EAV/Kirkland Deal - How lucrative?

Question

Hey ATL BP Community!

I have a deal about to be put under contract and I'm wondering if y'all think it's worth following through on. I'm particularly curious to hear everybody's thoughts because it's not in the immediate EAV neighborhood, but rather a half mile north of downtown EAV (in between Edgewood, Kirkwood and EAV).

It's a Duplex currently renting for $2,400 but likely to reach $2,600-$2,800 in the coming years when one of the long-term leases is up and I can rent it out closer to the market rate. I am an FHA buyer and it looks like I'll get it under contract for ~$360k.

I have a sense for what the near-term inflows and outflows will look like, but I'm wondering how this group feels about this area for long-term (5-10 yrs) appreciation? Any input is greatly appreciated :)

Stuart Hope · Answer

@Ryan Aurand EAV has shown strong growth in the past few years as well as a more steady flow of well-qualified tenants. That being said, certain pockets of that area don't perform as well as others due to a multitude of factors, and it's important to run comps in the surrounding area to ensure you'll get the desired rents you want. If the numbers make sense and you see the potential for increased growth after you purchase then you should feel good about putting the duplex under contract. Always happy to connect further, good luck with the closing.

Sam Mitchell · Answer

Well, without knowing anything else I think appreciation is a safe bet there. You're not likely to see anything really fast like if you're looking to flip it in a couple years, but I would bet on steady, slow, sustained appreciation in that area pretty much indefinitely.

Ryan Aurand · Answer

@Sam Mitchell one side 3/1 and other side 2/1. Built in the 1930's. No substation CapEx requirements needed at the moment.

@Matthew Nicklin Great point. This issue has been settled already with my lender as one of the tenants will be leaving before I close :) this almost killed the deal before...

Matthew Nicklin · Answer

Is one side vacant or is one of the tenants moving out around closing date? FHA is not going to allow you to buy it occupied. You have to reside in the property as your primary residence to purchase it with FHA financing.

Sam Mitchell · Answer

How big are the units? How many BRs? How old is it? Address would be helpful.

Ryan Aurand · Answer

@Nick Fitzpatrick

Ya there are a couple there.

Nick Fitzpatrick · Answer

Is this the one on Memorial that's been sitting?

EAV/Kirkland Deal - How lucrative?

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