All Forum Posts by: Ben Firstenberg

Hey Mark, I know quite a bit about STRs in Atlanta. I've studied the local rules and regulations and would be happy to offer some guidance. 

I'll be totally honest, I would not recommend pursuing AirBnB style rentals here. The market is somewhat saturated due to extremely high supply. And frankly, Atlanta is not really a vacation destination. Great place to live, not a great place to visit. Not that you CAN'T make money, I just don't think it's the best strategy at the moment. 

That said, we've had a lot of success with mid term rentals recently. I've been recommending that strategy to all of my clients. 

I'd be happy to help if I can. Please feel free to reach out. Contact info is in my bio

I agree with Josh here. Lately, I've been recommending all of my rental clients to consider a rent by the room model, whether it's with Padsplit or FurnishedFinder or any other platform. I think if you're going to invest in Atlanta, this is the best way to do it until you've owned the property long enough that a standard LTR can cover the expenses and turn a profit. 

As you pointed out, supply of small multifamily in the Atlanta metro is low. But you can definitely find single family homes in the $300-350k range that would make great rent by the room candidates. 

For Padsplit, I typically recommend a budget of at least $100k, as that model works best when adding rooms, which requires some upfront investment. 

I personally wouldn't recommend looking in Gwinnett county, nor Athens or Augusta. I'd recommend Cobb or Paulding counties. Parts of Decatur as well. If the prices are too high there, I'd look in Clayton County. 

Hope that helps. Feel free to reach out if I can be of further assistance. My contact info is in my bio

Negotiating is such a valuable skill. It's often difficult, unpleasant and uncomfortable, and for that reason it's absolutely essential to know what you're doing.

Hope the book helps! I've never read it but it's on my list now.  

I think I see what you're getting at. First of all, I'm NOT a CPA so verify everything with a tax professional. 

However, I know some about deducting expenses on your taxes. I believe that's what you mean by "waive"?

The way it would work is you'd calculate your total income for the year. In this case, $2300*12 months. Then you would subtract business expenses you incurred, such as property tax, Mgmt fees, HOA, insurance, mortgage interest and possibly others. You pay tax on the remainder.

So in this case, you would still be losing $700 per month, as you said, but your income tax for the property would be $0 since you're operating at a loss. I would actually call this a relatively successful house hack in this market, assuming all of these numbers include you living in the property. In a sense, you're paying $700 in "rent" AND you get to own the property long term. 

Converting to a rental after you move out is a great strategy too. Doing multiple house hacks in a row is a great way to build a portfolio quickly. If it were me, I'd plan on continuing to rent them by the room for a few years after you move out. It's extra work but the extra income will help you cover the mortgage payment until rates come down. 

Alpharetta is definitely a difficult location to pull off a house hack, as you've probably already seen. Home prices are high and rental demand is not very high. 

I hope that helps. If you're looking for an agent who specializes in house hacks and rental properties, please feel free to reach out. My contact info is in my bio. 

When it comes to this stuff, my thought is always "Does this change my investment thesis?"

You bought this property presumably because you liked the location, price and potential returns. Has anything changed?

Much as we talk about cash flow, the real money is made over the long term appreciation. Let's say you try to evict these people and it turns into a long drawn out struggle that lasts 6 months or a year. Okay, bad year. If you sell for $500k in 20 years, do you really care?

I've had problem tenants before too. And every time I consider selling. But I don't because I believe in the investment. If at any point I don't believe anymore, it'll be on the market tomorrow. 

 Michael makes a good point. You would only save on the seller's agency commission and would still have to pay the buyer's agent. I calculate that you'd save somewhere around $20-25k in fees on the two properties. Just like you said.

What you're paying for when you hire an agent to list your property is partially the license but mostly the expertise and the work. Selling a house requires a fair amount of work behind the scenes that most people don't see. 

I DO think that getting your license to learn about the mechanics of a real estate transaction is a good idea. Understanding title, liens, deeds, mortgages and all of the other pieces is definitely useful information. That said, you'll learn a lot more actually working as an agent than you will from just taking the test. I can tell you that first hand.

I think for me the deal breaker would be which brokerage you plan to sign with. If you know someone at that brokerage and they were willing to help teach you the necessary skills to pull off the transaction, then it would probably be worth it. But if you were going in all alone, I don't think I'd recommend it. Hope that helps

I'm no expert, but I can say a little bit about the area. It's a pretty rural location. You're so far from Atlanta that agents, property managers and contractors in the city probably aren't going to be willing to make the drive. The rental market likely won't be very strong, but if you own them free and clear of debt you may be able to make some income. 

If I were in your shoes, I'd likely sell unless there is sentimental value to these properties. Or unless you see yourself wanting to keep the land as a vacation home of some kind. Since you're out of state, it's going to be a lot of hassle to deal with rehabbing the property and managing the rental and finding good people may be hard. 

My condolences for your loss. I don't mean to speak badly about your family members' assets. Leaving land to your heirs is certainly a remarkable achievement. Just giving the honest truth about the situation as I see it. Maybe the best thing would be to sell this land and use the money to buy property nearer to you. Or property in Atlanta or Birmingham that would be easier to manage. Hope that helps 

 Savannah definitely has potential. I'm no expert, but my guess would be price/rent ratios aren't great due to the hype and the fact that it's still a pretty small city. 

Gwinnett is definitely a place where price/rent isn't great right now. It's a very desirable place to live, so retail investors have driven prices too high. Marietta is a little better. 

What kind of deal are you looking for? Feel free to reach out in DMs

Hey Ricardo, as @Michael Dumler said, STR is tricky here in the metro. The market has really saturated due to high supply. You may have luck in the mountains, as you indicated but in my experience the prices up there are extremely high.

Whenever clients come to me asking about AirBnB and STR, I always recommend Padsplit as an alternative. Many on here are familiar with the platform, as it's a great way to juice cash flow and the city looks much more favorably on it than AirBnB since Padsplit provides much needed affordable housing.

The purchase prices are cheaper, the supply/demand ratios are much more favorable, the cash flow is higher and more reliable and you can take advantage of the massive growth Atlanta is expected to see in the coming years and decades. 

Hey Matthew, I've been in your shoes before. Wondering what it is I actually WANT to do. What I can actually bring to the table. It's tough. 

If I woke up tomorrow in your shoes, I'd work on getting back to college and finishing up that degree first of all. Second, I'd start looking for more corporate type internships. Reach out to private equity companies, commercial lenders, anyone you can find who does real estate. Look for smaller companies and you'll probably have more success. Above all else, try to really get to know people. Don't just throw out applications (nobody ever reads those anyways) but try to get people on the phone and ask thoughtful questions about what they do. It'll take a while, but you'll hit on something eventually. 

If you're interested in bigger pockets type of real estate (entrepreneurship and hustle), you probably won't last long in the corporate world, but you'll learn a lot and you'll work with a lot of big time professional investors. You'll see some are very smart and hardworking, others are full of crap just like anyone else. 

All along the way, keep thinking about what you want to do, what you like to do and what you're good at. You'll get more and more specific with every step. It's not easy by any means. It involves doing some stuff you don't like in order to figure out what you do like. 

Stick with it, put the work in, be open to opportunities and try to meet and get to know people and build relationships. You'll figure it out. 

Hope that helps!