All Forum Posts by: Patrick Young

I'm looking for something like AirDNA but for properties/areas of town that will let me analyze what areas/neighborhoods in town historically hold their value and recover their value the quickest after a downturn. Is there anything that pulls data from FMLS? Anyway to get access to that data?

I did not factor in vacancy - which I should do. Here are the numbers I used.

Cannot STR it but will be able to rent yearly.

Hi All,

I purchased a loft along the belt line in Atlanta in May 2018 for $315,000. I put $165k down and currently owe $115k on the loan @ 4.75%. I will be leaving Atlanta with my fiance for 2 years while she completes her fellowship. We *may* move back to Atlanta so I'd like to at least rent it for those two years in case we move back. If we don't move back, or choose to not live there, I'd consider renting it out indefinitely.

I've estimated my cash on cash return to be about 4-6% depending on the rent I can command on the property ($1800-$2100) and about a $500-$800 monthly cash flow.

I did a 35 year projection (3% price increase across the board for all costs) and at the end only end up with about 1.5 million in profit while a mutual fund @ 7% after tax would return almost double that amount.

My question is that after those 2 years it seems like I would be much better off selling the property and investing that money elsewhere to earn a higher return in the market (7-10%). Do I just have too much dead money (and cannot rent it for the premium I need) in it to earn a solid return?

What are the pros and cons and why would someone choose to accept a lower rate of return when their money will yield more elsewhere?

 I hear you on the mismanaged. I'm currently on the board of my building and we're working to undo years of poor management now. I'm aware of rental restrictions, etc. that go with many of these buildings. My current loft has a 25% cap and a 30 unit waiting list, so finding with the ability to rent immediately will be pretty tough I understand. Ideally I'd like to find a duplex but they seem impossible to find for the price I'd want.

Can you explain the cap rate, etc. I'll do some googling in meantime (edit: found a couple articles, not sure I understand the difference between cap rate and the cash on cash, seem to be the same number). I guess I'd want to have an exit plan at a certain level of appreciation or model different scenarios in that regard? I'd like to make a few excel sheets that will do all of this for me, but I'm just getting into finance here.

Hey guys - I'm starting to get my feet wet in my search for a condo in downtown Atlanta area. Looking in the low 100s and plan to put 20% down.

I'm trying to understand everything that get's factored into ROI, the following assumes $100k purchase price.

• Downpayment - $20,000
• Interest on loan - $5-6k/year need to get amortization calculator
• Taxes/Insurance - $2000/year
• HOA $3600/year
• Maintenance $1000/year

About $12k/year to hold the property - rent in this area doesn't seem to be much more than $1200 optimistically - so looking at making $2600 on $20,000 or around 12%, then subtract taxes off that. Is my math/logic correct? What am I missing? Do I need to factor in opportunity costs for the $20,000 downpayment that I'm no longer investing elsewhere? How do you account for the $/month which goes towards the principle - does this decrease your ROI each month as you have more $ in the property? What is considered a good ROI for a property of this kind?

I think someone who wants to rent and is lower on the list would benefit by being able to purchase a permit from someone at the top of the list. Someone who is moving out of state suddenly, new job, lost job, etc. I get there are hardship provisions in the hoa documents but those are subject to approval.

Why is it a net negative for the permanent residents to profit off the list?

"Adding a life to how long a unit can be rented, then it gets kicked back into the queue will decrease the attractiveness of your community to buyers, which will cause downward pressure on prices."

I think that assumes that a prospective buyer would like to rent out their unit indefinitely. There are other shorter term options which would be attractive such as the ability to rent this year or for the next 5 years without waiting.

If I'd like to buy and rent my unit today but would have to wait 3+ years, then that unit is less valuable to me than one I can purchase today and buy my way to the top and rent immediately.

This is true but those people who originally intended to use it as a rental would already been on the list. Therefor anyone who now wants to profit from the rental spot would be last in line..

Do any communities have limits on how long an owner can rent out their unit? If this list churn was reasonable this wouldn't be so much of an issue. 

At our last meeting our association rep let us know that we are well below those thresholds at 25%.

You are suggesting I rent out a unit and then wait for my unit to the top of the list to rent? (which would be years).

We have a 25% rental cap which is the issue with so many people wanting to rent their units out. It may be easier to up the cap to 50% or something but I'm not sure what kinds of restrictions and limitations there are for FHA, etc. It certainly would be opposed by many. Supermajority votes aren't ever going to happen realistically.

It seems we've arbitrarily restricted the supplier of permits through this 25% cap. I'm also struggling to understand the first come first serve on these permits. Someone can get a hold of one and hold it forever, some may want one and never get to the top. I'm wondering if the association can collect a fee for the permit and or limit the years it can be rented? They're hot commodities; its interesting to think about.