First Property As A MTR-Quadplex

[Leslie Daniely]

Hi BP.  I have been wholesaling for about 3 years off and on.  I'm ready for my first purchase and I want to invest in MTR.  My strategy is to buy multi-family properties near Level 1 trauma centers or 4-year universities.  I've identified one in Macon, GA and it's less than a mile from the hospital.  Would you recommend this strategy for my first property or should I complete a fix and flip first to get familiar with what all goes into rehabs?

[Miguel Del Mazo]

Hey Leslie,

I am an Atlanta native who has been buying, rehabbing and managing MTRs for the last 4 years with my wife. Last year (Sept '23), we were considering branching out to a new market within GA. To that end, I made a Google sheets document with every hospital system in GA along with the following data:

City

Zip Code

Rentometer 2/X   (what a 2 BR, any bath) goes for on Rentometer)

Rent Rentometer 3/1+ Rent (what a # BR, 1.5+ bath) goes for on Rentometer)

"Minutes to home"  (how far a drive it is for us)

"Staffed Beds"  (measure of how big a hospital is)

"Total Discharges" (a different measure of hospital size)

"Patient Days"  (yet another different measure of hospital size)

"Gross Patient Revenue ($000)" (you guessed it, hospital size)

Map Searches & Housing Requests (this and everything below was from FF.com stats page)

Furnishedfinder.com Page Views

Total Rooms

Private Rooms 

% Units Hotels

% Whole Place > 2500 

% Whole Place > 2k < 2.5k 

% Whole Place > 1.5k < 2k 

% Room > 1500 

% Room > 1k < 1.5k 

Page view per room

This allowed us to narrow our search to hospital systems near us (less than 2 hours) in a less competitive market (higher page views per room advertised on FF.com) with a significant % of units being rented on FF.com at higher rents (more $).  Looking back, I probably could've added average sale price in the area. This is all public data, except for the rentometer estimated rents (which you should expect to mark up for being fully-furnished).  BP has a good rental estimator that can replace the data from Rentomenter.

So how did Macon turn out? Really well...which surprised me. The 6th, 7th and 8th highest page views per listed properties were in Macon (out of 113 hospital systems in GA, counting ones with missing data). There is demand for MTRs in Macon that is not being met.

However, I feel that there is a reason for investors not meeting that demand. The population in Macon has been decreasing since before I was a kid, 40+ years ago. Decreasing population limits appreciation potential. There is no "good part" and "bad part" of Macon; it's all jumbled together except for a thin ring around Mercer Univeristy. That means that all neighborhoods have some element of "D class", so even if you make your property "A class", it will be held back in appreciation. Many properties in Macon lack central heat and air which I feel is a "must-have" amenity in GA. Adding it is costly, but doesn't have a good ROI which decreases the ability to force appreciation.

So, too long; didn't read: Macon has a lot going for it as market (big hospitals, light competition, reasonable expected rent), but we opted to not invest there because while the cash flow was appealing, we really want to see great appreciation potential in what we buy. Of course, YMMV.

I would definitely get a good look at the neighborhood around your possbile purchase, and see if you think a nurse would feel comfortable finishing a shift and coming from the hospital to your quadplex alone and in the dark.