Hot Atlanta Investment Areas

[Kasey Gourley]

Hello BiggerPockets,

I recently moved to Atlanta and I am not familiar with the real estate market here quite yet. I have a few different searches saved on Redfin, Trulia, and Zillow with homes for sale and rentals properties in the Atlanta area and have been combing through those searches daily to get an initial feel for pricing and rental rates. My questions is what parts of town are hot areas for investors, specifically investors employing the BRRRR strategy? What parts of Atlanta are you investing in, what parts of Atlanta are seeing a surge in growth or expected to see a surge in growth, and what parts of Atlanta should I stay away from?

I realize this is a broad question and Atlanta is a very large spread out city, but my hope is it get the name of a few areas (Doraville, Smyrna, Decatur, etc.), so I can focus my search and begin driving those areas to look for opportunities. Willing to work within a 1 hour radius of Atlanta.

My criteria: 

1. SFH under $150k needing less than $10k in rehab and will rent for 1% of purchase price.

2. Duplex, triplex, or quad under $300k, each unit needing less than $10k in rehab and each unit cash flowing $250/month.

[Curt Smith]

H Kasey, I strongly suggest you join the local REIAs!!  The locals are in these REIAs  know where the good / bad / higher performing areas are.  Make sense to hook up with local investors doing real deals daily, right?

I left buying rentals in the metro area in 2014 as the hedgefunds moved in and retail found they could borrow again.  I'm picky at my cap rate >13% and all in cost being under $75k.  

A general answer and solid advice is:

- Know where the jobs are.  Tenants (or buyers if you flip) need good jobs.  Do deals in the path of good jobs.  BEST YET is know where NEW employers are moving and buy there there.

- Buy in good school districts.  Good payers are smart families with good jobs wanting the best for their families.  I recommend minimum of great schools 5 or better.  6 or better is safer.  Higher is tough to make decent cap rates.

- Cute house, nice area. Again a good goal but at what price.

To answer your question from my experience of buying 7 rentals last year, 10 the year before, is:

- Follow the expressways up from 285 45 minutes.  Buy 10 minutes to the expressway. IE convenient to transportation.   #1 tip:  I75 up 45 minutes and 10 minutes each side.  I85 North 45 minutes.   Anywhere along I316.  316 is the next I400 for new jobs and growth.

I do recommend you figure out search tools finding new employers.  Amazon distribution centers are good magnents (googleable).

georgia.gov is a searchable site for major employers coming to GA.

For example my last 6 rentals all cap rate around 12.8 to 13.5% AND meet all of the above criteria.   Folks buying in good school districts in Gwinnett or Cobb for example are having to settle for 10%...  Its what ever you're happy with.

BTW if you follow all of the rules above, you'll be kept out of the low priced areas often called war zones and the tough to manage areas too.  They never meet the great schools minimum of 5 OR near good jobs.