New Investor Interested in SFR in Macon, GA. Any advice/contacts?

Question

Hi BP members! I am new RE investor and have been reading and listening to every book and podcast I can get my hands on for several months now but am now wanting to actually take action! I currently live in Atlanta and have been scouring the local market with no success and have started to shift my focus to Macon. I'm a landscape architect and have done some work in Macon so I am somewhat familiar with the city. It seems that downtown has started to come back to life - though it does still have quite a bit of vacancy. The cost of entry there is also SIGNIFICANTLY lower than Atlanta as well! I am mostly interested in A or B class SFR or Duplex buy and hold / BRRR. Wanting to start small and slowly build my portfolio.

Does anyone have advice / a read on the Macon market that you could share? Any areas to avoid or recommend I focus my attention on? Would you recommend looking into student housing? I've run some numbers on a few properties but wanted to get advice and hopefully make make connections with local investors, property managers, contractors, etc. I welcome any and all advice as well as just a hello from other investors in the Atlanta / Macon area! Thanks in advance.

Lee Taylor · Answer

@Curt Smith please don’t compare Macon and Warner Robins. That’s like apples and bowling balls.

Bibb County (Macon) is depressed, runs a deficit every year, the schools are terrible, and is only focusing on revitalizing the downtown area.

Houston County (Warner Robins) is thriving running a surplus every year, has a growing population and high end jobs, amazing schools throughout the county, and is constantly developing infrastructure to keep up with the growth. There’s new businesses coming in regularly and appreciation is solid, but not overwhelming.

Brice Burns · Answer

Hey Jeniffer,

I actually live in Macon and can say investors from all over the states are wanting to invest in macon!

Section-8 housing is HUGE here. The County is in desperate need of more 4BR houses for section-8 tenants. My partner and I get calls almost every day with people who have 1,100$/month vouchers for section-8 4BR homes. So, this is just one of the things we invest in down here.

And you're correct, downtown has come back to life! I was born and raised in Macon, so seeing Downtown receive a nice facelift has really made the city more popular again. Not only that but an Amazon Fulfillment Center is almost ready to being business. So Homes in south-east/central Macon and even Warner Robins are flying off the market thanks to Amazon.

Macon is VERY diverse. North macon is where all of the big expensive homes are, I'd stay away from there unless you only have the capital to just refinance. East Macon is a great place to invest right now as there are two large Geico buildings in that area and an old tobacco plant that's called 'Brown and Williamson'. They employed 3,000 people, however, it closed in 1997 due to legal troubles. Funny story, I actually spent an entire summer there cutting all of the grass and keeping it beautiful. Anyways, I pass by this massive plant once a week and they're beginning to remodel it. So if I had to guess someone is in the process of buying it and bringing it back to life!

South-west, Macon is very low-income. However, there are tons of very nice brick homes down there that a lot of small investors are beginning to fix up and flip. I'm actually closing a wholesale on a 20-unit complex, in south-west, Macon for 50k, and it's a DUMP, but two big pocket investors are going to re-do the entire thing and make it a living community again!

If you have any questions about Macon let me know! I love this city and the direction it's heading.

--

Brice Burns

Middle Georgia Rental Propeties, LLC.

Curt Smith · Answer

Please read the Bullet Proof rental portfolio paper linked off my BP profile 1st paragraph.

Buy in the path of progress.  This means look for new jobs, growing jobs, new employers moving to the area bringing 500's, 1k's new jobs.  Rentals work great when there's growing jobs.

Buying then renting Sec 8 is a static, flat game. Market rent is dead due to no new jobs.

I'm happy for the Macon guy who/s doing well and happy in Macon.  But for those who are not living in Macon and have a choice please please read my paper, and buy ONLY in the path of progress.

Here is a decent "is it dead" indicator.

https://www.zillow.com/macon-ga/apartments/3-_beds/2.0-_baths/paymenta_sort/?searchQueryState={%22pagination%22:{},%22usersSearchTerm%22:%22Macon,%20GA%22,%22mapBounds%22:{%22west%22:-84.16672693457032,%22east%22:-83.2754610654297,%22south%22:32.55794992473609,%22north%22:33.079254056382666},%22regionSelection%22:[{%22regionId%22:32626,%22regionType%22:6}],%22isMapVisible%22:true,%22mapZoom%22:11,%22filterState%22:{%22isForRent%22:{%22value%22:true},%22isForSaleByAgent%22:{%22value%22:false},%22isForSaleByOwner%22:{%22value%22:false},%22isNewConstruction%22:{%22value%22:false},%22isComingSoon%22:{%22value%22:false},%22isAuction%22:{%22value%22:false},%22isForSaleForeclosure%22:{%22value%22:false},%22isPreMarketForeclosure%22:{%22value%22:false},%22isPreMarketPreForeclosure%22:{%22value%22:false},%22beds%22:{%22min%22:3},%22baths%22:{%22min%22:2},%22isCondo%22:{%22value%22:false},%22isApartment%22:{%22value%22:false},%22isTownhouse%22:{%22value%22:false},%22sortSelection%22:{%22value%22:%22paymenta%22}},%22isListVisible%22:true}

Zillow rentals, 3/2 just houses.  Sort by cheapest.  If there's any decent looking houses <800 that is dead.  Think of it. Why would anyone buy a house, fix it up then renbt for 800?  Thats crazy.

If any rentals under $900 its bad.

If any rentals under $1k sort of bad.

If any rentals under $1200 weak.

If only rentals >1200 that is a strong rental market.  This is entirely based off qualifying at net income 3x rent.  Work backwards what kind of jobs (2) does it take to qualify for a $800/mo rental at $2400 net income?  You need to be an experienced landlord and know jobs.  You can pick up aluminum cans and make 2400/mo.  There's about 20 rentals UNDER 800 today.

I've done direct marketing to vacant houses in Macon's county.  100's and 100's of vacant 1940-60's 2/1, 3/1's in rough shape.  The owners will nearly give them away.  Buy a list of vacants.

Yes there is a business model of buy cheap, fix bullet proof, and rent sec 8 in Macon, Columbus, Milidgeville, Warnner Robbins....   Sure go ahead.   It works maybe.   Not for me.  I need tenants to have a bank account a FICO etc.

Read my paper.  I agree / admit that I don;t do supper low end rentals.  It can work in Macon (similar weak areas).  Just not for me.  I buy where houses appreciate, tenants pay, nearly zero evictions, excepting for sec 8 rent needs to be collected face to face.  I don;t do that kind of rental business.

But many folks "become the expert" and make this work.   I'm not really raining on Macon!!!  I'm shinning a light.  Also giving a tactic re rental prices to detect dead markets.  Check out other cities you know are dead looking for 3/2 houses under $900?

The math;  any market that is growing, new jobs, take a min wage job of $10/hr and a somewhat better job of $15/hr and multiply times 160x hrs (1 mo) =  10 + 15 x 160 = 4k after taxes = $3200 so qualifies for $1100/mo rental.  Which means a 3/2 house should be $1100/mo.  If you see $800 or 900 or 1000 3/2 houses there's problems.

Yes I hope Macon, Miledgeville, Columbus, Albany all turn around....  Real estate is location location location and rentals especially depend on jobs, ideally growing jobs.

Use indeed.com with radius set to 5mi to compare one locale to another.  Normalize for population.  Google is handy.

Curt Smith · Answer

@Jennifer Teasley Join all the local REIAs, which is top advice for everyone.  Use meetup.org to find local real estate events.  BP / youtube are great but real knowledge is from the more expeirenced folks I found in REIAs.  I ended up narrowing down to GaREIA which has good buy and hold and other REI educatoin, networking etc.   Join them all and choose what you find most useful.

Jennifer Teasley · Answer

Thanks everyone for your feedback! I’m not sure I am up for Section 8 housing just starting out. Maybe sometime in the future when I’ve gotten my feet wet! @Brice Burns  thanks for sharing more detail on Macon’s market though Macon’s crime rate, poor school ratings, and poorly run Macon-Bibb government is definitely a concern. Thank you for bringing these points up @Curt Smith. I read your bulletproof rental  guide and it was very informative - thanks so much for sharing! I will definitely use those strategies in my search for the right market to start out in. I’m not counting out Macon as of now (it still has a lot going for it- Naviscent, Mercer, Amazon, amazing architecture/infrastructure, Geico) but I think I will take a step back and follow the growth like you mention! I’m happy to hear any else’s thoughts and if you have any other suggestions on successful rental markets near Atlanta.

New Investor Interested in SFR in Macon, GA. Any advice/contacts?

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