For New Real Estate Investors In Atlanta
Hi All,
My name is Jade Bridges and I work with an investment brokerage firm here in Atlanta. We specialize in helping investors find profitable deals to fix and flip or buy and hold. We do a couple of flips throughout the year, then flip the contract on deals where our funds are tied up or it doesn't meet our specific buying criteria. I thought it'd be helpful to the new investors out there to see some answers to questions I get asked often.
- What do I need to do before I put a property under contract?
You’ll want to secure enough capital before you even begin searching for your first real estate investment property. Most of our clients arrange for at least $35,000 to secure and ensure a smooth closing. Being pre-approved with a hard money lender makes your offer way stronger than not being pre-approved. Also, developing a solid relationship with a couple of general contractors will help you feel more comfortable with rehab bids. (ALWAYS vet them and compare prices with other investors or knowledgable people)
- How should I approach evaluating a property?
When you engage in evaluating an investment property, you should keep in mind your unique goals, ability to manage risk, and the amount of money and time you are willing to invest to achieve your stated goals. Then, consider these next six steps:
1) Determine your exit strategy (buy/fix/sell, buy/fix/rent, or creative financing).
2) Determine the ARV based on comparable properties.
3) Determine the rehab costs to bring the property up to desired ARV or rent-ready status.
4) Determine the expected days on market based on comparable properties and market conditions.
5) Consider potential risks that may limit your upside (i.e. proximity to commercial, nonconforming property, located in flood plain, etc.).
6) Determine your expected net profit and return. If it's in line with what you're looking for, buy. If not, move on to the next deal.
- What do I do about needed repairs?
Getting repairs done right the first time and at the right price can mean the difference between making significant returns or, perhaps, none at all. That’s why successful real estate investment professionals have a team in place consisting of a general contractor, backup general contractor, designer, and a handful of subcontractors.
Finding a GC you can trust and effectively manage is key to your success in real estate investing. Once found, they can be a great resource to you—accompanying you to properties, providing repair estimates, and informing you of potential issues that may surface once construction begins. It is a wise practice to ask GCs for a list of recent references and to confirm they have the proper insurance/license needed for the job.
Getting multiple bids and creating a detailed budget and scope of work are great practices to implement. Often, investors will go way over budget because they didn’t take the time initially to create a thorough budget to strictly follow. Having a GC or experienced mentor to assist you in this is key to your success at achieving your expected return. Poor management of contractors is one of the most common reasons investors fail to make a profit.
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I hope this helps any new investors looking to take the next step in RE investing! Feel free to reach out to me with any questions or if you are ready to take the next step we can discuss how to get you into an investment property. We buy/sell around 5-8 properties a month using our direct mail campaigns, the MLS, and other agent/wholesaler connections. Have a great 2019!
Jade Bridges