All Forum Posts by: Emily Beatty

How did this turn out for you@David Robertson? I am considering exploring converting a separate 2 car garage in the back of a duplex into an ADU. The lot is big enough to where I may be able to make it a legal triplex but I'd want to explore both options. Any input @Azeez K.? 

 I invested in Lexington. 3 duplexes and a single family home (5 years later). I later switched from the Lexington market to Atlanta, GA (where I now live). Lexington has had some great upside through the past 5 years. I am glad I moved ahead with Lexington as my familiarity with Louisville was pretty much 0. I know a lot more now than I did then. I say the better market is the one you can understand the fastest and get to the easiest. If you know nothing about both markets I can tell you traveling into Louisville is typically cheaper and easier, but Lexington neighborhoods for me were a safer bet overall. 

I am considering a 1031 exchange of two duplexes - owned in a partnership LLC by my husband and myself (in Kentucky) - into a single small multi-family investment property in Georgia. The Partnership files its own taxes with an EIN and does not pass through to our personal taxes. Is it possible to deed, or transfer, the properties held by the partnership LLC into our personal names and subsequently 1031 exchange into a property in our personal names in Georgia after the deed transfer? Is there a seasoning period in which the property must be held in the personal names before a 1031 exchange can occur (assuming this is possible)? Is there another way to do this that I might be missing or am I out of luck if I wish to eliminate the Partnership LLC all together and also avoid capital gains tax into a new property? Thanks for all of the feedback!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $1,199,000
Cash invested: $300,000

Premium, central Atlanta location in a modernized Duplex as a House Hack. My family and I live in the 3 bedrooms 3 bathrooms owner's unit that is 2500 square feet. The adjacent apartment is a 1 bedroom 1 bathroom furnished mid term unit rented to business and film professionals at $2800-$3600 per month. This pays around half of the mortgage and allows my family to live in a neighborhood with fantastic schools and walkability - an area that would normally be out of budget :)

What made you interested in investing in this type of deal?

Fully renovated and modernized property in one of the most coveted areas of Atlanta - Historic Midtown. Walkability and quality of life are above average for the area. Premium location attracts premium mid term tenants who want to experience being in the center of the city in a quiet and peaceful environment.

How did you find this deal and how did you negotiate it?

On the MLS. Had recently been reduced 150K in price and my husband and I happened to be the first ones into the property after the price reduction. Offered full price as we knew we would make it work for our families needs with the attached apartment paying half of the mortgage cost.

How did you finance this deal?

30 yr conventional loan @ 6.25% interest. 25% down payment still needed due to our debt to income ratio and portfolio of other properties owned.

How did you add value to the deal?

Unit next door was already furnished, but we modernized some of the furnishings and updated all of the linens + accessorized the unit with high end art and decor to make sure it would rent out at a premium rate. Lighting was all updated to modern and unique fixtures to draw extra attention as well. Connect with leasing agents involved in the industries we'd like to rent to - such as film and business professionals.

What was the outcome?

We are able to rent the 1 bedroom on a mid term basis for the same rental income as we would renting it out on a short term basis. Less turnover, less cleaning to be done, less damages with longer term high quality guests.

Lessons learned? Challenges?

Film industry has had some hiccups and we've had to pivot for different clientele lately. Living next door to short term tenants in a house hack vs long term tenants in a house hack requires some unique communication skills and expectations as a landlord and owner occupant. Work closely with our neighbors to be sure they're happy with our guest choices and they are not being disturbed.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a real estate agent and negotiate my own deals. This allows me to add a buffer in the purchase and have a modest budget to update properties upon purchase by using my commission from the sale. This can make a deal work and give me a little financial edge that other investors may not have to make a deal work financially.

@Yinka Taiwo - I purchased a duplex in 30324 - Midtown Atlanta, Fulton County. There are several duplexes in the area, but they rarely go for sale. A 4 bed / 2 bath duplex just sold for 650K on my street - needed to be fully updated. Each side rents at market rate for around 2K-2.2K each for a 2 bed / 1 bath unit with the updates. Keep in mind when running numbers for Atlanta city that property taxes are close to 2% of the purchase price - even with homestead exemption. House hacking in multi-family in this area typically means reducing costs - but not eliminating the cost all together. Especially as loan interest rates continue to rise by the week. Message me directly if you'd like more info! 

Welcome Nickel! I have been house hacking in a duplex in Atlanta for about a year now. It's been a wonderful experience so far and I'm happy to share resources. I rented out both sides for the first year I bought it because I was living out of state at the time - wish I would have been able to take advantage of the FHA 3.5% down loan options at purchase! Message me if you have any questions - happy to help any way I can.

I have had an STR in Ellijay, GA for about a year. The pandemic brought an influx of buyers to the area and the number of new STR owners has doubled in the last 1-2 years - check out Airdna.co to see the growth spike. Things are becoming over saturated by the day. There is still enough wiggle room to do better than LTRs - but bookings have slowed down due to so many rental options.

Jan-May 2022 has been slower than 2021 was. Summer / Fall / Holidays are more of the peak time to visit the area. The metrics for occupancy / income from 2020-21 are not going to be comparable to what's going on now in the area in my opinion. For new STR owners it's going to be difficult to get going with more competition - but not impossible. Hotel / Motel taxes are rising beginning July 2022 for Gilmer county. Not sure about Fannin county. Message me if you'd like some additional details / Realtor contacts / support and cleaner contacts up there who can get you started.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $475,000
Cash invested: $79,000

Short Term Rental in the Blue Ridge Mountains of north Georgia. 4 beds / 3 baths.

What made you interested in investing in this type of deal?

Vacation community with easy access, views, amenities, popular tourist location.

How did you find this deal and how did you negotiate it?

MLS with a realtor. Multiple offers, was the backup offer.

How did you finance this deal?

Conventional loan

How did you add value to the deal?

updated furnishings and light finishes, professional photos. Found fantastic cleaners and STR owners in the area

What was the outcome?

Rents well & gets great reviews on STR 3rd party sites

Lessons learned? Challenges?

Cleaners are everything for an STR that is self managed. Find people you trust! have backup plans for when major items break.

Agreed regarding broken hot water + winter = emergency! 

I think it's safe to say no one is perfect - I am certainly not a perfect property owner. I didn't write the agreement I signed with the PM - but I do expect them to uphold what they say they are going to do in their own agreement. 

I appreciate your perspective @Peter Tverdov - especially from a property manager -  I was hoping to hear from someone like yourself. 

Part of why I ask questions here on BP is so I don't blow a small item up into something it's not. As a small landlord, every penny tends to hurt, but my goal is to always do the right thing. 

Thanks for everyone's input. I have a good direction on how I'd like to move forward. 

@Michael Plante the agreement between myself and the PM states that anything over $250 should include me in approval before the work is completed. I am always available for my PM's to make decisions on repairs. This was complete lack of communication inside their company and to me as the client they serve.