All Forum Posts by: David Lyons

Hello, looking for local banks that lend on commercial Real Estate in Greater Atlanta area.  What recommendations do you have?

 @Trent Reeve I look in about 20-30 miles north of Atlanta.   Though it takes putting together a creative deal where you can create/extract value that most do not see.   This is why I like furnished rentals.   Also, for example, identifying a single family that you can make two Airbnb units out of.  It's not typical 3/2, put in your average tenant on a long-term lease type deals.

 Hey Michael.  I would not recommend my designer.   I pulled off the project, but it was significantly delayed, obligations not fulfilled and I had to finish it myself.

I funded my first property in a very unconventional way - liquidated my 401k (from prior employer) to put $30k towards the property and had cash for the other $15 to get my 20% down payment + renovation costs.  This worked out well, but, in hindsight, I probably wouldn't financed with a 5% down conventional loan.

My advice would be to house-hack your first deal - live in part of the house and rent out another part - specifically with Airbnb, which is easier than most think.  

My personal strategy has been to hold in my personal name starting out - better interest rates and less friction to get started. Make sure you're covered with good insurance and you can transfer properties to an LLC or Trust later down the line once you have more equity and cash-flow built up. Essentially, focus on growing first, not figuring out the 'perfect' set-up.

I highly recommend the STR house-hack strategy or more of a mid-term (2-12 week stays) could work nicely as well. I do this in my current primary renting out two bedrooms and it covers PITI + $300 (but would be less at current rates and prices).

Know your must-have's in the deal. For me this is usually things that facilitate the STR strategy including sufficient parking, no HOA, and favorable or no STR regulations. Then be willing to concede on the nice-to-have's.

Hey @Luis Ramirez - this is a fantastic strategy.   Primary residence means it is the address on your license, for tax filing, where you receive mail, etc.  It should also be convenient to your location of employment.   And that you occupy it for the majority of the year.

There is no rule that you can't Airbnb it for periods of time.  There are also ways you can segment off part of the house and list the rest on Airbnb, even while you are living there.

@Jacob Claxton I love your thinking and strategy. The path of least resistance and highest return for you may be to operate the 2nd unit as a short-term rental unit.  The benefits to this are i) Don't need to deal with rezoning, ii) Don't need to deal with long-term tenants and iii) Better cash-flow.

I did something very similar at my property in Lawrenceville, Ga.  Added a kitchen to the basement and rent it as a mid-term rental in addition to the upstairs unit.  

Does it having plumbing and electricity in place for a second kitchen?  

Hey @Logan French I grew up on the South Shore of Boston and living outside Atlanta now!   I would recommend a variation of a house-hack in the greater Boston area - I personally like what I call the "Airbnb House-Hack".  There are many variations of doing this that don't necessarily involve sharing a common entrance.  This can offset your cost of living to the tune of $2 - $4k a month.

That being said, if you've thought about and crossed off house-hacking as an option, Atlanta is a great market.  Specifically, furnished mid-term rentals are a great recession-resistant way to generate cash-flow in this market.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $900,000
Cash invested: $135,000

The cash flow and equity from my other two house-hacks allowed me to buy this 5bed/5bath in the Great Smoky Mountains. It's 5-10 mins from downtown Gatlinburg, has a movie theatre and a hot tub. The interior was green and had old pictures when I bought it - hired a designer to make it modern and stand out!

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

Ability to purchase with a 10% down vacation home loan allowed me to juice up my cash-on-cash returns, depreciation and principal pay-down.

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

Worked with the Short Term Shop - my agent Derek Tellier found this on the MLS - it had been sitting there for 60 days in a red hot market due to poor listing presentation and being cosmetically outdated. Put in an offer $25k under list with no competition. Negotiated some sell credits to closing costs based on inspection report.

How did you finance this deal?

10% down vacation home loan through Parker Borofsky.

How did you add value to the deal?

Cosmetic rehab throughout - new paint, decorations, kitchenware, furniture, etc.

What was the outcome?

It has been a wild ride in the short term rental market, but I'm hoping to level out with $2,000 a month in cash flow - some months have been better, some have been worse.

Lessons learned? Challenges?

Balance having a clear scope of work with trusting in your designer.

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

Movement Mortgage was a great mortage lender - I worked with Rob who was fantastic.
Derek Tellier was my agent and knows his way around the STR markets - though I believe he is in the Gulf Shores now.