Any RE investors in the Atlanta area?

6 Replies | Atlanta, Georgia

Hi,

I'm a relative newbie (only have 2 SFH rentals) but looking to expand. Nothing close to cash flow positive seems to be available these days. What sources do people use? FMLS isn't the best place for deals. Thanks!

Hey @Eland Lord, welcome to the BP community!

To answer your question in the subject line, yes there are a ton of us here on BP in the Atlanta area. 

To answer your question in the post, itself, these days it's not about where you're looking but how you're looking. Unless you're going direct to seller and getting lucky by finding folks who live under a rock, you aren't going to have much luck finding cash flow in a decent area with good schools. This goes for any major market in the U.S. right now. 

The days of buying turnkey, on-market properties that cash flow day 1 are over (at least for now). If you want to find cash flow today, you'll need to get creative. Atlanta is a great market for this since we have a number of large homes and homes with mother-in-law suites = multiple streams of income on a SFR = better likelihood for cash flow. Atlanta has a major housing shortage, especially for lower income. Find a way to meet that need and you'll find solid returns, even in this wacky market.

Hope this helps a bit. Feel free to reach out anytime if you want to bounce ideas off each other!

@Eland Lord I actually never said anything about MFH;)

In fact, that space is so overrun here in ATL and there is so little supply, that I would actually recommend not focusing on it. Sure, keep an eye out because any MF you can snag for a good price in Atlanta is a no-brainer but just don't waste too much time in a space just as, if not more, competitive than the SFR space.

My point was to get creative with SFR investing so that it almost acts like a MF.

Originally posted by @Eland Lord:

Hi,

I'm a relative newbie (only have 2 SFH rentals) but looking to expand. Nothing close to cash flow positive seems to be available these days. What sources do people use? FMLS isn't the best place for deals. Thanks!

 You can always start a direct mailing campaign and reach out to sellers who may be motivated. Divorce, inherited properties etc....

@Eland Lord well that's the question isn't it. And it's actually answered by answering your second question.

SFH are traditionally more of an appreciation game because they are valued based on the market, rather than income. On the other hand, MF is traditionally valued based on income (small MF is the exception here and falls more on the market-based valuation side of things).

The strength of MF comes from economies of scale. The more units you have, the more expenses&vacancy/unit goes down. So, typically, MF is a cash flow play. More units allow for better cash flow (granted you still buy right). 

So, how do you get creative with SFR to create these multiple streams of income? Well, one way is to find a SFR that has a mother-in-law suite. You can rent out one side to one family and the other to another.

The second way is renting by the room. This way is more management intensive but if you can get enough folks (don't go too crazy here) under one roof, management costs/room go down and it starts to make a lot of sense (again, because economies of scale). 

These are essentially house hack techniques that can be used to actually hack a SFR to act more like MF. This allows you cash flow similar to a MF while also getting that sweet SFH appreciation.