All Forum Posts by: Colin G.

Welcome I'm a relatively new remote investor as well. My partner and I live in Manhattan and own in Atlanta and Roswell - a quadplex and a condo. Our goals sound pretty similar also. We decided to forego personal residential ownership in the city (mostly because the cost is prohibitive) and opted for investment real estate in GA. It sounds like you've got a good thing going with your loft. Continued success to you. Colin Gillens Manager, White & Associates Property Group, LLC

@Robert Peace welcome and congratulations.

I'm relatively new to the forums myself but long before I jumped in, I found the content here both useful and actionable - I'm sure you will benefit as well.

I'm investing now in Atlanta, GA (where I went to college) but I'm also interested in finding some opportunities in the DFW area - I was raised in Fort Worth, I still have family there and with the numbers I've seen there, I have confidence that there are deals available. My partner and I are buy-and-hold investors as well.

Have you thought much about your strategy and the types of properties you'll target? We're partial to MFR.

I appreciate all the tips and encouragement.

@Siye Baker The language in 1 of the 4 existing leases does read to allow billing back to the tenant for the cost of any utilities paid by the landlord on behalf of the tenant. DISCLAIMER: I'm not a lawyer, but I imagine this language could be used to justify billing back some pro-rata share of the water bill back to this particular tenant - even with the knowledge that the tenant has never previously been charged back for water since there is a "No Waiver" provision. I definitely wouldn't do that though. I've just been up front with the current residents that, looking at the market, it seems that not a lot of property owners in the area are covering water anymore and that I plan to join that shift and bill them for their use.

@Rick Baggenstoss Given the high original price on the property, it was actually the second lot that even made us stop and run the numbers to figure out what we make this a deal for us. When we had our number - based on the purported income/expenses on the place (which it turned out during our due diligence period were much rosier than reality) - we just threw it out there. We're looking at the lot as chickens we might be able to count later.

@Jimmy Moncrief We actually targeted this place because we knew it had been listed for a very long time (more than a year and a half if I remember correctly) with no movement and we were just hoping the seller was ready to finally come down. It doesn't seem like there's much turnover in the MFRs in this area but when there is, we understand they get snatched up pretty quickly so in spite of the original price this one caught our eye simply because over time it just kept popping up until we decided to run some numbers and just swing for the fences (compared to asking) with our offer.

@Account Closed

@Brandon Hicks Getting your cash out of a deal as soon as you can sounds like great tip - quickly free up your money to work for you on another deal. I'm still getting a bit of an education on this stuff, but that has primarily seemed like the foundation of the fix/flip type investors to me (not to say buy-and-hold folks don't care about how much money they tie up).

@Ali Boone The cash flow is definitely there. I would love for some more experienced investors to have a look at our deal though. I've just posted the details here:

Midtown Atlanta Multi - How Did We Do?

Hello BP

I would love for some more experienced REIs to have a look at the details of a recent purchase my partner and I just completed and give us your thoughts on how you think we did.

THE PROPERTY

The property is a 2 story 4-unit brick multifamily with a basement in Midtown Atlanta. The units each have identical floor plans with 856 sq ft of living space and screened in patios. The property includes a fenced-in back yard and an adjacent parking lot for off-street parking partitioned for 9 cars. The property is a double-lot on a street of single-lot SFRs and MFRs. This provides for the potential to develop what is currently a parking lot into a second income property (long-term goal).

THE PURCHASE

We paid $119k (25% down on a 30yr fixed @ 4.75%) on a purchase price of $476k. This was negotiated down from the $565k asking (it was flat out over priced).

The seller covered all closing costs, reimbursed all of our prepaid items (appraisal, home inspection, land survey, etc.), and covered some of our first year expenses (insurance, termite re-treatment and warranty).

THE INCOME - $3820/month

3/4 units is currently renting at $910. The 4th is at $940.

4/9 of the parking spaces are provided for the building tenants to park 1 vehicle each gratis.

3/9 parking spaces is currently rented at $50/month (charged quarterly) to a neighboring building's tenants who want off-street parking. The remaining 2 spaces are not currently rented.

THE EXPENSES - $3447.32/month

Mortgage - $1862.28/month

Utilities - $387.45/month - I'm starting to recoup water by billing back to the tenants with the new leases. This will reduce this figure by $200/month.

Taxes (City/County/Solid Waste) - $548.94/month

Insurance - $98.50/month

Other Expenses (Vacancy/Repairs/Maintenance/Services) - $550.15/month

BOTTOM LINE

What it looks like now is that before we even bring this property in line with the rest of the neighborhood and up to its full potential, we're already looking at a cash flow of $93.17 per unit per month. Our expectation based on increasing rents (the property is already below neighboring properties in the market) and billing water back to the tenants (something many other properties in the market already do) is that we can push that number to $208.17 per unit per month by this summer when 3/4 leases turn over and $230.67 per unit per month after.

CONCLUSION

I feel like the rules of thumb (50% and 1%) would have lead some investors to walk away from this listing so I'm curious to know how the community feels about it now that all the cards are on the table.

Thanks for the warm welcome folks.

@Ali Boone I guess you'd say that we're still learning the ropes - so I guess we haven't quite picked a focus exactly. Small multifamily properties have been the most attractive to us though because (1) the cost of entry isn't too high, (2) we don't have a ton of properties under our belts - so we still qualify for residential financing and (3) with low vacancy rates and/or delinquencies we don't have to worry too much about having to carry the debt service and expenses - even with 1 in 4 units vacant or late on rent, we're not blowing our cash flow. We inherited in Roswell (the condo) and we just purchased in Midtown near Piedmont Park. We'll probably target other areas through networking without too heavy of an emphasis on geography as long as we can be comfortable with what the due diligence tells us - but we're likely to stick in Atlanta for the time being since it's what we know and where our network seems to be growing out of. Oh, and Lateasha is awesome!

@Joe Fairless The 4-plex jumped out at us mostly because of the financing implications given the area we were looking in. Prices were/are pretty high in the area so when a true "deal" comes up (evaluating from an income perspective), a large part of it is tied to the rates - so from what we were seeing, commercial vs. residential financing was blowing too many up. We were originally looking at a 5-unit property in the same area, but commercial rates not only soured our margins on that potential deal, it also introduced a layer of uncertainty in ARMs that we were not comfortable with for our first purchase. We're not sworn off larger properties - in fact we're still very interested in them, we just didn't want to risk our first round of investment capital on what we were able to find at the time. When our 4-plex came up, things just took off from there.

Hello BP

My partner and I are new buy-and-hold investors in small multifamily properties in Atlanta. We recently purchased a 4-unit building with an adjacent 9-space parking lot in Midtown. We're self-managing the business from New York, NY - but pretty free to travel to Atlanta and actually make fairly regular trips there already.

After initially settling on a price with the seller, during our due diligence period, we negotiated further reductions to offset the cost of estimates for repair and maintenance punch list items that were discovered during the home inspection.

We're now ready to tackle those items and I'm looking for advice on an optimal approach. There are many reputable service providers available for the work we need done: plumbing, light electrical, landscaping and carpentry - but I'm always reading on BP and in real estate books about investors setting up their teams or networks to include contractors. Should I be vetting contractors for this work? Are these the sorts of jobs that would be put under a single umbrella of a general contractor? Do I just hire the standard local business service providers to complete this work?

What advice do you all have for me on the best investor's path to take here?

Regards,

Colin Gillens

Hello BP

My name is Colin Gillens. My partner of 7 years and I have gotten off the sidelines and are executing our real estate investment plan, so I thought I would take this opportunity to introduce us and our business. I'm a manager of our newly formed entity, White & Associates Property Group - a Georgia LLC.

We are Fort Worth, TX and Atlanta, GA natives now living in New York City (about 5 years). Though a Texan myself, I gained a strong affinity for Atlanta - the midtown area in particular - during my college years at Georgia Tech. My partner and I are a "house divided" as he graduated from the University of Georgia, but we stand united on our journey to learn what we need to and to act when appropriate to achieve our goals of financial security/independence for ourselves and our family through real estate investment.

Our current investment holdings now consist of an inherited condo that made us accidental landlords and at the same time spurred our already investment-curious minds into getting engaged in real estate investment and to that end, a newly purchased 4-unit apartment building - I'll post more about that separately.

We've listened to the BP podcasts and we've been catching up on a lot of the suggested reading material. Now we're excited to jump into the community through the forums to hear your stories, share our experiences and learn what we can to make us more effective real estate investors.

Regards,

Colin Gillens