Well folks, I’m going to let it out of the bag.  After buying multiple properties in 12 different states in 2009, we have made the ABC’s our targeted area.  That is, the Atlanta Bedroom Communities.  There are a significant number of reasons why we like this area, so let’s get down to business…

Let’s start with why we like Atlanta and then the reasons that support our decision.

Georgia is a pro business state; they make it easy to conduct business there.  It is a non-judicial state which means if you have to foreclose on someone who hasn’t paid on a mortgage; it only takes 4-6 weeks.  The same holds true for non-paying tenants.  If they don’t pay, it’s easy to get them out in three weeks or less.  Of course, we would always attempt to mitigate a situation like that prior to going to court.

Due to low property taxes and low homeowner’s insurance, Georgia is one of the best cash flow states to acquire property in.  There is a rule of thumb that rents should be about 1% of the purchase price of a home.  We do significantly better than that in Georgia where we buy in our targeted price range for first time homebuyers of $50,000 to $150,000.  Those houses that we would put a tenant in with an option to purchase for $150,000 are typically sold to our investors for well under $100,000.  You can’t beat this cash flow, but there is much more.

We are able to acquire newer houses (1995-2010) for a fraction of what they cost to build.  That means these houses will not have any deferred maintenance and we put them in “turnkey” condition for our investors.

These bedroom communities have a plethora of buying opportunities, but they are not all the same.  You still must do all of your due diligence on every house because Atlanta, like other cities, has undesirable areas.  They may look good in a picture, but you must get your feet on the street and check it out for yourself.  That’s what we do.  On every house we select we first do our due diligence on the internet and then we visit the neighborhoods in person.

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The following additional reasons support our belief that the ABC’s are the #1 cash flow areas in the USA:

Transportation

Climate and quality of life

Business climate and job creation

Upside potential

Transportation

Atlanta is the Queen City of the South and has the busiest airport in the world.  That’s right; the Hartsfield-Jackson Atlanta International Airport is the busiest in the World!  Getting into Atlanta by plane is a lot easier than by automobile.  But everything is relative.  If you know which part of Atlanta you have to be in, you simply have to “time” your drive departure time and arrival time.  They also have a tremendous infrastructure of roads and the light rail “MARTA” system.  Atlanta is the transportation hub of the Southeast and this bodes well with job creation.

Climate and Quality of Life

Everyone can see for themselves that Atlanta is in the South.  It has beautiful topography throughout the area and it has four seasons.  Now, the really nice thing about the four seasons is that the spring, summer and fall are long and the winter is relatively moderate.  Oh, for sure, there can be an occasional snow storm, but overall it is moderate.  The winter is really short compared to the Northeast and the summers can be hot, approaching 100 degrees at times.  This bodes well for year round outdoor activities.  The other thing that stands out about the quality of life is that Atlanta is really a Big City.  It has all the major sports franchises, all kinds of night life, beautiful parks and the finest aquarium in the USA.

Business Climate and Job Creation

As I indicated earlier, Georgia has a pro business climate attracting business from all over the country.  Of the Fortune 1000 companies, 750 of them have business operations in Atlanta.  That is one heck of a lot of support for the job market.  Compare that to an area like Lehigh Acres in Florida, which has no industry and you realize why the long term outcome of housing will be positive in Atlanta.

In December, it was written in the Atlanta Business Journal that they are making Atlanta the “IT” health capital of the USA, adding over 200,000 jobs.

Do you think that is good for the housing market?  You bet it is!  Those 200,000 jobs will have an incredible impact on the local economy as these employees will buy goods and services which will sustain continued growth.

Delta Airlines, Coca Cola, Rubbermaid and Turner Broadcasting have their headquarters in Atlanta, employing thousands of people.

As corporations get fed up with the high state taxes of the Northeast and Midwest, they locate to warmer climates that are tax friendly.  It is rumored that Georgia, which has a largely Republican constituency is discussing lowering the state income tax from 6% to 4%.  That will be another “lure” for businesses to relocate to Georgia.

With the high property taxes and homeowner’s insurance in Florida, we are seeing an exodus of people from Florida to Georgia.  Heck, I’m one of them, but only for investment reasons.

Upside Potential

My personal opinion is that Georgia is the best state for cash flow and for faster rebound in house values. Atlanta was rich with mortgage fraud which has caused a tremendous amount of foreclosures which has led up to this amazing house-buying opportunity.  These lenders must unload their REO portfolios (Real Estate Owned) in order to comply with FDIC requirements for cash deposit reserves.

It was overbuilt, over financed and that was and is a problem for a lot of people – but not us!  You have to really see it for yourself.

So stay tuned.  We will be doing our first ever event in Atlanta in conjunction with Escape Artist.