Duplex - Future House Hack in Atlanta, GA
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Atlanta.
Purchase price: $576,000
Cash invested: $144,000
Future House hack in the middle of Atlanta, GA. Top public schools, stable area that holds its value. Walkable to shops, restaurants and grocery store. Zoned as a 4-plex for future value add. We've been looking for a property like this for around 36 months.
What made you interested in investing in this type of deal?
This is a future play for my family. The cash flow is low for an investment property as-is. Taxes are extremely high in Fulton County, GA unless we owner occupy and receive the homestead exemption as our primary residence. We plan to owner occupy this rental within two years - effectively reducing the property taxes by $5,000 per year.
How did you find this deal and how did you negotiate it?
MLS. Contacted the listing agent and asked them to be a dual agent. They declined to run the deal themselves but had another agent within their brokerage represent us. We were able to get some inside knowledge on the property from the other agent and make the most competitive offer in a multiple offer situation. This was an estate sale with a motivated seller.
How did you finance this deal?
Traditional 30 year residential loan in personal name since we plan to owner occupy down the road
How did you add value to the deal?
Our options are: live in the 3 br/2 ba "Owner's" unit (2000 SF) for around $800 per month, live in the 2 br/2 ba "renter's" unit (1100 SF) for free, OR add a third unit in the basement, or separate garage, and live in the "Owner's" unit for free.
What was the outcome?
Until we owner occupy, we will break even on the property and will be happy with that until we occupy it. Market rent for both units combined is around $4200. This is our "dream" home and we are willing to break even for a few years on it.
Lessons learned? Challenges?
Property taxes in Fulton county, GA made this deal a little sour. I didn't do my full due diligence until right before we closed to find out the taxes would be as high as they are as an investment property. We initially planned to cash flow at least 5-7% per month. Taxes pulled it down to more like 1%.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Ehome Loan Advisors - mortgage broker. They find you the best interest rates you can qualify for. We got a 3.6% investment residential loan locked in for 30 years. They also referred us to the most competitively priced insurance we've found for good coverage in the area that includes loss of rents.