All Forum Posts by: Gordon Vaughn

The beltline is a lot of things, but the main concept is that it consists of a 22 mile railroad corridor that circles downtown Atlanta and provides a great travel option for in-town commuters. Within much of the already constructed belt there are parks, retail, restaurants, single and multi family dwellings, and various other amenities.  I'm not sure how much of the beltline is complete, but last I heard it was a little over 45%. This number may not be accurate.

Very well put Anna. I used to do a lot of business in these buzz areas like West End, but I got tired of all the external issues, equity skimming, scam artists, false inflation, and false prophets talking about how rich they will become by investing in these areas. I've seen too many investors get sucked into these places that take incredible savvy to navigate, & their investment career is over. With reference to the SW Beltine, I agree with both you and with John when it comes to speculations, but i'm still seeing no value movement throughout the SW side of the belt. I have also heard what was going on in the Pittsburg area stemming from the stadium plans and developments, which seems to be one of the more viable high risk areas to take advantage of as students look for more affordable housing. But even then these markets are very volatile to small shifts and are usually the first to suffer in major shifts, so there's still a high risk even for those homes. I hear a lot of talk about how wonderful and how easy the SW belt is at making big fortunes with huge cash flows and multiplying profits, but never hear about the realities of investing here and what the market is actually doing "today", which is a far cry from what I'm reading about. I thought it fair to let people know to beware of this area, know the areas that aren't moving, do as much research as you can, and to make sure beltline trends are viable & backed by strong facts and numbers before considering the purchase. That's it. I'm not a disbeliever of the beltline which has done a lot of wonderful things for nearby communities. But not all beltline neighborhoods are good buys just because the beltline has or will be coming through.  

And to Rick Baggenstoss:: I'm sure you're a really cool dude and everyone has different opinions of the market. But I think you misunderstood exactly what and why I was warning investors of this area. For every success story you can tell in this area I can tell 20 nightmares.  If you're going to challenge my opinion as ignorant and a joke using speculations, forecasts and predictions, you should be better prepared next time. You're not talking to a speculator or a sophomore, and I would be happy to challenge you in any discussion, on any local real estate market topic, in any forum, anytime. 

I appreciate your comments Rick, I really do. These clients are not my personal clients, but investors that I know and have met throughout the course of my career. If you like to gamble you can go down into these SW areas and sit at the big tables, but I don't bring my investors down there because it's too high risk. I haven't missed the boat on anything, but I have seen a lot of boats sink in these areas and I have seen just how they have sunk. As an investor agent I've sold over 50 Decatur homes in 2003-2004 to buy & hold investors, and sold almost as many in SW and West End Atlanta from 2003-2005. And we all know what happened in these areas from 2008-2102. 50%-70% avg depreciation by 2012. There have been some good areas of Decatur to invest over the past 15 years and there still is, but I wasn't talking about Decatur nor was I referring to East Atlanta, Kirkwood, Reynoldstown, or these other areas that were already popular developments before the beltline was even a conversation. 

The only one in this conversation who is refuting the dangers of crime in East Lake is you. Anyone who currently lives in these areas knows this to be common knowledge. I can throw a rock from anywhere in East Lake and hit a home owner who has been burglarized, had their car broken into, or has heard gun shots from their bedroom window. The areas of East Lake closest to East Atlanta show appreciation that is real. For the rest, a good hard wind of economic stress can easily blow the progress back to 2010. 

Smyrna on the other hand, for example, saw a total of just 10%-15% depreciation by the time the market bottomed. So which of these areas would you consider to be a more solid area to invest? I just wholesaled a home that I secured through direct marketing in Marietta 30067, Wheeler HS district, just a couple of miles from where the new Braves stadium is being constructed, to one of my investors for a $15K commission. My investor immediately relisted and the home is now under contract for $25K over what he purchased it from me. All without putting a dime into rehab, skimming equity, or batting an eye. I can do this 4 times a year in this area, in any transaction combination, with little time and effort, and make more money in one year than any single investment home on the SW beltline will yield in 5 years. The numbers don't lie, and SW Atlanta beltline area will continue to be volatile until something major happens. And it will take a lot more than just a couple of new businesses and a beltline to do it. I believe my risk assessment of the SW Beltline areas was a fair assessment. And for those investors out there that don't have the kind of money to throw around on high risk investments should really think twice about trying to build their wealth in these areas. 

I actually agree with everything you said and I think I understand how you're gauging market values. Average market values 09/10 were not $40K because the market was dominated by distressed sales btw $10K-$20K, while I'm looking at total cost to top market value. 

$40K was the full market value assessment back in 09/10 based on sparse area retail activity which helped determine ARV's in neighboring areas that were seeing no retail activity. I completed over 3,000 BPO's from 2009-2011 for many national banks, lenders, and hedge funders, and most of them used $40K as their standard full-retail assessment in order to determine distressed list prices. Not an exact science but a "best guess" as all value assessments are.

You seem to have found a way to make it work, so ride it until you find better! 

All great points and I agree with Michaela on this last post. East Lake is still too dangerous and values are inflated. But because you purchased your home for $10K and it has a market value of $40K today doesn't mean that your home quadrupled in value. These areas carried full market value of $40K back in 2009-2010 which is why you could find distressed deals for $10K-$15K. Put $10K on a rental rehab and $20K on a retail rehab & you're into the deal $20K-$30K, so one would expect to see at least a little equitable margin for your investment. There's been a few current sales prices in the $50's but you still don't see any market indicators, just a few retail sales sliding into the value mix. These markets are still dominated by depression. And as the ladies said, tenant problems, owners not selling, crime, bring your pit & pistol, these are the things you have to contend with as well as the external factors holding values down. Even if you could make the argument that the market went from $40K to $50K that's not an impressive 6-year appreciation rate. It will take strong movements and a lot of "what if's" for the stars to align in these areas, which make them high risk low results areas to invest and the reason why I wrote this post. There are too many better areas to invest that are not as risky. 

Show me Michaela, and I'll take it all back.

I have read a lot of hype about the Atlanta Beltline over the past few years here in Metro Atlanta. Usually a strong market buzz precipitates it's realization as people jump on the bandwagon and fuel the market dynamic. Unfortunately not the case with the beltline homes. Small levels of appreciation have been seen in areas where the beltline has been completed, but these are the areas that carried strength in values before the beltline was developed. Most of the distressed areas where the beltline is projected to be built still show no signs of appreciation, even in the midst of investor activity in the area. I'm not saying that all the good stuff we're hearing about in some of these areas will never happen, but there are currently no viable trends in most of these areas that would substantiate all the hype. The city still faces big funding and planning obstacles that could prolong the remaining development for many years to come. Many local investors that I have talked with, whom have purchased next to the beltline in SW Atlanta still have the same problems and issues with crime, vacancy rates, and stagnant values, and many of those investors are regretting their purchases. If investing along the beltline is your gig, beware of the hype and do as much research as you can. Investigate the future development of these areas, area crime rates, and value changes. Many agents and bird dogs will show you 1 or 2 strong comps in a particular area, but hardly a trend when there's a sea of low sales prices in the area to which you may or may not be seeing. Make sure that trends around the beltline are viable ones backed by strong facts and numbers before considering a purchase.   

Legal Zoom or another online platform is definitely your best bet in finding the LLC docs you need. Georgia LLC filing is $125.00 annually. It's easy to do, especially if you are the sole and only owner/manager of the company. You'll also save $100-$200 by not hiring someone to do it. You can also add and/or modify your LLC to include or "umbrella" up to 11 different companies with different names and different members if you wish, all under your 1 original LLC. The best way to do it is have one company for acquisitions, one for sales, one for construction/rehabbing, etc. This way if any legal problems arise only 1 of your entities can be held liable and not your entire company

Hello Gina. I am a real estate agent and investor of 13 years here in Metro Atlanta. My experience working with high volume investment firms over the last 4 years has kept me on the pulse of every market in the Atlanta metro area. I would be happy to assist you in your real estate goals, and answer any questions you may have about the area market.