All Forum Posts by: Steven Harris

Hi all, I've been away from the site doing lots of things including interviewing....mainly interviewing. But I've been keeping an eye out for tri's & quad's that just might be tenant occupied and have an available unit for me to be an owner-occupant and do the house-hack thing. I just saw two duplexes in Griffin, both tenant occupied on a month-to-month basis. The price was nice, below $250k.

So now I'm researching Griffin to see "what's the catch". Thought I'd drop in here and get your take on it, those of you familiar with the Griffin/Atlanta market. My hope is that the outlook on appreciation is strong and that investing now will be a timely, smart move.

Thanks for any insight you care to share🙏

@Steve Miklashevskiy, Mainly because I want a rental income generating property, not just a SFR. With my price point of no more than $280k, I've noticed a few quads for sale for less than $300k with tenants already in place. I'd buy it using an FHA 203k (most likely)with plans to update anything that's "quick & easy" to do, like new cabinets & counter tops or new washers/dryers without using up every cent of my cash on hand.

Paying 3-3.5% down on a duplex, tri or quad that could already have tenants in place while I live in one of the units, for me, is the best and smartest move for a first time home buyer and REI newbie🤷🏻‍♂️

@Steve Miklashevskiy, Mainly because I want a rental income generating property, not just a SFR. With my price point of no more than $280k, I've noticed a few quads for sale for less than $300k with tenants already in place. I'd buy it using an FHA 203k (most likely)with plans to update anything that's "quick & easy" to do, like new cabinets & counter tops or new washers/dryers without using up every cent of my cash on hand.

Paying 3-3.5% down on a duplex, tri or quad that could already have tenants in place while I live in one of the units, for me, is the best and smartest move for a first time home buyer and REI newbie🤷🏻‍♂️

@Mason Hickman, to quote my earlier post, "Is his asking price already factoring in the As-Is condition?"

As you know, sellers don't always consider the actual As-is condition when they try to sell their property. Seller could've simply decided to sell at $100k because he knows there are repairs needed, but he doesn't know the extent or cost of said repairs. Seller could've just thought up an asking price that covers the $85k left on the loan and wants at least a small profit of $15k.

This is why I asked if the price has already factored in *all* that needs to be done (As-is). Has the place been appraised and found to be worth $100k or more in its current condition? If it hasn't, then how does the buyer know if the place is currently only worth $80 or $90k. Buyer would be paying $10 or $20k over current market value while still needing to put money into the place.

These would be my concerns if I were @Joshua Stewart. This is why I also suggested he do his own research on recent sales and current asking prices of similar homes for sale in the neighborhood. What if newly rehabbed homes in this particular location with comparable features & size have an arv of $120k but this place is asking $100k & needs $20k in rehab? In this hypothetical, Joshua would at best be lucky to simply break even if he sold it after repairs. It's not impossible to sell a place at a price that's higher than its comps but it's risky and far more time consuming.

But Joshua is friends with the seller. Hopefully the asking price already reflects some number crunching on all necessary repairs in which case it would be a win-win.

Again, these are just my tiny $0.02🤷🏻‍♂️

@Laura Baugh Finley thanks for your experienced insight on the FHA loans. I came close to using one last year but I just had bad luck with Realtors seemed to think my budget wasn't worth any effort to negotiate for me. But I did hear from a few contractors about how much of a headache(reasons they didn't explain) it was to do work under the FHA rehab loans.

I'm pretty sure I must have been trying to use the streamlined one. I think if I go that route again I'll have even more reason to look for tenant occupied properties that need only simple cosmetic upgrades that can be done in 14 days or less and cost no more than $20k. Not just so I can use that particular loan but also because I don't want to "get my feet wet" with any properties that require months of rehab and 10's of thousands of dollars to get it done.

I plan to "chronicle" my journey and so I definitely will take you up on the offer to reach out with questions that I'll have.

Thanks very much Laura! 

@Philip Joseph, thanks for confirming that my instinctive reservations about Macon are mostly accurate. The last thing I want to do is make a move on a property that's in a market that barely sees any appreciation AND only generates small rents-no matter how brand new everything inside the house maybe.

I'm new to Atlanta. I moved here from SF just minutes before covid messed everything up. But it's the East Point and College Park areas that actually attracted me as potential places to dive into REI. Both of these cities are still "up and coming" and so with the right financing and a great crew, BRRRR or just buy, rehab, rent & hold for like 5 years (my original plan) could prove to be a smart & profitable strategy. That's my focus for now.

Thanks for your experienced insight Philip!

@Joshua Stewart, my tiny two cents may not be of any value but hey, here it is anyway😁

I would calculate how much repairs or renovations would cost -to include all materials, time & labor. I would then ask the seller if he'd sell me the place As-Is minus the cost of repairs.

Is his asking price already factoring in the As-Is condition? Have you checked comps in the area to gauge how much a nicely fixed up place like his could sell for in that neighborhood? If you have and you've seen that comps have sold easily and for substantially more than his asking price then maybe it would be worth your $100k, cost of materials and labor.

Otherwise, somehow I see it as you being too generous to offer to buy the place @$100k giving him a $15k profit. Your friend the seller's gamble is that he'll be able to sell the place for his asking price in As-Is condition. He might have to make concessions that factor in renovation costs. Since he's your friend, why not make him an offer that factors in all you'll spend in labor and materials to renovate? This scenario sounds like friends helping each other🤷🏻‍♂️

*Disclaimer: I'm new to this and only offering my view from the outside🙏

@Brenden Mitchum, thanks for your experienced perspectives on all of this! Mike & I are in very similar stages. I move here from SF with hopes that my "nest egg" will allow me to get into REI, nabbing an easy, relatively inexpensive property that only requires cosmetic touch ups that can be completed in under 14 days and less than $20k. But this is Atlanta and you already know that this market is pretty pricey too. I see things are substantially less expensive in Macon, but I'm guessing it's because it's far as hell away from all that attracts people to Georgia. I mean, just this morning I saw this newly renovated 4bd 3.5 ba on about 1/2 acre with all new everything and a huge unfinished basement only asking $170k!!!

That example tempted the buyer in me but the investor felt like I would not want to be forced to sell such a large and beautiful SFR for that cheap. So I'm keeping an eye on College Park & East Point, areas that haven't be completely gentrified yet thus more fixer-upper options are available. I've also decided to look for tenant occupied quads and go the house hacker route. Excellent credit (and my future job hopefully soon!!!) will allow me to pay a small 3.5% downpayment.

I'll continue posting my journey here on BP as I continue reading and learning from you & the wide variety of other experienced REI's.

Thanks Brenden!

@Michael Cavitolo, not sure if you're only wanting to be a landlord or a fix & flip investor but maybe you should consider starting out as an owner occupant.

With a good credit score, FHA will give you a loan on a property that has up to 4 units (a quad) but you'd need to live in it for at least a year and BEST of all, you'd only need to pay 3.5% down!

Going the owner occupant route, you can get an FHA 203k loan which would give you up to $50k (I think it's that much..check into it) just for rehabbing the property you'd be an owner-occupant in. This is the route I'm *most likely* gonna take since hard money lenders that I've contacted have too many extra upfront fees in addition to extremely high interest rates. If I had $150k of cash on hand I'd probably do hard money but I don't.

I hope this is "news you can use" :-)