I am an out of state investor and I am interested in buy and hold properties with a focus on cashflow in the Atlanta area. I am looking into sfh and duplexes. Being out of state I want as little headache as possible so I want properties in areas that would attract good tenants. So I am focused on B/B- neighborhoods. I would like to stay under 150K and have rents at or close to the 1% rue. So my question is: where should I look or focus on to meet this criteria? I've done some research on Stone Mountain and Decatur. Are there other areas that would meet my criteria?
If you're looking to stay in Metro Atlanta, 150k or less at 1% is difficult (though not impossible).
The areas mentioned (stone mountain, union city, and douglasville) are all great cash-flowing areas, though you shouldn't expect the type of appreciation you may get in the next hot Atlanta neighborhood.
Be careful about labeling an entire neighborhood in Metro Atlanta by a grade. Homes, renters, and crime change drastically block to block and even street to street. You need to have boots on the ground to give you intel.
I think the Tri-Cities have a bright outlook. I am under currently under contract with a client for a duplex in Hapeville at $135,000. It will rent for at least $700 each side.
Brooklyn, NY · Member since 2017 · 28 posts · 21 votes
6y
I've had a SFH rental in Stone Mountain for the past 1.5 years and haven't had any major issues. First several months involved some repairs and tenant replacement but got it all done and this year has been smooth as of yet. I visited the area when I purchased and to me, a born and raised NYCer, it seemed safe and actually pretty nice. I'd check the specific streets/neighborhoods where the prospective property is however as just like anywhere things can change quickly.
I've had a SFH rental in Stone Mountain for the past 1.5 years and haven't had any major issues. First several months involved some repairs and tenant replacement but got it all done and this year has been smooth as of yet. I visited the area when I purchased and to me, a born and raised NYCer, it seemed safe and actually pretty nice. I'd check the specific streets/neighborhoods where the prospective property is however as just like anywhere things can change quickly.
Thanks for the reply. How did you decide on Stone Mountain? Where there any other areas you looked into?
Brooklyn, NY · Member since 2017 · 28 posts · 21 votes
6y
I was looking at many neighborhoods in Atlanta, Stone Mountain came up a lot as having lower housing prices at the time. I was initially looking into neighborhoods with better school districts however the numbers didn't make sense for those properties, I was willing to accept a lower cap rate but the cash flow wasn't there. I told my broker to shift strategy a bit more towards cash flow and more properties in Stone Mountain popped up. The property I wound up purchasing was one a three a single seller was unloading. I looked at each, ran the numbers and made an offer on what looked the best. It was around $100k which was lower than the range I originally planned to buy.
Real Estate Agent · Atlanta · Member since 2019 · 44 posts · 24 votes
6y
Kevin,
If you are looking to stay under 150k all in, I would suggest looking on the south side of Atlanta. Areas like, Union City, Riverdale, Forest Park, and others are up and coming areas that you can get properties at a pretty big discount with a lot better %. For example we have had several duplexes in Union City that have been around 110-120k all in and rented out 725 on each side. Another good area is Douglasville, it's a little further out of the city but you can typically get houses out there in the 120-130 range and can cash flow higher than the 1% rule. I hoped this helped!
If you're looking to stay in Metro Atlanta, 150k or less at 1% is difficult (though not impossible).
The areas mentioned (stone mountain, union city, and douglasville) are all great cash-flowing areas, though you shouldn't expect the type of appreciation you may get in the next hot Atlanta neighborhood.
Be careful about labeling an entire neighborhood in Metro Atlanta by a grade. Homes, renters, and crime change drastically block to block and even street to street. You need to have boots on the ground to give you intel.
I think the Tri-Cities have a bright outlook. I am under currently under contract with a client for a duplex in Hapeville at $135,000. It will rent for at least $700 each side.
Brooklyn, NY · Member since 2017 · 28 posts · 21 votes
6y
Thanks for the question, there's different ways to handle the repairs. You can find your own repair companies, have them work with your property manager to get it done then have your property manager confirm. Or you can have your property manager supply the repairman... Obviously this can create a conflict of interest and warrants caution but as an out of state investor there's not many options. I personally had my property manager supply the contractors but I had them photograph the work that must be done so I have some semblance of verification and my property manager also gets multiple quotes. I then have them verify the work when its done and get pictures of the completed work. If the contractor doesn't get everything done, they withhold my payment to the contractor. Obviously this still involves levels of trusts but reputations are on the line and its the nature of the business of an out of state investor. It just goes to show how important it is to have a team set up and also make sure you're involved and keeping your eyes open. There's been a couple of times when I called the contractor myself and re-negotiated a price or item on the quote.
Real Estate Agent · Atlanta, GA · Member since 2014 · 683 posts · 317 votes
6y
If you look inside the perimeter, you will find tons that's under 150K near downtown but also need lots of $$ to fix them up.
If you look outside of the perimeter, you can possibly find property around 40 mins from downtown. Areas like Dallas, Hiram, Douglasville that's around $150k in good condition. rent around 1200. I personally have 2 properties in Powder Springs. around 160K. rent around 1350.
Over all it's hard to find property under 150K in rent ready condition. the further out you go, more deals come up. Good luck on your search. Don't hesitate to reach out if you need a agent to help with the process to narrow down your search.
If you're looking to stay in Metro Atlanta, 150k or less at 1% is difficult (though not impossible).
The areas mentioned (stone mountain, union city, and douglasville) are all great cash-flowing areas, though you shouldn't expect the type of appreciation you may get in the next hot Atlanta neighborhood.
Be careful about labeling an entire neighborhood in Metro Atlanta by a grade. Homes, renters, and crime change drastically block to block and even street to street. You need to have boots on the ground to give you intel.
I think the Tri-Cities have a bright outlook. I am under currently under contract with a client for a duplex in Hapeville at $135,000. It will rent for at least $700 each side.
@Kevin Charles, If I had a 150k today, I personally will focus on the south side of town and this is the strategy I will apply. I will look for homes in the 60-80k bracket, they are usually 3/1's and you will find them. If I find closer to the 60k range, I will invest another 60-80k adding square footage and making it into a large 3/2. You will usually hit values of around 180k after work is completed. You will have a brand new home that can rent for about 1200 monthly but most importantly, will not need any works for a long time. The further advantage is that when appraised 6 months down the road, you are likely to be able to cash out lets say 70% of 180k value which comes to 126k. You would almost have pulled all your cash out, still have 30% equity and a solid home that is likely to appreciate faster and build equity. Hapeville is decent and I have seen values rise steadily, it is still a good area to invest, there are still good deals in East point and the other areas mentioned, my strategy will always be to buy it run down, preferably solid brick homes and completely revamp the entire home. Another strategy is buy something decent foreground 90k, spend 10-15 sprucing it up and rent for around 1000-1100.
This would be my preferred method but I know there are lots of experienced investors that can shed more light.