Biggest Factors in Deciding Where to Invest?

Question

Hey everyone!

I'm a beginner investor in the Atlanta, GA market and am looking to purchase my third property with intentions of going the BRRRR route this time around.  However, I'm having doubts about where exactly I should be looking and how I can ensure (as much as possible, that is) that my ARV is going to be where I need it to be.  Distressed properties inside the perimeter (ITP, for the ATLiens) are most desirable, but purchase prices are a bit higher, and sort of knocks me OTP in areas 30m-1hr outside the city.  I'm looking for advice on what factors I should consider when determining if a specific area is a good place to try the BRRRR method.

Also, aside from a Google search for what other units are renting for in the area, are there other ways/factors you look into to determine what rents you can get for your newly rehabbed property?

Thanks!

Alison DerHagopian · Answer

@Brenden Mitchum thanks for all the info Brenden. You’re right, within an hour of the city is probably a safe investment, just need to do a bit more research to make sure I get solid comps!

Thanks

Salvatore Lentini · Answer

@Alison DerHagopian - I have a list of 20+ sites to use to determine rents.  Message me if interested.

Brenden Mitchum · Answer

Hey @Alison DerHagopian, welcome to the BP community!

As you mentioned, ITP is quite tough right now. Prices and competition are through the roof, making it tough to even purchase a property, let alone a deal. Everyone wants a property ITP, but the ARV in many parts far outpaces the rents so even if you do snag a distressed property, chances are you won't cash flow after that refi. Your options are to look in the areas that have lower home values (parts of S. and W. ATL) or get creative. Rent by the room or setting up a SFR to function as a MF are a couple options that will increase your income, allowing for cash flow after refi in the pricier areas.

Nothing wrong with looking OTP though, plenty of great suburb neighborhoods around the city. To be honest, you can probably run a successful BRRRR just about anywhere within an hour from downtown. Just make sure it's a market you understand and in a neighborhood people want to live in. As long as the comps strongly support your ARV assumptions and you are conservative with your rehab estimate, you'll be fine. The real challenge will just be scooping up these distressed properties before one of the myriad of ATL flippers do.

My best advice for rental comps is to use multiple sites and also link up with an agent to pull MLS rental comps.

Please, feel free to reach out anytime if you have questions or just want to chat!

Duane Alexander · Answer

You can try rentometer for determining rents. Propstream also has a rent estimator too. As does zillow. The process is basically the same as determining ARV. Just look for similar properties in similar conditions and see how much they rent for.