All Forum Posts by: Anthony Fontana

 Rakesh - a few other people mentioned rent by the room and medium term rentals on this thread, we have seen great success with both of these strategies here in Atlanta. There are also certain exurbs of Atlanta 30-45 minutes outside of the city where we're still finding day-one 1% rule properties, specifically in the small multifamily space. Happy to connect..

@Fernando Corona this was a great deal, crazy it was almost 3 years ago!

@Tony Lin I agree with @Brent Kawakami, SMP has been managing our stuff for years. They're a great company with great leadership.

Happy to connect you if you'd like to speak with their team.

@Adam Charlton I totally agree with everything said in the above posts. 2-4 unit small multifamily is tough to find on the market. If you know where to look, there are some fun and interesting ways to dig up off market deals in this space. Happy to connect and talk more about it!

@Colton Norman I'd refinance now and hold it. You're playing a tricky game trying to time the market ahead of rate hikes. I watched a lot of people fire sell their deals in 2018 when the fed was hiking rates and in 2020 with the onset of covid. All of them wish they were still holding those properties.

Refinance into a loan that allows you to have a flexible exit and enjoy the cashflow. Yield is also very difficult to come by right now, so if you're truly cashflowing in a good submarket, it will be hard to replicate that income stream with another deal.

@Eva Fox I'm happy to introduce you to a 1031 intermediary that I have worked with in the past. Generally speaking, they can point you in the right direction and answer questions to ensure that you remain compliant with 1031 guidelines. 

Feel free to reach out and I can make the connection.

@Mel Park I fully agree with the point you make throughout this thread about OpEx and CapEx not being a % value. You are fully correct in that those expenses should be a flat number depending on the size of the home, vintage, and how well you capitalize the property up front.

Thanks @Ivan Figueiredo , I appreciate you sharing this. @Elin Trinh , I just shot you a PM, would love to connect!

@Damien Lee a couple things here. Really detailed underwriting, glad to see you're making it a habit.

1. it is customary for the seller to pay all real estate agent commissions, this can vary a little bit deal to deal, but I would not expect to pay 3% commission as the buyer.

2. This condo has rent restrictions, so unfortunately you are not able to rent within this association. You'll want to get on an MLS search that excludes condos with rent restrictions, an agent should be able to set you up on that. My first 2 deals were condos/townhomes and even in associations that did allow renting, there was still red tape that did not allow me to do STRs and I also had annual rental fees to pay the association. These are things you'll want to watch out for and have your agent request during DD.

3. I would never assume $0 in repairs. Almost every deal has some level of repairs that need to be done, even something that is almost totally turn key will have 1-5k worth of work to do after closing. It is best practice to incorporate repairs into your underwriting.

4. It does not look like you recalculated your taxes as they will be reassessed after you close, normally fairly close to your purchase price.

5. Vacancy of 2.5% is not realistic, this should probably be somewhere around 10%

6. Even though biggerpockets tells you to calculate repairs as a % value, that is not best practice. If your repairs are calculated based on a % of revenue, that does not exactly make for accurate underwriting. If you improve your property and increase rent, your repairs will more than likely decrease rather than increase. Also, if your property is in bad shape and you rent for $500, your repairs and maintenance will probably be higher than an updated property that rents for $1500. In my experience, my condos have annual repairs and maintenance of around 600$ per year. Single family houses will be a little higher.

@James D. Beaty you should see higher cap rates in tertiary markets like Rome and Dalton nowadays, but that typically comes with more market uncertainty and less sound fundamentals. Athens has cap rates similar to ATL as the two markets are seemingly becoming one as ATL expands east. Unfortunately I don't think you'll find returns are more favorable in Athens compared to other submarkets of ATL.

My recommendation would be to niche down on 1 or 2 counties and then be ready to get aggressive with your terms (reasonable DD, higher EM, shorter contingencies) when the right opportunity arises. I'd also make sure that you understand the timeframe that your lender needs to perform underwriting, appraisal, etc.

Deals are generally being awarded to those who move the fastest and have the strongest terms nowadays.