South Atlanta Househounds

From College Park down through Stockbridge, McDonough to Griffin and Peachtree City in the west and Covington in the east, the majority of loans are being written in the price range of $85,000 to $150,000.  This value range is what we affectionately call the sweet spot and it accounts for over 70% of the home sales throughout South Atlanta. 

Let me begin by saying that there are a ton of deals in the sweet spot.  There is still an oversupply of distressed properties such as REO’s or short sales in the sweet spot, but as this value range represents such a large percentage of the sales, the principle of supply and demand comes into play.  You have to move quickly and we are beginning to see many more full priced offers… an early sign that the market is improving. 

But what about those properties that are on either end of the spectrum?  If you have the ability to pick up lower end properties as an investment or can afford higher end properties then now is a great time for you to buy.  In looking at property values for the past year we see that overall throughout all of South Atlanta we averaged being down by approximately 10%.  But if you look at the percentage discounts taken on the properties that are either above the sweet spot or below it, you find discounts in the 40, 50 even 60% range.  As the market continues to evolve we are going to see more and more purchasing pressure put on these properties and the values will stabilize, but if you’re looking to buy in the price range either above $175k or below $50k, now is the perfect time. 

If you need any help finding a property above, below or right in the middle of the sweet spot, just give us a call.  We know the market, we know the area and it would be our privilege and honor to assist you with your purchase.

 Our goal is to become the best real estate resource for all of South Atlanta – Henry, Clayton, Spalding, Butts, Rockdale, Fayette and surrounding counties. The ideas in this blog are our personal opinions and subject to market uncertainties. Should we ever be able to assist you with any of your real estate needs, please give us a call at any of the numbers to the right or call our main line at (770) 769-8000.

Like me, I’m sure you’ve heard that “You have to kiss a lot of frogs before you find your prince“.  That may or may not be true in relationships, but it’s definitely true in real estate.  When it comes to real estate, I for one, am not afraid to kiss a frog.  But what does this odd idea of planting a big wet one on Kermit’s cousins have to do with real estate? 

Many people can’t see past the superficial, cosmetic or easily fixed items that a potential house may have.  Paint, carpet, appliances and landscaping are all easy fixes.  Just last week I was showing a buyer some homes.  We pull up and he says “Lets not bother with this one; it looks like the south side of a north bound mule”.  I throw out the old adage that you can’t judge a book by its cover and he only agrees to go inside after more prodding by me.  Once inside he finds the interior is perfect.  We place an offer that evening and at a steep discount.  Yes the landscaping was horrible and incredibly overgrown, but he got an amazing deal. 

How to tell the difference between a frog and a prince? 

Go frog kissing – look at the ugly houses.  See what it will really take to make that house your dream home.  Look to what’s really important to you and look past the bright avocado bathroom and stained carpet.  Does it have the right bedrooms, bathrooms, floorplan, style, design, lot size, neighborhood, school district, etc. 

Protect Yourself

While most of your ugly houses are bank owned and they can be a deal, not all bank owned homes are instant deals.  Use a reputable agent that knows how to find deals and is knowledgeable about the market.  If you do bid on an ugly house, be sure that you’re protecting yourself.  Make sure your offer includes a inspection contingency (5 to 10 days is common) and have the house inspected by a certified home inspector.  This can save you thousands of dollars down the road. 

Don’t Get In Over Your Head

The more work to be done can mean even greater discounts, but don’t step outside your comfort zone.    If you’ve never taken on a major renovation or remodel then stick to homes that need minor improvements.  There are a lot of deals out there that only need paint, carpet and counter tops and can still provide you with an awesome deal. 

Be Realistic 

Some folks have no idea what it costs to replace carpet, paint the interior or exterior or how much physical work it takes to prune back years of overgrowth in a yard.  If you can do the improvements, great… you’re going to save yourself even more money.  For most folks even if they can, it’s so much easier and more economical in the long run to have the work done.  If you don’t know who to call, ask us and we’ll be glad to give you a reference.  We work with tons of reputable contractors and sub contractors.  If your not comfortable accurately estimating the cost of the work, have the sub contractors come out during your due diligence period. 

Financing

There are several programs that are available to help with turning your frog into a prince.   FHA 203K is popular as well as the Georgia Dream program provides up to $14,000 towards down payment assistance and repairs.  Wells Fargo has an excellent program called the remodel express which works like a FHA 203K except all repairs are done by Home Depot or Lowes and all work is guaranteed for a year.  Contact Kevin to discuss which financing option would best fit your situation. 

So the next time your out looking at real estate and that last house was a real looser, just remember that’s one frog down… next house can be your prince. 

Our goal is to become the best real estate resource for all of
South Atlanta – Henry, Clayton, Spalding, Butts, Rockdale, Fayette and surrounding counties. The ideas in this blog are our personal opinions and subject to market uncertainties. Should we ever be able to assist you with any of your real estate needs, please give us a call at any of the numbers to the right or call our main line at (770) 769-8000.

“If one morning I walked on top of the water across the Potomac River, the headline that afternoon would read:  “President Can’t Swim.”"

 ~Lyndon B. Johnson

Good News?  Really? 

From swine flu, global economic meltdown to the housing bubble busting the news likes to keep us in the know about what scares the daylights out of us.  It’s hard to find the good news and we actually do have some good news in Atlanta. 

We’re Continuing to Grow 

Some items we learned from the U.S. Census Bureau’s latest report.

• Last year, 114,989 new people moved to the Atlanta metro area, which consists of 28 counties.
• The Atlanta metro area is now considered the eighth-largest in the country. We moved up one spot, jumping ahead of the Washington, D.C., metropolitan area.
• From 2000 to 2008, the Atlanta area added 1.13 million people. We were second only to Dallas, which added 1.14 million people.
• Fulton County has now surpassed the 1 million population mark —- and the rest of metro Atlanta keeps growing too, despite the slowing economy
• Census projections show Georgia could gain about 4 million people by the year 2030.
• In terms of percentage population gain, cities in the South took the lead nationally, with eight of the 10 fastest-growing cities.

We’re a Hard Working Group

Atlanta continues to be viewed as a place of great opportunity.  All these facets of Atlanta’s diverse economy will continue to drive our long term economic growth. 

• Metro Atlanta saw a net growth of 55,000 jobs last year.
• Consistent job gains among small companies has been the growth engine for the region.
• Atlanta currently ranks third in the nation in the number of Fortune 500 companies headquartered.
• In 2008 Atlanta placed sixth in Forbes’ ranking of “Best Places for Business and Careers.”
• Atlanta has the largest concentration of federal agencies outside of Washington, DC.
• Atlanta’s transportation infrastructure includes the busiest airport in the world, the largest highway system in the South, and extensive freight and passenger rail lines.

Lots of Folks Are Moving to Atlanta

U-Haul just named Atlanta the number one destination in the U.S.  Atlanta took the number one spot for a second year in a row.  Houston moved up to number two from number eight last year and Los Angeles rounded out the top three spots.   Here is the list of the top 10.  You can find the top 50 cities on the U-Haul website. 

1. Atlanta, Georgia
2. Houston, Texas
3. Los Angeles, California
4. Las Vegas, Nevada
5. Denver, Colorado
6. Portland, Oregon
7. Chicago, Illinois
8. San Antonio, Texas
9. Austin, Texas
10. Orlando, Florida

Note: Our goal is to become the best real estate resource for all of
South Atlanta – Henry, Clayton, Spalding, Butts, Rockdale, Fayette and surrounding counties. The ideas in this blog are our personal opinions and subject to market uncertainties. Should we ever be able to assist you with any of your real estate needs, please give us a call at any of the numbers to the right or call our main line at (770) 769-8000.

It use to be where a hand shake and a person’s word was how a deal got done… especially when you were talking about a rental property in South Atlanta.  There was no paper trail or deposit money needed in order to rent a property.  Ahh… the good ole’ days.  These days we need to submit an application fee, deposit, credit check, reference check, previous landlord reference check and list just seems to go on and on. 

But what about when you don’t have to jump through those hoops?  What if there is no checks and balances?  Well… your Spidey senses should be tingling! 

We know a very nice lady at church that just told me her story.  After looking through 50 plus rental units they finally found not just a house, but a house that was more then she could have imagined.  The rent was way less than any of the other rentals in the area, the square footage was nearly twice what she was looking at in her price range and it was in a private, gated community in McDonough.  She and her husband signed a year lease agreement, paid 2 months of deposits and also put down 3 months worth of rent in advance.  Within 45 days she had an agent knocking on her door and she was told that the house had been foreclosed on and she needed to make arrangements to move within next 10 days.  Needless to say, she was distressed. 

Unfortunately with today’s market, some homeowners are not able to maintain their home and as a last resort, they try renting the home out.  Because it took so long to obtain renters and in the meanwhile they have moved out of the house in preparation for foreclosure, they have depleted their checking account.  It wasn’t their intention to take someone else’s money, but they needed it more than the bank.  So here you have a renter who is out of the deposit money as well as any advance rental money that was given. 

So what can you do to avoid this situation? 

Use a reputable Real Estate Company when looking for a rental property.  At least make sure the landlord is asking for all the proper information such as place of employment, length of employment, reference check, previous landlord references, permission for credit check and appropriate amount for deposit.   A true professional landlord will place all your deposits into an escrow account.  If the property is being managed by an agent, ask to have the deposits placed in their brokers escrow account.  Ask questions.  Ask the landlord about their rental experience to see if this is their first go around or if they are in a desperate situation.  It’s amazing how much you can learn just through normal conversation.  If your instinct says “it’s too good to be true”, then it probably is.

Unfortunately for this nice family, they were forced to move out.  The bank was good enough to offer them cash for keys and it helped them to recover some of the moving expenses.  Looking back, she said that she should have known better because the landlord did not ask for previous landlord referrals, references, employment verification or credit checks.  The landlord did talk them into putting 3 months of rental fees, so that was rather slimy of them. 

Just a quick note, this situation also applies to Lease Purchases.  Make sure your agent has inquired with the listing agent of the seller’s situation and have all deposits held in either your agent’s or the listing agent’s brokers escrow accounts.  This is to protect you so you can get your deposit back. 

Note: Our goal is to become the best real estate resource for all of
South Atlanta – Henry, Clayton, Spalding, Butts, Rockdale, Fayette and surrounding counties. The ideas in this blog are our personal opinions and subject to market uncertainties. Should we ever be able to assist you with any of your real estate needs, please give us a call at any of the numbers to the right or call our main line at (770) 769-8000.

Every cloud has a silver lining, and the rise in South Atlanta home foreclosures is no exception. That’s if you’re an investor hunting for good deals.

Investing in foreclosures is not a low-risk venture. You often need to act quickly, have ready cash and may need to earmark money for repairs to make properties sellable. Here are some basics on buying distressed homes.

Where The Deals Are

Short sales: When borrowers can’t keep current with mortgage payments, some lenders agree to allow the sale of the property for less than the loan balance. These can be found by reading the comments section of the MLS listings.  Beware of the difference between an approved short sale and an unapproved short sale.  In an approved short sale the current owner has already gone through the short sale approval process, which can take up to 3-4 months.  If  your dealing with an unapproved short sale be prepared to wait.   

Auctions: Auctions typically offer good buys, but the risk to you is greater. You must research liens against the property and decide on your maximum bid price. You’re also required to have proof of funds or be pre-approved and in most cases a large down payment is required just to bid.  Typically the auction companies do not offer any financing or inspection contingencies.  You can use an agent to assist you or deal directly with the auction company. 

REO’s, Foreclosures: (Real Estate Owned)  These are properties that have been taken back by the bank. These homes are frequently listed in the multiple listing services and can be found on the internet through a multitude of websites.  I suggest you use an agent that is comfortable with buying REO properties as the process is different than buying an owner occupied home. 

HUD Homes:  These are properties taken back by the FHA.  While primarily targeting the owner occupied, there are often deals for investors who don’t mind making improvements.  While the owner occupants get first crack at these properties, they tend to stay clear of most properties that need improvements, thus making great deals for investors.  Traditionally HUD has taken a 8% to 12% discount off their list price, but they now are taking deeper discounts on properties that have been on the market for longer than 120 days.  For a listing of the best 4 HUD deals in South Atlanta you can visit www.southatlantahudhomes.com. 

To Repair or Not Repair… That Is The Question!

Deciding to repair or not should be dependent on what your goal for this property is.  If you want to flip it for a profit then you will most likely need to make some repairs.  If you’re wanting to keep it for a rental, maybe repairs could be less.  In all likelihood you will need to make some repairs, but the trick is to set a budget and keep to it.  Your repairs or updates need to match the value, neighborhood and price point of the house.  If you have a property your planning on selling for $70k, then putting granite counter tops may not be cost effective.  If however you have a house for $300k, it may be expected.  Doing the repairs yourself or working with an agent like me, who has a complete list of reliable subcontractors will save you money.  If you need some help with reliable subcontractors, just drop me a line at alrichard@charter.net and I’ll send you a list of who we use.  We list and sell bank owned properties and we constantly have to use subcontractors for all sorts of repairs.  Make sure you include not only your repair costs into your final selling price but also a realistic estimate of your holding costs.  If it will take months for you to repair it before you even start marketing the property, make sure you account for that cost.  For Henry County, Clayton County, Spalding County and Rockdale County 157 is the average days on market. 

Now What Do You Do With It

A couple of years ago the flippers were everywhere.  Even today you can’t turn on HGTV without finding a flip this house type of show.  We work with many investors and while there are abundant deals to be had, most of our investors are not flipping properties outright.  There are still a few areas where flipping is still happening but it’s in small pockets throughout the city.  This is not a great market for first time flippers to be cutting their teeth that have never done this before.  With the downturn in the market, most of our investors are now picking up these properties and sitting on them until the market turns.  By and large, most are only making minor repairs and renting the properties.  For most, the plan is to rent the properties for the next year or so until the market turns, then make the major repairs and sell it for a bigger profit. 

Should you need any help finding investment properties please give us a call.  We list bank owned properties, we run South Atlanta HUD homes and we are very knowledgeable and comfortable with these properties.  We know how to find the deals so please give us a call at (770) 769-8000 or drop me a line at alrichard@charter.net.