Buying Real Estate in Georgia- Out of State
Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes
Buying Real Estate in Georgia- Out of State
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
15yOphelia,
I am honest and some like that and others want it sugar coated.
Unless you are dealing with a broker that agent will have to split that commission with the broker. On these size of properties you are talking a very small commission 30,000 times 3% equals 900 bucks.
Even if the seller pays a minimum commission of say 1,500 after expenses they might make 900.
What you are looking for is not the bad areas.What you want is nice areas where properties are going for similar prices as the nice areas.
These properties ARE out there.They go under contract in hours to days.If you can't jump on them right away you will lose out as there are local investors ready to pounce.
If you get a 700 rent on one of these properties for a manager you are talking 70 bucks a month fee.If there are not other properties in the area they could spend most of the in gas if there are problems with the property.
The only company it would be worth it to is if they had volume in that area and could hit many properties at once.
I get calls all the time for these types of deals and there is just not any money in it for me for the time invested.
Now if you told your broker/agent find me a deal and I will pay you a minimum of 4,000 to 5,000 when it closes then the game changes.
So it all depends on what a broker/agent will work for.There are much nicer areas then the ones you mentioned that have low crime.
The stuff you want in Atlanta are war zones and I would stay away.The property taxes are extremely high in those areas as well eating up almost all the cash flow.
If the tenant leaves and you have to re-rent with the high property taxes you are int he negative and banking on appreciation which those areas could take many years to turn around.
Hope it helps some.
10 Replies
Hey Ophelia,
Keep in mind that anywhere you invest (any major MSA, at least) will have areas where you can almost guarantee your stuff will get stolen. I used to live where you do (Silver Spring) and I'm sure there are plenty of parts of Prince George's County and D.C. that are no different than the parts of Atlanta you were evaluating.
And, of course, there are areas where this type of stuff doesn't happen, but where property values are (as you might expect) higher.
You'll find that some of the nicer parts of Atlanta are on-par with Montgomery County in terms of types of houses and values, and then there are some areas of Atlanta that are decent with lower values (just like you'll find near you -- for example, Gaithersburg, Frederick, etc).
In Atlanta, you might consider looking around Cobb County (west of the city) and Stone Mountain (east of the city), where you'll find a lot of decent, working-class neighborhoods, where prices will often top out around $150K (with plenty lower-priced properties, and REOs in the $30-50K range).
If you want to get a bit more upscale, look around Norcross, Sandy Springs, and Perimeter areas (north of city), or even East Cobb and/or Alpharetta (further north of city) where prices start to get into the $200K+ range (with REOs in the $100K+ range).
Then there are the high-end areas in the city, like Druid Hills and Buckhead, where prices will rival what you're seeing in your area ($500K+, up to several million), as will the quality of the neighborhoods.
This is the reason why investing out-of-state is difficult...without knowing the details of the MSA, it's very hard to make quick and qualified decisions. If you're going to invest in Atlanta (or anywhere that you're not familiar with), expect to do a lot of research and also expect to spend more than a couple days in the areas.
- Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes15y
Hi J Scott,
Thanks for chipping in, I appreciate the advice. I was actually looking around the stone mountain area on my visit and saw a few properties there. I will also start looking into Cobb County as well.
I do plan to make a couple more trips to identify sub divisions and other things like how to get tenants before I start to invest.
You are definately right there are some parts of PG county/DC that are similar to Georgia where you can pick up 30k houses and others where if you leave your car too long it might be gone by the time you turn around. There are also very decent parts to invest where you have very high end houses multi million dollar houses as well.
Have you looked into rental? I know you generally do flips-Ofcourse being out of state is harder to manage than being local as I had someone who I used to have view properties and take pictures but it was the hardest thing to get them to get and go when you needed them to get anything done.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes15y
Ophelia,
I am honest and some like that and others want it sugar coated.
Unless you are dealing with a broker that agent will have to split that commission with the broker. On these size of properties you are talking a very small commission 30,000 times 3% equals 900 bucks.
Even if the seller pays a minimum commission of say 1,500 after expenses they might make 900.
What you are looking for is not the bad areas.What you want is nice areas where properties are going for similar prices as the nice areas.
These properties ARE out there.They go under contract in hours to days.If you can't jump on them right away you will lose out as there are local investors ready to pounce.
If you get a 700 rent on one of these properties for a manager you are talking 70 bucks a month fee.If there are not other properties in the area they could spend most of the in gas if there are problems with the property.
The only company it would be worth it to is if they had volume in that area and could hit many properties at once.
I get calls all the time for these types of deals and there is just not any money in it for me for the time invested.
Now if you told your broker/agent find me a deal and I will pay you a minimum of 4,000 to 5,000 when it closes then the game changes.
So it all depends on what a broker/agent will work for.There are much nicer areas then the ones you mentioned that have low crime.
The stuff you want in Atlanta are war zones and I would stay away.The property taxes are extremely high in those areas as well eating up almost all the cash flow.
If the tenant leaves and you have to re-rent with the high property taxes you are int he negative and banking on appreciation which those areas could take many years to turn around.
Hope it helps some.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes15y
Put another way.I wouldn't touch those areas and I have lived in Georgia all my life.
Others love high risk but not me.
- Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes15y
Hi Joel,
Thanks for your input- I'm not looking to buy in a war zone or else I wouldn't have asked the question- What areas do you have success? In other words what areas can I leave appliances and not have it stolen or what areas can I drive safetly at night.
What areas do you suggest in Georgia that have low crime and good prices? Also please notice that I never used Atlanta as the area but georgia in general. Thanks - Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes15y
I personally like Cherokee county because I know it well. J Scott likes Cobb.
Cobb being closer to Atlanta has more bad areas that you have to watch out for.
The key is anything In the city of Atlanta is going to have super high tax assesments and some areas will be really bad.
If you go outside of the city limits the areas tend to be better for the most part and tax assesments are lower.You are looking for properties where the broker used a BPO to price the property and used the war zone areas fro comparables.
This makes the listing price low for a good area using comps from a marginal area.
There is 90% what I call JUNK out there.Meaning it has no value at it's current price at this time.
The really applies to any investment category.I am looking at buying some restaurants.Most are junk but a few have potential.You have to work long and hard to find the gems.
Buying one wrong can sink your whole plan.There are other areas of Georgia that are nice as well you just have to watch purchase price versus what rents you could obtain.
- Flipper/Rehabber · Orlando, FL · Member since 2008 · 263 posts · 147 votes15y
Atlanta is much like Chicago and any other MSA - you have to be very selective on where you buy.
We have experienced some of the theft (A/C units, Kitchen appliances, etc.), even having alarm systems in place - so your Realtor was being honest with you.
We have bought properties from McDonough in the south, Decatur, Stone Mountain, Grant Park, all the way up to Cumming in the north.
Each township has its strong neighbourhoods and you simply need to find a Realtor/Bird-dog that you can trust - we have used Alan and Ming Richardson from Solid Source Realty for some of our Atlanta deals and they were knowledgable of decent neighborhoods to look in, etc. you're welcome to call them to see what they have available.
Hope that helps,
TTFN,
Greg - Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes15y
Thanks for the referral Gregory, I'll definately give them a call to see if they have anything available.
- SFR Investor · atlanta, GA · Member since 2011 · 4 posts · 0 votes15y
Hi Ophelia My wife and I brought a home in Atlanta with the idea of moving there after we rented it. We have had problems with people stealing the power and we may be changing property managers soon. I will say that Atlanta has a lot of properties but knowing the area is key.
- Stone Mountain, GA · Member since 2010 · 267 posts · 72 votes15y
Hello--Depending on your short term and long term goals and how much cash you have to invest also what type career ( job) you have
I strongly recommend --for first one or two houses --Buy REO - HUD -or Fannie Mae- house in good neighborhood- at 40% or 50%
FMV --and do a Partnership with J Scott- he can do good fix up and manage for you --
work out honest details to benefit both -
Then move to Atlanta to buy more- bring silent partners or money from Maryland-from your contact persons - invetsorsI do not recommend - Stone Mountain, Decatur, Lithonia, Snelleville area- changed so much in last 10-15 years- I lived in Stone Mountain ( Dekalb County) for 15 years - Zip 30083 - lenders will not make loans-
I had one rental house in Stone Mountain for 15 years - sold in 2005 for $105,00 --last year -- in the same subdivision - fourth house from my house was sold for $39,000 by an agent - as short sale- still nice house for investment at $900 + rent- Sect 8 tenants many rentals in a subdivision
I like Gwinnett County better - Suwanee, Duluth for upscale or Lawrenceville for working class people- along I-85 and Hwy 316 , Sugarloaf area --many rentals and tenants-
Accidentaly saw yesterday --Foreclosure for $100,000 ---4Br , 2.5 bath - 2040 sq ft-- can rent for $1100 --near good schools- other houses - listed by Zillow at $143K to $182k --
good if can get for $75K or $80K --Any general area in Gwinnett, Cobb or North Fulton and some in Clayton county are good-
good delas every where -with over 13,000
foreclosures-
Listen to John Adams on AM 920 Atlanta radio
station -online - on Sunday 12:00 pm- 2:00pmFind a Good REO - HUD agent -to work with
Get a Line of Credit while you have good job and good credit - before quitting -Good Luck --Welcome to Georgia
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