Would you Invest in West End Atlanta (Multi-Family) as your long term strategy?

[Azeez K.]

So here is the situation:

Strategy: Long Term Hold 10+ years

Area: West End Area, Atlanta

# of Units: 6

Built in: 1960’s

Property Class = C

Property Status = Due Diligence Period

Contract Price: $140,000

Closing Cost: $2,800

Total Purchase Cost: $142, 800

Down Payment: $37,800 (25% down payment+ Closing Cost)

Mortgage Amount: $929

Rents: $450 * 6 = $2,700

Effective Gross Income = $29,808 (after 8% Vacancy)

Total Operating Expense = $14,900 (Opex)

NOI = 16,000~

NOI after Debt Service = 5,000 ~

CAP= 11.6%

Problem:

1.Although the numbers seem to make sense I am not sure about the potential growth in the west end area of Atlanta. I am hoping the new Falcon’s stadium could bring in some development? Any thoughts on the West End Area of Atlanta?

2.Cap rate seems high however, I have a strange feeling that it could be a headache to collect monthly rents from the tenants – As the area is not fully developed and there are pockets of developed and run down lots. Tenant quality may be a hit/miss.- Any thoughts?

3. Is there other area of Atlanta you would rather spend $140,000k from a long term strategy to maintain positive cash flow levels and gain long term appreciation?

I would love to get thoughts of fellow investors in the Atlanta area and would appreciate your insight on the deal? Go or No-Go