Feedback Request from Recent Atlanta Investors

[Jonathan Small]

I live in Atlanta,  Georgia.  I have bought and sold more in the last 9 months than in my last 10 years of my investing.  I am looking to get feedback from those of us that have bought and sold in Atlanta in the last 9 months.

Below are some highlights from a recent CBRE Atlanta real estate report. Hopefully we can use the data and our experiences to find opportunities.

I am looking to get feedback from people that are making recent transactions.  If you are an active investor (actually bought or sold in last year 9 months) in the Atlanta area please share your experiences to the statics below:

Economy
• Atlanta’s diverse economy is expected to help Georgia realize a 4.0% GDP
growth rate, outperforming the U.S. national growth forecast of 3.5%.
• Despite the slowing economy due to the pandemic, the Georgia Department
of Economic Development generated $632 million in company relocations and
expansions in 2020, which bodes well for future activity.
• Atlanta’s higher-wage jobs — $60,000 per year or more — increased since the
by 3.0% in 2020, a positive trend as 2021 begins.

Multifamily
• Despite uncertainty in 2020, Atlanta’s multifamily sector has remained strong,
with overall vacancy just north of 5.0%. Vacancy is predicted to remain 6.0% or
below through 2025.
• Atlanta is expected to have one of the strongest rent growth recoveries in the
nation in 2021 (7.0%), which can be attributed to the region’s employment
opportunities, diverse economy and affordability.
• A dwindling supply of affordable single-family housing units, combined with
a resurgence in suburban demand bodes well for assets located throughout Atlanta

Industrial
• Annual industrial absorption is expected to remain strong through 2022. The
market has exceeded 16 million sq. ft. in annual net occupancy gains since
2014.
• Sustained occupier demand has led to landlord leverage for new leasing
transactions; new deliveries have not supplied much rental relief due to elevated
construction costs.
• More than 22 million sq. ft. is currently under construction, which will provide
needed space options to a tight market; any future impact to overall vacancy is
expected to be negligible to none.

Office
• Sublease availability has roughly doubled since the beginning of the COVID
pandemic, from 3 million sq. ft. to nearly 6 million sq. ft. Given that commercial
real estate fundamentals tend to lag general economic conditions, the sublease
level is expected to rise into 2021 as occupiers re-assess their requirements.
• A significant increase in space availability stands to place downward pressure on
average asking rents in the months ahead, but a strong employment recovery
will counteract this trend later into 2021.
• Post-pandemic, tenants are expected to maintain an emphasis on both work
flexibility and wellness for employees, including modified in-office work
schedules, continued work-from-home arrangements and access to greenspace
and outdoor workspaces.

[Curt Smith]

Hi All, Atlanta as well as other areas investors.   My last 18 mo deals and how I got them (tersely).

My business is buy, rental rehab, rent for ever.  Rarely a cash out REFI but just closed 2 and have 1 more queued for a total of $250k cashed out on the sidelines for 2022 deals.

- closed 9/28/21 (a week ago) Chattanooga area;  $45k cash 4/1.5, 1967, needs everything, elect, plumbing, sewer pipe, baths reconfiged baths to get 2 full baths, new kitchen,  Expected rehab <$50k, hoping to be at $40k.  Will rent for $1400.   I've been running Facebook ads, "need to sell, can't afford the mortgage" via a marketing contracgtor that contacted me via my BP proofile.  I pay for FB ads, he gets $1k if we close.  He's gotting one closing so far.

- Closed 7/20, larger 3/2, 1700 sqft,  subject to, took over $950 payments at $125k balance, rehab $30k, rents $1400.  Area is Rex ga, In clayton.  In better area of Clayton, comps will be >>$250k soon.  Got this via an SMS marketing campaign to "late on payments" list.   reireply.com is the SMS tool.  Sellers got zero at closing there where a few costs plus the rehab, but in all great deal, very nice house.  A keeper.

- Closed 3/20, a 3/2 over 2 car garage, up in Chattanooga, a subject to, took over $450/mo, gave sellers $3k,  took over $65k balance, and $30k rehab, rents for $1300.   This was a networking op.  The sellers where talking to their neighbor, a house I own, she is a renter and my tenant forwarded their contact info they where wanting to get out from under their house and move on.  I agree, this was frequeshly good luck.  But when yiou put out good karma, treat everyone well, karma (and luck) comes back to you.  

There was a 1.5yr gap with no deals.  Just optimizing our current holdings.  Selling a few, seller financing a few all to reduce my hassel, work re trimming the dogs and high effort doors.  IE 70% of your work as a landlord come from 10% of yiur doors.  At a point you need to clean house.

===  The market IMHO

There's stressed sellers in every market.  Most have been allowed to coast with many forms of support, payments deferals.  All that has ended an they need to decide soon what they have to do.   I expect all forms of marketing will be needed, post cards, SMS, FB/google ads, to reach these folks.    Your monthly advertising budgrt maybe >$1k or more, mine is.  So my deals have around $3k to $5k of advtising costs to get each deal, but thhey are all good off market deals that could NOT hvae been found otherwise.

"The harder I work, the luckier I get"   Someone famous said that?  Yougi Berra (baseball??)

Have ALL of your ors in the water, do/setup marketing in many channels (SMS, post card, PPC), learn how to carve out lists that target motivation that you want.  IE for me I want low equity, ideally under water must sell and I offer to take over their mortgage payments.  You might want high equity..   I use propstream for one source of leads and to do smaller post card mailings.  

I also strongly suggest you invest in education, learn from experts, experienced folks how to find sellers, negotiatem once you're in contract, how to rehab, then how to manage your rentals. I find being a member of a REIA, real estate investor assocation to be hugely valuable. BP for 24x7 global networking and learning, and REIAs for local to the zip code networking with local experience. Use meetup.org to find REIA groups. Join them all, narrow down to what works for you. I narrowed down here in the Atlanta area to GaREIA, they have the most experienced and generous investors to learn from. They also have a google group for near instant helps.

In short, deals are out there even today. True they are more expensive to find since you' have to spend more on marketing to find them. I also help new folks find rentals off zillow/realtor.com via email filters. there are cash flowing "fixers" on MLS/zillow/realtor even today. They still cash flow. I'm seeing newer folks buy at about 0.8% to 0.9% $rent/$all in. Not the 1% of a few years ago, but with rent increases in coming years owning rentals in Atlanta area will do yoiu well.

Read my paper on my buy and hold business model as a help;   See my BP profile, 1st paragraph, file called:   Buying a bullet proof rental portfolio.   I like helping folks get started.  As all here are happy to help as well.

Best of luck to all.