All Forum Posts by: John Ford

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Yeah, I don't think anyone will have much trouble finding prospective tenants for decent quality houses close to good schools and strong job centers. The trick is being able to charge high enough rents to make the numbers work. With the high property taxes in Texas and high housing prices everywhere, I don't see how people are making buy and hold deals work here right now. I know a lot of "investors" are taking it on the chin with negative cashflow deals on the hopes they'll be able hold for a few years and capture massive equity gains when they sell in a few years. I wish them luck but it reminds me of 2006, to be honest.

Isn't Sugar Land just a suburb of Houston? Rather than comparing it to "Atlanta", why not compare it to a comparable Atlanta suburb? I think something like Cumming or Duluth might be comparable. For me, it's no question, go with Georgia. I'm putting my money where my mouth is and moving back to the Atlanta area from Texas later this month. Even before deciding to move back, I was looking for my next rental...in GA.

There's a lot to unpack here so I'll only hit on a couple of points. Glossing over the details, I think your plan is sound: Buy a primary residence for your folks (it's their money, after all), buy something to house-hack, and then start acquiring properties. On the other hand, real estate is expensive right now and the timing isn't great. I'm not saying there's gonna be a crash or anything, just that relative to incomes and other metrics, real estate is historically expensive right now and thus, it might not be the best time to buy. But who knows, maybe hyper-inflation is right around the corner and it's our last chance to buy. I'm just playing the odds.

That said, if you execute your plan diligently and don't try to do everything at once, you are effectively dollar-cost-averaging into the market. Buy your folks' place. That will probably take a few months. Then when that transaction is complete, find your house-hack which I would expect to take a bit longer. By then it will be about a year from now. The craziness of the last lear will be in the rear-view and the dust will be settling from all the money that's been thrown around in the response and it will be a good time to evaluate the market for potential long-term investing. (Not going to speculate where the market might be then, since my crystal ball is broken).

The last thing I'll say is, if you read the book, then you might remember the part where the author says "plant as many trees as you can water". I'd change that to, "plant as many trees as you can water in a draught". Don't overextend yourself. If your parents are going out of the country for half the year, do they still have income? Can your income cover the PITI on 2, 3, 4+ houses? Or if there's a replay of 2020/21 and tenants stop paying rent and you can't get them out, are you going to need a bailout? If not, you might want to earmark a big chunk of that 400k for cash reserves. Just some things to think about. Best of luck to you.

Is this in the "West End" neighborhood...or is it generically "towards the western quadrant of Atlanta?" If it's in West End proper, then I'd say anything you can pick up for $150k, jump on it with both feet. There are so many project slated for West End, including redevelopment of Mall West End, expansion of Lee + White, redevelopment of the MARTA station, etc... When it comes to appreciation plays, my opinion is that it ain't speculation if it's almost a sure thing. 

If the property is just on the "west side of town", then...it depends. Like Taylor said, first make sure the numbers work (spitballing 10% of rent for each of maintenance, vacancy, and capex). As a further buffer, I'd add in another 10% expense item for property management. Since this is your first property, you might decide to hire professional management if you decide you hate being a landlord after all or that the property only attracts tenants you'd rather not deal with. And if you do go that route, the numbers will still need to work.

Look at the southwest and/or west beltline neighborhoods. Something between I-20 and the Westside Park/Bellwood Quarry will likely be your best bet for a speculation play. The neighborhoods are quite livable by an owner-occupant, but not nice enough that people are actually *looking* to live there yet. If I was making speculative investments in Atlanta right now, this is where I'd be looking. With the surrounding investment going on in both infrastructure and commercial projects, it's just a matter of time. The only real question is...how much time? Might be 5 years, might be 15. But as long as it has positive cash-flow in the meantime, does it really matter, especially if it checks the other boxes you need for your own situation like transportation, etc...

I'm bullish on the Southwest Beltline, in general. On condos, not so much. But I know many people do great with condos so maybe that's just me. I also got into REI by buying my residence in an area I expected to turn around (O4W). It took it 11 years but boy, did it ever turn?! And I don't even care that it took 11 years because the location was abso-freaking-lutely perfect for me while I lived there. I hated leaving. But once the neighborhood took off, I bought a new residence, converted the O4W property to a rental, refinanced it and used the equity from appreciation to do more deals in the Southwest. I see no reason you can't do something similar. Best of luck to you.

Isn't that where the new Westside Reservoir Park is going to be? I think one day that area will be amazing and anyone who buys there early will look like a genius. The problem for me is how far away is "one day"? My gut says it's going to take longer than 10 years. But as long as it cashflows today, I think you'd see huge equity gains once the neighborhood eventually turns.

I have no personal experience with College Park but it doesn't have the best reputation. But I do hear they just opened their first new Apartment complex since 1969 so there is that! (http://atlanta.curbed.com/2016/12/21/14040952/coll...) 

I lived for 13 years in Old fourth Ward and Midtown and now live in Westview. The morning traffic headed south from anywhere south of the Grady Curve (Freedom Pkwy, effectively) is nothing compared to the stuff headed north. I don't know much about heading back north in the evening, but it's bound to be about 10 times better than heading south from the north like most "intown" commuters do. I agree with the idea of renting in O4W, midtown, Inman Park, Poncey Highlands, or Grant park, all of which would put you in great proximity to the southbound freeways. Then look at the Southwest Beltline neighborhoods to buy. We'd love to have you, are closer to college park, and there are tons purchase of deals over here, unlike the neighborhoods listed above.

@Jack B. There are pros and cons to everything. To me, the "move out" method is appealing because someone can qualify for low/no-money down financing for the new house vs needing at least 20-30% down to buy an investment property. Seems to me that financing is where the wheels fall off for most would-be investors. And simply moving out and renting simplifies that tremendously. There are a lot of other pros and cons, but that's a huge plus and outweighs a lot of cons.