All Forum Posts by: Anna Watkins

I've had a couple of friendly smooth closings as a buyer with Rahall & Associates, offices at Lenox Pointe (office townhouse complex at the corner of Buford Hwy & Lenox Road).  When I said "I'm done" (got all the rentals I can handle), they said, "We'll get you into flipping soon!"  And they might :-)      http://www.betterclosings.com

Nice work on organizing and trying to capture this info.   IMHO, you're seriously off in your classifications of the Decatur-ish areas.  Perhaps it's hard since there are pockets of better and worse within the neighborhoods, but there is no way Winnona Park & Oakhurst (in the City of Decatur) are C+ -- City Schools, Agnes Scott College, expensive houses (new builds in the $750-$999k range), high rents.  Most of Midway Woods is also in the City of Decatur.  The areas just outside Decatur city are more mixed (and since this is my neighborhood and my comfort level, I have a hard time figuring out how other people classify) but Kirkwood, East Lake, etc are all pretty good bets if you can afford to buy.

Ditto what @Jeff B. said about financing -- I only have one mortgage where being a bank customer matters, and that's a commercial portfolio loan at the local bank in TN.  Especially for your first few loans, you'll probably get better rates and terms from a regular residential loan, and those are usually resold within minutes of closing, if not before!  Last year I had one where the notice of resale was actually included in the closing documents.

Yo Nick, me again!!  Credit unions have differing levels of sophistication with their banking services -- I've used one for 20 years and they still don't have online deposits or peer-to-peer transactions outside the CU.  For my rentals, I opened a business account with Chase (thanks, Brandon Turner ;-) because of the number of branches, but mostly because of Chase QuickPay.  My tenants now all pay rent with the QuickPay app and I love it, but if they had to pay by check or cash, there are a million Chase branches around town -- no mailing or picking up.  Due is due, weekends, holidays, whenever.  

Many credit unions and banks use a similar service called PopMoney.

In TN I have one tenant that doesn't do online banking, so they deposit a check or cash in my local bank there.  The lease does give them until the first business day after the 1st (if rent day falls on a weekend or holiday) -- I figure it's not fair to require them to pay on Thursday if payday is Friday but the bank is closed that day.  Not sure how that would work in Atlanta, but it's a thought.

Hey @Nick Brubaker -- I know you don't want to hear it again, but it still just depends on your goals.  Rental income won't count towards getting financing until you've got a year (maybe 2?) of experience -- so put in what the house needs to be safe, comfortable and clean, get the best tenant you can, and start building your landlording resume.  You'll tie up your cash for a year or so, but the chances of losing money are slim.  After a year, you'll have more options, and you can still flip then it if you want.

If you want to try a flip now, you stand a greater chance of just breaking even or losing money.  To make it attractive to a buyer you'll have to put in a lot more money, with no guarantee of profit.  But you'd get flip experience.  I don't think you're getting a good enough price on the house to make much money flipping to an investor -- houses all over Belvedere/GlenCo are going for $50K as rentals.  Lots aren't worth much in the neighborhood, or you'd see folks scraping for new build like they are in Decatur.

If you just want to get it over with, you could sell or even assign it to an investor/landlord asap (like a wholesaler), make a few thousand quickly, and start over.

Hmm, looks like I missed your response that said pretty much what I said.    I'll continue with emphasis on the part about starting off with true "Private Money" - friends, relatives, neighbors, your dentist, folks you know who aren't necessarily in it for the profits (but who wouldn't mind . . .),  and starting with one property.  You need experience managing one rental before jumping into debt with multiples. 

Also, I'd include a clause about dividends not starting until after a certain maintenance level of funding has been hit (don't pay out all the surplus -- you never know when a plumber or tree guy has to be called in).

This is a variation of Think Globally, Act Locally.   I'm saying Dream Big, Start Manageable.  I have a feeling if any 19-year-old guy can do this, you're the guy.

Hey @Nicholas Musey -- as a Decatur local, I see your plan and it's interesting. What another poster said is, I think, great advice. If you want to run an REIT, you're going to need to have experience with rentals. Nothing stopping you from that now -- you're over 18! So you need money, but not random investors' money just yet.

"Real life experience" would be something you could do right now -- how about you and 2-4 school buddies (or you and your brother) work like fiends (or, depending on who you/they are, get the 'rents to chip in) to raise $$ for the fund, which will be enough for the downpayment on a house that you yourself manage as a rental to other students (or y'all live in it and you manage).  You become your own first investor partners.  You know that the Emory area is expensive, so you'll need a good chunk just to get started -- or start an "enclave" in cheaper areas 15-20 minutes away, where you could get 2-3 houses close-ish together.  

Set a market rate for the rental, and rents pay into the LP account from which the mortgage and expenses are paid, you set aside x% every month to accrue for future expenses, and after a certain period, pay each investor back something from the "surplus." Or some other way of accounting, just brainstorming here. The LP and the LLC both develop track records for future investments, but you are the guinea pigs for the first phase.

You know, done right, you could run it as an experiment and write it up for your business degree thesis! 

(IMHO, you should complete your degree, as it gives you credibility with other people's money.  If not Emory, then GSU or similar if that fits into your finances and life schedule better)

@Craig H.  -- oops, you are correct.  No wonder the deals are good.  I have absolutely NO experience in driving to Panama City, Panama (and it's not even on my bucket list).  

Panama City is totally within 6 hours of Atlanta!  I used to go to PCB for dive weekends and could make it in 5 from Decatur, easy.  Great for diving and families with little children, no surf.  I'd rent it out 100% of the time and use the $$ to go to the Atlantic where there are actual waves ;-)

Yes, you can appeal/contest an appraisal, but I'm told it could be lengthy.  The appraisers are extremely conservative these days, since they really got reputations burned in the days when their estimates backed up out of whack or fraudulent mortgages.  I had a recent appraisal for a refi that was really disappointing, but I've been looking and looking and honestly, in my area the sales comps (and there aren't many) don't support higher.

The market rent is a middling value of all the rents in the area -- if yours is on the high side of the range, they don't know why -- is it way better than other units, was it grandfathered in before a rent drop, are you renting to a group that's willing to pay higher because individually they each pay much less???  So they go with a comfortable average-ish number.