First Time Investment Property Buyer- Where Would You Buy?

Question

My business partner and I are brand new to real estate investing but not new to housing. We have both been in the residential construction industry for the last 10 years and I worked in maintenance at apartments for 3 years in college. We have started an LLC and been given the green light from the bank on financing (as long as the numbers work of course). We are ready to start investing in real estate and are prepared to scale as quickly as it makes sense to. That being said, we want to start small until we get our feet wet.

Given that information, where would you start? We both live north of Atlanta (Jefferson/Commerce). We like the idea of being close to our investments so we can put our hands on them easier, but real estate in the Atlanta/Metro area is not cheap. I have PM connections in Statesboro, so we are considering student housing down there or possibly Athens. We are open to flipping or holding rentals, whichever makes the most sense case by case. I have read about several people starting their investment portfolio out of state ,or at least far from where they live. Would you recommend staying close and paying a bit more per investment or looking further out to find the cheaper deals? Thanks in advance!

Nadeem Alamgir · Answer

@Jordan A. At scale, it will be hard to manage time and  multiple units even at close distance. This is when you have to rely on your team (in this case, a property manager) to be able to do their job. If you are looking for flips and rentals, I recommend you research Cleveland, OH.

Jordan A. · Answer

That is definitely an interesting model. I'm sure we will be open to trying models like that and arbitrage down the road. They seem to be a better bang for your buck, assuming you can keep them rented. I have read that the 65/70% rule is kind of hard to meet these days. I am hopeful we can use our experience to save us some time and money through the rehab process. Our biggest hurdle right now is finding the right deal without having analysis paralysis!

Jordan A. · Answer

Looks like Ohio is the place to be! To your point, they are about to develop a massive battery plant between Statesboro and Savannah so that was another draw to that area. Just a little uncomfortable investing in something I can’t get to in an hour or so.

Samuel Diouf · Answer

Hey Jordan, I think you can invest from anywhere if you have the right knowledge and team established. When investing OOS you need to look into building a core 4 in selected market. It should consist of a realtor, property manager, contractor, and a lender. Have you looked into investing in the mid-west? The market is still priced well for low budget entry. I personally invest in Columbus, OH and think there is great opportunity here. Multiple, billion dollar companies are investing substantial amounts of money into our area, such as Intel, Google, and Amazon. Which in turn will bring plenty of other investors and general business to the market.

Josh Bowser · Answer

Hey Jordan - if you're looking for some levered longer term holds, our clients are having success with the Padsplit model in the Atlanta metro which is commanding 2x-3x gross rents what a standard long term rental would bring in. Rent by the room strategy is the only thing I am seeing cashflow right now where tenants are also easy to come by.

If you're willing to put 40%+ down, current market conditions are providing an opportunity to buy some high quality turn-key rentals across the metro as well (Mainly seeing this in Cobb County).

Sounds like you guys can potentially bring your flipping in house which could reduce your costs and make your offers more competitive. Flow of 'good' flipping deals is pretty low on market and highly competitive. If you're looking for flips - I'd start building a network of wholesalers no matter what market you decide to go in.

Lateefah Mathews · Answer

@Jordan A. Absolutely, Statesboro is not a bad place to start! I say, get solid with your strategy (Buy/Hold or Fix/Flip) then focus on the cities that align with that strategy and budget.

Jordan A. · Answer

Thank you for the reply Lateefah. I definitely have a soft spot for Statesboro (went to college there) and the property is much cheaper so we may be leaning that way.

Lateefah Mathews · Answer

@Jordan A. The opportunities you seek are right in your backyard. Yes, it's okay to invest anywhere as long as you have a strong team, specifically your core 4. However, if you're looking for a strong market with lower numbers, you do not have to leave the state of Georgia to find them.

Areas such as Athens, Augusta, Statesboro, as well as Macon, to name a few, provide great opportunities for flipping and even higher potential for buy-and-hold strategies since all four are college towns. Additionally, there are small pockets and areas in Gwinnett that offer some flexibility for novice investors to enter the fix-and-flip game at lower prices with good profit potential.

If you're interested in exploring these options further or need assistance in evaluating potential deals, feel free to DM me. Wishing you the best of luck!

First Time Investment Property Buyer- Where Would You Buy?

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