New to BP: focused on rental properties in Atlanta, GA

[James D. Beaty]

Hello Bigger Pockets,

In August of 2020 I formed an LLC for investing in rental properties focusing on the Atlanta metro area. The BP website has provided information and experiences that were extremely helpful for creating the business plan for the LLC. The plan was to invest in Class B /C properties (and neighborhoods) with the following investment criteria:

CoCROI >= 8% (assumptions property management 10%, repairs and maintenance 8%, replacement reserve 8%, vacancy 5%, loan - interest rate 5%, 25% down, 30 yr loan)

Over the past 5 months I have found very few properties that have met the criteria and have begun to focus my search on the following areas: Marietta, Smyrna, Austell, Hapeville, East Point, and Atlanta.

My understanding is that the market is very tight right now (sellers’ market - due to low interest rates and low inventory). Through analysis of many different properties, I have also concluded that I am likely to meet my CoCROI numbers with multi-family class C homes in class C neighborhoods.

Do you all think it is possible to get 8% return in this real estate market or do I need to change my strategy by reducing my CoCROI expectations or reduce the condition of the home / neighborhood to meet my numbers.

Thank you again to all of the contributors to this site. The information here is invaluable.

James