When it comes to flipped homes, ATTOM reported a purchase price of $147,100 and a sales price of $194,000 during the quarter, a 31.9 percent gross return on invest- ment. The average flip took 154 days to complete. Still, Corsini sees Atlanta as a strong and steady market and a good place to be investing in real estate and to run a real estate brokerage. And it’s a metro area that is attract- ing strong demand from buyers. “I think Atlanta is one of the main markets for iBuyers. There must be confidence that Atlanta is a strong market, or they wouldn’t be buying here. They’re going to continue to take market share.” Foreclosures in the area have declined precipitously over time. For 2018, ATTOM reported 11,831 properties with foreclosure filings, a downward spiral from the metro’s peak of 95,145 properties with fore- closure filings reported for 2010. In all 2,828 properties with foreclosure filings were report- ed in the Atlanta metro area for the first quarter of 2019, a 25.50 decline from the same quarter a year ago. The metro area ranked one in every 87 housing units with a foreclosure filing for the quarter. Likewise, distressed sales, which investors at one time counted on for discounted deals, now only account for 17.6 percent of all home sales in the metro area for the quarter, down two percent from a year ago. There was no change reported for third-party foreclosure auction sales at 1.8 percent, while short sales were up slightly and REO sales declined during the period. Homes in the metro area sold for a median price of $201,300 during the first quarter, a 4.8 percent year- over-year increase, and 121 percent above the post-recession bottom
price of $91,000 reported for the first quarter of 2012. “From a high-level perspec- tive, if you look at what drives real estate demand and makes assets attractive in a market like Atlanta, I would say it continues to be a strong market. It has some fairly desirable stats like good weather and the fact that prices and rents have risen quite a bit since 2010,” Logan said. Rent for a three-bedroom home in Atlanta is $1,522 so far in 2019, up 6.3 percent from the year before, according to ATTOM. For residential investors, Logan noted that the good news is growth in rental income has been “off the charts” as he put it. Yet he’s not sure how sustainable that growth will be. As for flipping, he sees good opportunities remaining in the market; although, home prices are growing at a slower pace than a year ago. In the meantime, for Corsini, when he does make purchases to flip or buy and hold, he buys them off-market, utilizing direct market- ing to locate deals. For the most part though, he is wholesaling a lot of homes to other investors. “We’ve been on this run for a long time. Nobody wants a repeat of ’07 and ’08. As an investor I want to buy at the bottom not the top. I’m biding my time to see how things play out,” he said. NASHVILLE: A TOUGHER PLACE FOR NEW INVESTORS Known as Music City USA, the state capitol of Nashville was named the fastest- growing city in the state of Tennessee in 2019 by 24/7 Wall Street. In 2018, Forbes ranked the metro area 17th on its list of “Best Places for Business and Careers.” Home to nearly one-third of the
1.8 million people who reside in the greater Nashville metro area, which posted an unemployment rate of 2.4 percent in May 2019. “Nashville is the cool kid on the block right now, so we have a lot of population growth. The business environment is phenomenally good, and there’s no state income tax,” said Martin Heflin, Faculty Director of the Real Estate Emphasis MBA program at Vanderbilt University. “The tourism thing just really took off. We are blessed with a very healthy auto sector here. One of our strengths is we do have a very diverse economy.” A long-time developer by trade, and president of Verta Development LLC, Heflin noted that while there are no boundary regulations in place to re- strict development, the metro’s stock of land is getting used up and so land prices have risen dramatically. Nashville is the cool kid on the block right now, so we have a lot of population growth. The business environment is phenomenally good, and there’s no state income tax. The tourism thing just really took off. We are blessed with a very healthy auto sector here. One of our strengths is we do have a very diverse economy."
“The big picture of Nashville has evolved to a neat city of pocket neighborhoods and each neighbor- hood has developed its own char- acter,” he explained. “Affordable housing is very much an issue here. We have the double whammy of not having enough housing stock to begin with, along with gentrification of the older areas that have evolved into higher-end markets.” While he constantly gets phone calls from institutional investors looking for multi-family products of 200 units-plus, smaller investors are still active as well. “There’s still plenty of active house flipping going on, but they’re getting more narrow margins,” he said.
Of all the homes sold in the Nashville metro area during the first quarter, 9.6 percent of them were flips, according to ATTOM. Num- bering 691 in all, total flips were 16 percent above the number reported for the same quarter a year ago but are down from their peak of 933 flips in the second quarter of 2006. The median purchase price for a proper- ty to be flipped was $175,000 while flipped properties were sold for a median price of $229,000, a 30.9 per- cent gross return on investment. Not on anybody’s radar for its num- ber of foreclosure properties leading up to the national market crash and the recession that followed, in 2018 the Nashville metro area reported a
total 1,768 properties with foreclosure filings, a rate of one foreclosure filing per every 415 housing units, a 29.43 percent increase from 2017.
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Joel Cone is a freelance business writer based in Southern California. His articles have appeared in California Real Estate magazine, Real Estate Southern Califor- nia, OC Metro, GlobeSt.com, Foreclosure
News Report, the Los Angeles Daily Journal and the Smarter Investor blog for U.S. News & World Report, as well as many other print and online publications. Contact him at snocone1030@gmail.com. As a founding partner at Anderson Business Advisors & Law Group, Clint Coons is a real estate asset protection expert and an avid real estate investor. He wants to help every investor create a well-balanced plan so they can continue to grow their portfolio and have their capital and invest- ments protected.
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