Atlanta Real Estate Investment Opportunities


by Erika Hamilton, Better Homes Realty

Atlanta has played an important role in the history and the economy of the United States ever since it was founded as a town called Terminus in 1837. Once the railroad arrived, it was renamed Atlanta, playing a centric role during the Civil War until it was burned by Sherman’s troops in 1864. But the city’s defeat did not last long as it became an important economic center in the new South and headquarters to giants like Coca Cola and Delta Airlines to name a few. To this day the city continues to develop its pro-business environment attracting investors from around the globe such as Porsche Cars of North America, a company which recently broke ground for the construction of its headquarters near Hartsfield-Jackson Atlanta International Airport ... ( more info).

Although the economic recession had a serious impact on the Atlanta economy and thus its real estate, the city continues to develop its marketing plan for growth, not only enhancing the downtown area (more info) but around Hartsfield-Jackson Airport (read more), as well as adjacent counties.

The economic recession in Atlanta opened the door to investors world-wide who have flocked to the city in search of real estate investment opportunities offering excellent returns. From Equity Firms buying packages of foreclosed homes (more info) to national and international investors seeking low prices combined with affordable property taxes and excellent rental opportunities. The city’s real estate recovery is plainly visible in the construction boom visible all around greater Atlanta.


A couple of examples

Following are two real-life examples of investment transactions recently closed in the residential and commercial fields:

2 Bedroom, 2 Bath townhome in Decatur, Ga. Built 2005. Sold June 2013. Purchase Price $51,000. Rented within two weeks for $850 per month. (Within half a year from the sale, similar properties in the same complex are listed for $63-70,000).

3600 sq ft office building in Woodstock, Ga. Built 2001. Purchase Price $255,000. Closed January 31, 2014. Tenant occupied. Monthly lease $3,600.

Investor demand is driving real estate values up around Atlanta but excellent buys can still be found. Return on investment can run from 7% to 12%.


Short Sales and Foreclosures

When investing in real estate in Atlanta, investors must understand the difference between the term Short Sale and Foreclosure. The term Short Sale is highly misleading, as the transaction can be quite lengthy. The term “short” in this case refers to the price and means the mortgage holder is “under water”. In other words, the mortgage holder owes more than the property is worth in today’s market. If the Short Sale is described as "approved", it means the bank holding the mortgage has approved the asking price. But, in most cases, the listing agent prices the property low to encourage multiple offers. The highest offer is then submitted to begin the short sale process. Bureaucracy what it is within large banking institutions, the "approval" process has been known to take anywhere from 2 months to over a year. Beware!!

Foreclosures, on the other hand, are properties which the bank has repossessed. It is important for investors to realize that the banks are well aware of market values and intent on recuperating their losses. Nonetheless, banks will price foreclosures attractively to drive multiple offers. The highest bidders are typically asked to submit their "highest and best". Highest meaning highest price, best meaning best terms (cash buyers closing without delay and asking for no repairs or seller monetary contribution to closing are considered tops). Government sponsored institutions like Fannie Mae (FNMA) and Freddie Mac (FHLMC) only open their foreclosed properties to investor bidding following a first look period for owner occupants. Serious fines apply for misrepresentation.


To keep in mind

With any real estate purchase, the seller requires Proof of Funds or a Pre-Approval Letter. Proof of Funds can be a copy of a recent bank statement showing a balance high enough to complete the purchase. A Pre-Approval Letter is issued by a lender once the applicant’s credit and recent tax returns have been reviewed.

Expenses involved in any real estate transaction in Atlanta include attorney fees, which vary from firm to firm, title insurance, pro-rated taxes, and pro-rated Home Owner’s Association (HOA) fees as applicable and other miscellaneous fees.

When buying an investment property in Atlanta, investors must have their agent make sure the Home Owner’s Association does not impose rental restrictions within the complex, which could prevent the buyer from renting the unit.

It is critical the buyer request a ten day (or longer) Due Diligence period to conduct a home inspection using a licensed inspector and to research HOA covenants and restrictions. The title search conducted by the closing attorney will uncover any liens (more info). If any issues are uncovered during the Due Diligence period, the buyer has the right to terminate the agreement and recover the Earnest Money (more info). The timeline must be strictly observed. All dates begin with the Binding Agreement Date (more info).

The investor should obtain property insurance by the time of closing. When purchasing using a loan, the lender will require property insurance.


Property management

Property Management is readily available in Atlanta. At Better Homes, we offer full support, from identifying the property to leasing it and managing the rental. Once the property has been purchased, Property Management will identify what repairs or updates are necessary, obtain contractor quotes, supervise the work, list the property for rent, screen prospective tenants and manage rents and repairs once it is leased. Property management fees typically run 7% to 8% of the monthly rent depending on the number of properties in the portfolio.


Real estate investment and U.S. visas

A concept interesting to foreign investors might be the opportunity to obtain legal residence in the United States through real estate investments. There are multiple types of visas and investors are advised to contact an immigration attorney (more info) for counsel. Specific information about real estate investment and visas can be obtained here.


More information

For more information or to begin earning excellent returns on your investment funds, please contact:

Erika Hamilton
Better Homes Realty
+1-404-597-1075
hamilt_e@bellsouth.net
Erika's profile in homes.com
Erika's profile in zillow.com


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