All Forum Posts by: Nick Fitzpatrick

@Jingru Sui the projects we are looking at are both- however there isn't a delineation between the two for the incentive. Hoping to speak with someone like @Account Closed who has set up the fund and understands the process. This is still new and brokers, lenders and CPAs still have uncertainty. 

I'm interested in chatting with those investing in Federal Opportunity Zones in Atlanta. 

@Tyler Hampton Your questions on liability insurance and an llc are valid but I think you have a few other concerns before then. 

I can't comment your numbers without seeing them, but I'll say this: My suggestion is to actually see that particular neighborhood in person.

I was there this afternoon. I'm around there a few times a week and I'm personally trying to get a property in the next neighborhood over. There is a lot going on around the neighborhood and more work in progress, but there is also a back story. If your margins are as thin as you say, I suggest you dig deeper. 

@Davis Culpepper Those are two wildly different markets with different plays. Ignore the noise and figure out what is best for you. What's an investment you can afford, can manage, has your desired return and is something you want to put your name on?

If you asked 100 successful real estate investors what their key to success was you would get 100 different responses. Don't get caught in the noise trying to chase the golden ticket. 

@Darren Koenenn My wife and I have toyed with the idea of a vacation home in Florida, St Pete to be exact. Probably pretty similar to you, the idea was to do weekly/monthly rentals and then have a place to stay when we are down there (4-6 weekends a year and most of December) while making a little cash. I spoke with a couple of buddies who have something similar in a few states and they all advised me to think deeper on the same few topics. None were deal breakers but their insight was helpful compared to my background in workforce investment homes. 

Here is what they told me:

1. You have to get an awesome house to get top dollar per week. Pinching pennies on the purchase could cost money down the line.

1. Taxes. Obvious, but has a seat at the discussion table.

2. Upkeep Costs. To get top dollar and stay booked, one guy said he paints the house - interior and exterior- yearly to keep it in excellent shape (Outer Banks)

3.Management fees. All said the managers provided a great service, but they certainly charged for that service. Obvious again but worth running numbers on. 

4. I knew the property insurance would be expensive but after researching, I'll definitely get very strong liability insurance. Nothing like 10 drunk people in your house to keep you up at night. 

5. The craziest and biggest risk that I heard is the local municipalities ability to outlaw STR. I'm not sure why but one friend said the city banned STR and his cash cow became just a decent long term rental. You mention and HOA so that's an added layer of risk for you.

I think I ended up talking with 4 or 5 friends with homes in FL, SC and NC and they all said it was still a good venture in the end. Two of them had homes with STR revenue over $200k a year! Good luck to you on the place!

Hi @David Holcombe - I like my brokerage. I've been here 5 years and we have both commercial and residential agents. We're up to about 135 total agents and $500m in yearly sales. Plenty of part-time agents (or non producing...) It's small enough you know most people but large enough to have name recognition around town. I'm not sure where in Atlanta you are but we have offices in Decatur, Midtown, East Atlanta and Tucker. 

Happy to discuss further. 

@Patrick Conlon The best gift you can give him is the Atlanta Business Chronicle. Do the digital and print package. It’s pretty reasonably priced and most brokers read it.

To be honest, I view Vine City and the Bluff more as speculation than investing. Prices have risen significantly due to this speculation and I don't see a reasonable return given the risk associated. I think the appreciation is spurred by the hope that large tracts of land will be assembled by a developer or institution. I had one group call me and ask if I had any doors close to Northside Dr. They wanted to buy up homes and hope The Blank Foundation would buy them up. 

@Tom Hargis It depends on if your homes are in the actual "The Villages" or in the surrounding area. Both are viable options but are wildly different plays!

Hi Nisa,

I'll give you a bit of unsolicited feedback. I'm very familar with that intersection and looked up your specific lot and that price point or construction design isn't feasible. 

1. The Greystone development has frontage on Clairmont Rd. Higher density development is more attractive and attainable now on major roads. You are correct that this parcel will require re-zoning but that is unlikely given the overall composition of the neighborhood and the overall density there. 

2. The Comparable property is 69,969 sqft and has 21 townhomes on it. Your lot is 26,136 sq ft. There are a hundred other variables but let's assume you could get the same amount of pads for the acreage. That gives you 7 pads. Again, given the nature of the neighborhood, that is pushing it on the high side. 

3. 7 pads at a $1m valuation equates to $142k per pad. Builders want to see a land cost around or under 20% of the sales price. That would require a sales price of $715k for the project to be considered, which is a lot higher than your comps and the other comps in the neighborhood. 

4. The market has noted the two other attempts to sell at a $270k price point. These "hidden gems" get snatched up in situations like those. 

5. In addition to just the size of the land, there are a ton of other variables that go into pricing in-fill development. Your parcel (a) has a ton of trees which all require expensive permitting and removal, (b) will need complete re-zoning, and (c) substantial infrastructure upgrades. 

I don't intend this to be dismissive. I spend a good bit of my work week actively driving potential townhome development sites and it takes a lot to find just one viable project. Then the fun begins in actually getting it negotiated and closed.