Would you live in the market before you buy?

Question

Hey all.

I have my eyes set on Atlanta (and eventually a few other areas in GA) to invest in. This will be my first property and I plan on house-hacking (hopefully a multifamily) and applying the MTR strategy. I am currently based in Boston but can move to Atlanta and keep my job from October onwards. The other option, however, is that I can live more or less for free for the rest of the year between a few family members and friends and save that bit of extra cash towards the purchase.

The extra cash could either help me jump on a deal sooner or it could be a buffer/money for potential renovation when I move in. However, the time I could spend in Atlanta before buying might help me avoid headaches by getting to know the market even better than my research.

I currently do not have an investor-friendly agent there, but I do have a real-estate contact here in Boston who lived there for 20 years.

I am interested to hear your thoughts and what you'd do, if you were in my shoes.

Henrik Arnroed · Answer

You make some good points.

Then it seems to me that flying in before making a purchase (for example when you find a property which seems to be a deal) would be enough to scout out the neighbourhood and get a feel for the property - outside of what lives on paper and pictures. This is something I was always going to do - especially for my first deal - to be comfortable with spending the majority of my savings on this.

By the way, I can understand why people flee to Portugal - lovely place. ;)

Scott Mac · Answer

Where will you pay the least taxes.

Where does buying a house for yourself cost less.

You have free (temp) housing available if you move. Do you have that free housing available in Boston also or are you paying.

If it were me, I would move. Spent a few weeks getting settled in to the neighborhood you are living in, (Getting your driver's license and car registered with the DMV) knowing where the grocery store is, et cetera.

I would get a paper map of the city, go and visit with a several different brokers (in different areas) and bring that map- then ask them where the neighborhoods are that are Class A class B class C class D and where the war zones are.

I understand that Atlanta comprises different counties, so your research at first with the paper map will give you an overview of the area.

Because the area is so large, being therelets you drive those areas at different times of the day to learn the neighborhood even better.

It will also let you get to know the types of customer/ renter who would be interested in apartments/ houses in a particular neighborhood.

If you think the culture in Atlanta GA in a class C or D neighborhood is the same as your culture in Boston in a Class B or A neighborhood you will find most likely that they do not match up.

Being there will let you get to know your customer in a particular area you are interested in wants.

For instance if I am looking in a Class D neighborhood in Los Angeles- which I am not- I know from personal experience that customer base values certain things in a rental.

Comparing that to something in a class C area in San Antonio Texas- that customer base values different things in an rental.

If you know what your customer base wants and is willing to pay for, if you Offer that in a rental the demand for your unit will be higher.

Because Atlanta is so big , to me, moving to the area seems like it would produce the information that you need on the neighborhoods within the various counties as well as letting you get to know what the local neighborhood people value for a rental.

Good Luck!

Jonathan Greene · Answer

This quote - I can't really see what I can learn by visiting the market that I can't learn from an agent" - will literally bankrupt you. I am an agent, but I am an expert who has been in real estate investing for more than 30 years. 99 percent of real estate agents don't know anything about investing and definitely do not care about you. You need to reframe what you are doing. As I said originally, you are doing what looks good on paper, nothing else.

Nathan Gesner · Answer

I agree with the others that you don't need to live in a city before investing, but I definitely recommend spending a week or more there to really learn about it. Depending on the market, I recommend spending some time there during different times of the year. For example, my market is amazing in the spring, summer, and usually the fall, but a lot of people hate it in the winter.

Alecia Loveless · Answer

@Henrik Arnroed I invest locally so not the best person to ask. I’d find an investor focused realtor. Unless you know the area one week won’t help you as you won’t have any idea where to begin.

Jonathan Greene · Answer

You certainly don't have to live there first, but what you are doing now is not helping you. You are building a plan on paper and paper can burn or blow away. Why Atlanta? Why do you think you can learn to house hack and do midterm rentals right away there? That, in and of itself, is a great idea to live in one side and MTR the other, but you are making your first property more difficult to manage (but easier if you are on site).

You don't have to live there, but why wouldn't you want to investigate the market more clearly before making a decision on it. What looks good on Zillow does not always look good in real life or just from a weekend trip.

Michael Dumler · Answer

@Henrik Arnroed, take real estate investing out of the scenario for a moment and ask the more important question: Why do you want to move to Atlanta? Relatively cheaper? Warmer weather? Job opportunity? Have you visited the City before? What's motivating you to move here?

Above all, if you decide to remain in Boston for the next several months but decide on Atlanta as an investment market, you should ideally visit the respective markets several times before making a purchase. Since it sounds like your job is flexible and you can work remotely, explore the option of staying here for several weeks to perform your due diligence.

As an investor-focused real estate agent, I can assure you that there are areas in Atlanta that can vary block by block. Moreover, despite current market conditions, the small multifamily space is still experiencing decent activity from aggressive investors. As with all real estate investment scenarios, it depends on your situation, risk tolerance, and the tradeoffs involved.   I'm happy to connect! I'll shoot you a message.

Theresa Harris · Answer

It is a lot to ask of friends and family to couch surf for several months-a week or two, perhaps.  Not to mention if you are working, moving between places isn't ideal.

Do any of the family or friends live in Atlanta?  If so, talk to them about areas to avoid or areas to target.  Talk to your friend in Boston who lived in Atlanta (assuming they lived there relatively recently as cities change). As they are a realtor, ask them for recommendations of a good realtor down there.

Go for a trip there to look at places and get a feel for the neighbourhoods you think would work. Don't just go during the day, but visit the areas in the evenings.  In some areas, winter is a good time to buy as there are fewer sales, so you can get a better deal.

Henrik Arnroed · Answer

This is also why I am reaching out on this forum. To learn.

People in this thread are making a lot of good points about having seen the neighbourhood with your own eyes before making a purchase - something I had always intended to do regardless, especially for my first property. My consideration is whether or not I need to be present in the city while I am searching or if it is enough to fly in when something looks like a deal to be considered.

I am still curious, though, about what you would look for as I mentioned in the previous post. What would you recommend doing/looking for with some time in a completely new market?

Scott Mac · Answer

Where will you pay the least taxes.

Where does buying a house for yourself cost less.

You have free (temp) housing available if you move. Do you have that free housing available in Boston also or are you paying.

If it were me, I would move. Spend a few weeks getting settled in to the neighborhood you are living in, (Getting your driver's license and car registered with the DMV) knowing where the grocery store is, et cetera.

I would get a paper map of the city, go and visit with a several different brokers (in different areas) and bring that map- then ask them where the neighborhoods are that are Class A class B class C class D and where the war zones are.

I understand that Atlanta comprises different counties, so your research at first with the paper map will give you an overview of the area.

Because the area is so large, being therelets you drive those areas at different times of the day to learn the neighborhoods even better.