All Forum Posts by: Azeez K.

Hi @Ryan Duffy

Firstly, welcome to BiggerPockets and taking the first step in starting your REI it is certainly rewarding in many aspects.

I honestly, won't do justice to all your questions as there is so much to uncover. I will try to summarize answers at a high level. 

A1- STR(s) are certainly worthwhile when done correctly. Very general answer because like anything it depends on several factors (kind of property, your buy price, boots on the ground, location etc) so its hard to answer without having specifics. You don't know what you don't know so at this stage I would be open to all different strategies the more you know about different strategies the better decisions you can make. People make money in all areas of real estate and until you try something you wouldn't know what works what doesn't.

A2- Not really again it depends on your individual tax structure , your AGI might be higher so you may not benefit a whole lot again it depends on the type of property you buy. If its beachfront 30A type property is different than buying a condo in Daytona in terms of mortgage interest again in most cases higher priced properties don't make sense given current interest rates (~7% ish)

A3 - Possible but may not be worth your time. Based on what you mentioned you gotta think about TVM (time value of money) if you are renting it at $300/ night or $1500/night. 

It sounds like you are more looking to do a lifestyle investment so that your family can enjoy the benefits of the same. One thing I see is people underestimate the amount of time it takes to run an STR and the expense ratio is higher in STR generally.

Feel free to connect with me and I can certainly share insights around your additional questions. I have an STR here in Atlanta and we charge anywhere between 700-1200/night depending on the weekend and stay pretty booked 3 days a week and sometimes during the weeks as well so far it has worked out well but I wouldn't go out of my way to start another STR as there are easier ways to make money in RE as well.

Hi @Sharon R.

Firstly, I am sorry that you are going through this annoying situation. I have experience with several MF properties here in Atlanta (Fulton) included and never heard of this inspection you state. Unless the property is subject to LURA (Land Use Restrictive Agreement) or your tenant is using AHA (Atlanta Housing Authority) or Section 8 voucher. 

If its LURA property then you have to unfortunately comply with inspections as stated in the LURA agreement. You need to read the fine print if there are any restrictive covenants etc. If it's section 8 then they typically do an inspection at the start and there is a video here https://www.atlantahousing.org... that explains this process. I feel your pain trust me as there is a lot of unnecessary bureaucratic red tape in the city so much so that I no longer feel like dealing with Fulton/Dekalb counties because of the harassment mentality and poor management of resources.  

Firstly I would do is to figure out the exact ordinance in question. You can find list of Fulton county ordinances here https://library.municode.com/g... under section 14 

Once you are able to find the ordinance then read through the same thing cuz it may clear some doubt or cause additional ambiguity 

I would then contact an attorney to draft an email to the city if you feel that you are being charged unreasonably. I did this step for the Atlanta Watershed as they were trying to force us as the owners in paying tenant's water bill. Let me tell you once the attorney sent an email and said this is against the law I never heard anything back.  Hope this provides some direction and wish you best of luck dealing with the city (you will need it). Good luck keep me posted as I am curious to see what the end resolution ends up. 

Hi @Matthew Stallings

Feel free to reach out and I can provide you some pointers. Since your question is very broad and generic it would be best to understand additional details on your objectives. I have a few new constructions going on at the moment. Good luck

Hi @Niraj S.

I would avoid buying a townhome as an investment property unless:

1. Deal cash flows from day 0

2. There is significant equity upside by buying one i.e. its undermarket and appraisal is higher than what you are paying for

3. You own controlling interest in the HOA

As someone who has developed townhomes, owned townhomes as controlling entity and sold townhomes it is not wise as an initial investment. Basically, you are buying an air-lot and your investment is controlled by decisions of the HOA. Additionally, you should not rely on appreciation while making your decision. It should cashflow day 1 and appreciation is simply icing if it were to happen. Feel free to reach out if you have any specific questions as am I happy to point you in the right direction.

Hope this helps

Hi Mil

I am a local fellow REI investor/broker in Atlanta. I can certainly recommend lenders but it depends on what kind of lending you are looking at SFRs/MF/ Industrial / Retail etc based on your needs I can recommend some names based on ppl I have worked w personally.

Good luck

Hi Casby

Welcome to BP. I am a fellow investor here in Atlanta. Feel free to reach out if you want to shadow. 

Good luck and much success

Hi @Kabir Wolly

I have built an ADU in metro Atlanta and can certainly speak from experience. When you say you have the full architectural plans do you mean you have the building permit ready to go or just got the architectural plans? Simply having architectural plans don't mean much you have to go through the city planning department and get the necessary permits ready. If you haven't done that you would need to do this even before getting a contractor.

You may not get a response from contractors that's they way unfortunately unless you know someone. To provide bids etc takes lot of time and effort so unless you have everything ready to go you may not get a response. Below are the pictures of the ADU. Feel free to reach out to me as I can provide some pointers that will save you a lot of money and trouble in the long run. Best of Luck

Hi @Gina Davis

Welcome to BP Family. I am based in Atlanta and invest in MF here in Atlanta. Feel free to add me to your network. 

Good luck and much success

Hi @John Haveman      

Thanks for your response. The reason I asked the above questions was to get some further clarity on your situation. Typically, HELOC is very difficult on investment properties that are held under an entity. You can try with PenFed or with PNC banks but its going to be challenging for sure. I have used PenFed to get HELOC on an investment property held under an entity so I can certainly speak from experience that they allowed HELOC on investment property again my situation was different as I was a domestic (owner) and did not have a foreign entity.

Some local banks who may provide a HELOC will do on a lot lower valuation in order to avoid any exposure. Typically, banks won't take a second position on a lien unless there is some significant equity. Another hurdle you may run into is that the banks would look at the ownership structure i.e. if it is 100% by a foreign shareholder it makes things even more difficult so they tend to look for domestic owners/partners with 81% ownership (this however, can be changed based on your operating agreement)- not a legal advice just purely from a discussion stand point.

I can provide some contacts you can connect within the Atlanta market who may be able to provide additional guidance. However, it is challenging but not impossible. If the HELOC doesn't work you can also raise private money to close the deal based on debt or equity structure. I.e. pay someone X% straight debt or give equity in the deal in exchange for the $. However, at these price points its hard for numbers to work unless the ARV is significantly higher,

Hope the above helps 

Hi John, 

Couple questions

1. Your current loan is that under an LLC? or did you buy in someone's name and the Quit Claim Deed to an LLC?

2. Does this LLC have a domestic partner?

3. What is the foreign shareholder equity share in the LLC?

4. What is your current interest rate on Property 1?

Typically, Banks are hesitant to provide a HELOC on an investment property for various reasons unless the property is (unencumbered) i.e. paid off. However, PenFed is one bank that provides HELOC under an LLC but your cost of finance will be higher given the current market situation. Their processing times are ridiculous a few months (super slow). You can certainly get HELOCs done but a lot of it depends on your existing relationships with Banks.

If your property is at a higher interest rate and if the numbers work you could cash out refinance into a portfolio loan and buy both properties. However, the minimum Debt service coverage ratio would be around 1.25 (higher the better)

Hope this provides some guidance. However, once you answer the above questions then it will provide a better understanding and can brainstorm creative ideas.