New to BP - Michael in Atlanta, GA (Metro)

[Michael Whillock]

Hello everyone:

I joined BP about a month ago and am just now getting around to introducing myself on here. I figured it was time to check that off the list :).

I am currently trying to assess the current landscape to determine how and where to invest next. I work full time so that means I'm mostly a passive investor. Well, I have an LLC in my SDIRA. So, by definition, I'm a passive investor there. However, I'm looking to create another, separate entity for real estate investments, as well.

While I'm trying to educate myself on the landscape, I'm looking for a SFH as a buy and hold rental. Ideally, it would be a BRRRR but it doesn't have to be if it cash flows well from day 1.

My long term goal, I assume, is similar to most everyone else — to have passive income exceed expenses. In reality, I’m just a small investor with big goals. 

Finally, I’m looking forward forward to chatting with the group. 

[Alec Granger]

Hey Michael,

There are a few things that are suggesting the market is turning towards more of a BRRRR market. Just looking at the stats for 30310, which is a zip code that we have done a lot of business in the past, there are a few indicators. First, DOM are significantly higher than last year. In September 2018, the average DOM for this zip code was 7 days compared to 24 days in September 2019. Similarly, total months of supply went from 2.6 in September 2018 to 4.3 in September 2019. Although, it is still a seller's market, this would indicate that the market is becoming more saturated and is slowing down. However, the average rental rate is still increasing. From January 1 to June 1 this year, the average rental rate was $1,291/month. Since June 1 this year until now, the average rental rate was $1,470/month. This is a similar trend that we have observed across a variety of other zip codes as well. Along with increased rental rates, prices are still low enough for the cash flow to make sense. In 30310, the median sales price in September of this year was $234,500. The city of Atlanta as a whole has only seen a 7.8% increase in sales price since this time last year.