US Atlanta, GA - USA Property Investing

maybe speak to @Bedeveloper

 

Just an update on the Atlanta market.

I am still picking up some cheapies along the way, but its just getting harder and harder to do this.

Its still going ballistic, with now around10-12 headquarters moving their operations to Atlanta as its just cheaper way of doing business. With this of course comes growth.

So when I first visited Atlanta in 2011, every second house has a foreclose sign at the front of the property, now nothing, very difficult to source deals on the open market as inventory/stock is so low.

We renovated a small 3 bedder, settled in February 2014, completed a $20,000 renovation all up $73,000, sourced this through a tradie/contractor so it did not hit the market, was an absolute dump, needed a mask just to work on the property, but in the Beltine of Atlanta.

Five months later/ today, this property will sell at minimum of $100-110,000. I am renting this one for $925 per month. As the markets continues to grow I just don't see the point of selling and its a cash cow.

So that equates to around 30-40% profit in 5 months. However, I am looking at the bigger picture with this one, cash in the door and growth.

Where from here??? I am going with the flow, I just don't see anything that will stop this market from growing, never seen anything like this.

To think Atlanta dropped 70% in property values in 2007 and from 2011 its just been going gangbusters.

Could you imagine if this happened in Australia it would be a bloodbath... it wont happen

MTR

 

Good on you, MTR!

Well done for having a crack over there and going outside the comfort zone.

 

Thanks
We may have picked up a multi unit complex will know for certain in a couple of days

 

My strategy in US/Atlanta market has changed significantly since I started purchasing in 2011.

I can no longer buy big homes, they are too expensive and don't stack up in terms of cash flow and I no longer buy in the burbs.

Mid town/Down Town is where you buy the gems, they are ugly homes, much older , but this precinct is gentrifying rapidly, and with this comes growth.

However, It may be hit or miss with the tenants, its a matter of patience and bedding these. There is no issue in terms of demand, but you must find the right tenant. This strategy is growth and cash flow, a quick clean up and perhaps in 12/24 months a major renovation and a flip, dependent on how much the property increases in value
... or just hold forever, you wont get the same returns in Australia.

 

Am now going for my first SHORT SALE, does not mean I will secure the property.

This process may take more time as all parties need to agree with the price. I have a figure that works and I believe they will take.

This is a townhouse, generating conservatively around 8.6% net return.
In Australia we would calculate it at 17% gross yield.

definition
A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.


I am now at the stage where I want to keep buying up in USA when the opportunity arises..... not only for yield/cash flow but because the market keeps rising.

I can see the $35K properties hitting $200K next year? I could be wrong, but its just what I am seeing, and no signs this train is going to stop

MTR

 

Update.

My offer was accepted, but on reviewing the property I found out it did not have HOA fees, what we call Strata fees in Australia.

This is a real concern for me as we could go from attractive property to ghetto.

There were 3 offers on this property.

What happens if you pull the pin on a property in US? you lose your earnest money, around $1,000, so do your DD prior to transferring funds.

How a short sale works - banks has to approve the sale price as these properties are heading to foreclosure as owners can not service debt. This is also why short sales can take months to finalise. This particular property had been ticked off by the bank.

This is the townhouse, on average I look for around 1300-1500 sq ft for this product

 

I will buy anything that I can secure, but no HOA/strata killed this deal

Last townhouse I purchased settled in Feb 2016 $35,000 today is now worth around $75-80,000

Its a moving market

Trying to snap up as many as I can but cash flow is getting harder to achieve

I should start a thread

"What will stop the US market fromm Booming"

Not even interest rises will stop this market, not enough supply and too many buyers from just about every country around the world

 

The CF is unbeatable...but do you think that the CG is better than OZ?

I am seeing movement in Brissie, Hobart, and Canberra....over the next year...the money there will do better CG wise...but agree CF will not be as good.

The other thing to keep in mind is the currency fluctuations and you pretty much need to pay cash initially...I hate doing that as I prefer borrowing at 90%

 

I have been in USA since 2011 my initial investment of 500k is now close to $2M and income around $130-150k depends on slippage

Currency play out of my control, yes its there, rents also in US$
I want Au$ to fall, seems this is what they are predicting

Australian property market has been very kind to us all
What happens next no idea. But as developer nothing is stacking up for me

US markets provides me with some strategies I can not do in Oz

Also US - much kinder to investors, no stamp duty and no CGT rules apply

I will still play in Oz but for now the US market including shares are roaring so I will continue to play

 

Great thread, the hurdle seems to be getting in the door to make the purchases... And finding good people to run the show for you.

How long do you spend in the USA each year?

 

Quoted so you would see response.

 

Thanks.
If you like this thread, then perhaps this may interest you.

How I increased my income

I will be placing an additional 2 offers on another 2 properties tomorrow, I think I am on a roll. Perhaps everyone is on holiday and I sneak a few in.

My goal is very simple at the moment, create cash flow.

MTR

 

Actually the plan was to spend perhaps 6 months pa but its probably only going to be 3 or 4 months pa. We have a team on the ground.

I have a builder (contractor) who inspects the properties, property manager and I source the properties.

Criteria - buy what I know rents out at xx, will be cash flow from day one and is in high demand. I also like the idea of being able to hold and then flip it for a profit within a 12 month time frame, may start doing some of these. Only want properties that require cosmetic job or rent ready

MTR

 

Interesting read.

 

Upto 14 properties in US now.

@Karina can you please share what is happening in Atlanta, your thoughts.

Its still rising I know that for sure. Deals to be had but far and few, more digging required

MTR

 

@Karina

Can you please share your thoughts on Atlanta properties? I am keen to hear from you.

 

Fast forward today this property is now worth

$180,000. ($220,00 AUD)
Renting fir $1390 per monthZ)