desirable in-town neighborhoods for MLS-listed properties trade for sub 5% cap rates. You get what you pay for. Those properties will rent quickly to quality tenants and typically sell quickly at close to market price. You give up potential return for convenience and liquidity. If you want an 8-12% cap in a reasonable school district, you're going to be in the suburbs.
If you want a guess about future prices in Atlanta, appreciation will flatten but a significant dip is unlikely. Interest rates will remain low (on a historical basis) for the next few years. Multi-family real estate is a popular asset right now. Everyone is waiting for a dip to buy more. The homeownership rate has significantly declined and that is unlikely to quickly reverse in the next few years. Fortune 500 companies continue to move to Atlanta and jobs are plentiful. Don't hold your breath for a bust.
4 Reply
Ed D.
Hackensack, NJ · Member since 2016 · 22 posts · 4 votes
10y
What goes up must come down. Yes there will be another housing crisis except it's not really a housing crisis it's a capital markets crisis. Housing is just a symptom. The real issues are with capital and banks are going back to the way they were prior to 2007. The lenders are starting to lend again and subprimes are coming back. I don't cover mortgage backed securities anymore but a couple of years ago we were selling mbs and cds in the investment bank like it was 2006 all over again. Also, there is some turmoil in the markets as I write this. The high yield corporate debt is a bit unstable and may cause some panic in the future. China is a concern right now. If markets crash and banks get hit, the little guys will not get mortgages nor have that extra cash to buy. So there will always be cycles of ups and downs. Now aside from this, I'm not sure about the Atlanta market but markets turn and there is never a run forever.
1 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
10y
Vincent you still buy but maybe just a few a year. When times are good maybe a few meet your criteria. When times are bad there are lots of deals to be had before the next cycle goes up again for that asset class.
People keep churning money it might just go from rehabbing houses to building brand new construction. You have to move with the markets.
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0 Reply
Sterling WhitePro Member
Rental Property Investor · Indianapolis, IN · Member since 2014 · 554 posts · 153 votes
10y
Originally posted by @Vincent Crane:

I haven't seen a single deal in the city of atlanta that cashflows, and I've looked at about 200.
Are you doing your own marketing to find off-market deals? Maybe a option to look into if you haven't already.
You are in a hot market, however so like others have stated patience is key
Podcast Guest on Show #308
0 Reply
David Nolan
Professional Property Investor · Brisbane, Queensland · Member since 2015 · 165 posts · 160 votes
10y
@Vincent Crane Where is Atlanta is regards to its property cycle? All markets are cyclical and when they are near the top the deals appear to be less profitable, when they are near the bottom they appear to have a lot of upside. It is imperative that you understand about your market's cycle.
Buying in any property market is akin to sailing a sail boat. Sometimes the winds are favourable and you set your sails, your strategy, accordingly. Sometimes the winds are against you, coming at you head on. Do you stop sailing? No. you set a different kind of sail and move forward accordingly. You keep moving with different plans, different strategies, different objectives, but you still keep moving forward. Sailors call it tacking. Simply change tack.
Understanding which way the winds are blowing is a basic and necessary skill for a sailor. Understanding market cycles is a basic and necessary skill for a professional property investor. If you don't have these skills yet then I suggest you would benefit from learning them. There are many posts on the subject of market cycles here on BP to get you started.
Alternatively, if you cannot find property that cash flows how about looking for other types of deals to make money. Each market provides different opportunities and therefore requires different strategies. It may be as simple as adopting a different strategy if you want to operate in this specific market.
Good luck on your journey and remember it is possible to sail into the wind.
0 Reply
Hersh M.
Engineer · Carlsbad/San Diego · Member since 2014 · 285 posts · 97 votes
10y
@Ed D.
Funny you say that. I recently saw The Big Short. What a movie. It ends by saying GS had already started selling CDS on MBS but with a new package name called 'bespoke tranche' something like that.
0 Reply
Sam Watson
Investor · Charlotte, NC · Member since 2015 · 15 posts · 2 votes
10y
I don't know anything about Atlanta, but it's probably pretty similar to Charlotte - a nice secondary market that experiences booms in the good times with job growth and lending via our big banks. If you're looking for A properties in a market like that, you're going to get a big pinch in caps since everyone and their Chinese brother-in-law are stepping into secondary markets reaching for yield these days. Globally, everyone's loaded up on cash and looking to take advantage of low rates, so trying to get a piece is gonna be hard.
In Charlotte, I've been building a list of small multi rentals with solid fundamentals right outside primary investment areas. Even at a small cap rate, I know that a property on the fringe of a lower quality submarket will eventually get taken over by the growth before it. This provides an excellent chance to command higher rents, especially if the property can use some rehab to become a higher quality product with new higher quality tenants willing to pay more. If you can find a way to get rents up, then you can justify the going-in cap rate. Look for major market trends and fundamental drivers of growth to make a prediction on where you might see an eventual shift in tenant quality.
1 Reply
Ann Howell
Investor · Houston, TX · Member since 2014 · 128 posts · 87 votes
10y
Originally posted by @Account Closed:
I believe you can make what looks like a non-cash flow property work if when making the offer you insist on your terms, terms that will satisfy your investment objective.
Pay little attention to what the seller wants and make your offers to satisfy your needs. There has got to be some deals in your area.

Check the Daily Record or other business publications where foreclosures and tax sales are publicized.
Attend Rent and Housing court every day
Run ads in newspapers or Goggle Ad Words
Talk to foreclosures attorneys
Get on the mailing list of all auctioneers in the area
Work a farm area, walk and talk
Make offers everyday on expired listings
Attend seller ordered auctions
Visit the manager of every bank in your area
Get the current list of Tax Sale offerings, visit as many owners as possible
Offer agents a big bonuses for bring you listed and unlisted properties
Talk to brokers and mangers of real estate offices
Just my thoughts.
You made some great and specific suggestions that I have not heard before.
0 Reply
Mike Watkins
Wholesaler · Powder Springs, GA · Member since 2013 · 516 posts · 143 votes
10y
I am so tired of the negativity in these posts.
1 Reply

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