Atlanta real estate investors are taking a not-so-risky gamble that relies on a provision in Atlanta code: It lets rental units offer space for a home-based business complete with the allowance for one employee. For example, at the corner of MccLendon and Brooks Avenues, a two unit space will be marketed as a home office. The idea is for these to have space for a home-based businesses like consulting businesses, accountants or therapists. The office spaces are downstairs and the living quarters are upstairs. More and more people are working from home and telecommuting too. So, even if making space
If you are a home flipper, you may have heard of Ribbon. Ribbon is a new real estate tech startup. It's only a year old, but it was founded by former executives of Twitter and Lending Tree. Ribbon saw a market, in which tech-assisted sellers ended up having to pass up multiple potential home buyers who would have to take out a mortgage to buy the seller's home. This means that a majority of home buyers are absent from the buying pool with these tech-assisted sales. Ribbon offers a risk algorithm that figures out if a buyer is actually likely
Investors are taking advantage of the fact that nearly 28 percent of homes listed in Atlanta experienced a price drop last month. This makes Atlanta among the markets with the largest year-over-year increases in homes with price drops. Since we know that Atlanta has many areas that are growing, this makes for potentially prime investment real estate. Now, it might not be the best idea to buy a home to flip in the area right now, but it is perfect for investing in an Atlanta rental home. This is a great time for investing in Atlanta real estate after years
Cost segregation is the process of identifying personal property assets and costs, and determining their classification for tax purposes. The purpose of cost segregation is reducing current tax liability. Often it's also used to defer taxes. This process identifies personal property assets that can be groups with real estate or real property assets. It then separated out the personal assets for tax reporting purposes. Unfortunately, it can be quite costly, so it's not always worth it. If you invested in a large real estate purchase though, it could easily have its financial benefits. The cost segregation study and report will
Funds used by the managing party to improve, maintain or acquire a property care called capital expenditures. You may also hear them called, "CapEx." This term applies when funds improve the useful life of an investment property. This term is used for expenditures used on assets expected to provide use to a business for more than one full reporting period. Capital Expenditures Some examples that could be capital expenditures includes buildings, subsequent costs to extend the useful life of the building, computers, machinery, equipment. Even office furniture that will last longer than a year can be considered a capital expense.
Have you wondered what an accredited investor is? There are plenty of different types of real estate investors. Yet, someone who fits one of these conditions qualified as an accredited investor: An investor with an annual single income of $200,000 (If married, a combined income of $300,000) An investor with a net worth of at least $1M (excluding primary residence) Plus, the investor would be expected to make at least the same amount annually. Don't worry that you won't be able to get rich investing if you're not an accredited investor, the SEC lets companies and private funds skip the
Have you heard of the commercial mortgage term, "Debt Service Coverage Ratio?" It's the term to describe the ratio that lenders use to evaluate and qualify for the financing of a commercials structure. It shows the cash flow compared to debt service. DSCR For Commercial Properties In general, most banks will need a ratio of 1.5 - 1.35 (net operating income to annual debt service) before lending for commercial property. They just want to make sure you will have enough cash flow to cover the payments each month. Net operating income should include interest, principal, lease payments and sinking fund.
Have you heard the term, "Effective Gross Income?" If you're starting out in real estate investing in Georgia or the Carolinas, you may hear this term. Also called, "EGI," it's the income that you'd have when you subtract losses of income from vacancy, concessions, model units, legal fees, employees, and bad debt. The reason it's important to know an apartment complex's Effective Gross Income is extremely telling. You don't only want to consider the Gross Potential Income. You'll also want to add in revenue generated from other things like coin-operated laundry, parking, or concessions. In order to determine your property's
If you're just starting out as a real estate investor, you may have heard the term, "Gross Potential Rent." So, what exactly is that, and how is it calculated? Gross Potential Rent Gross Potential Rent, also known as "GPR," is the hypothetical amount of revenue that you could make from your apartment community, if it was fully leased all year round at market rental rates. It's the maximum amount of revenue you could bring in from rent on your apartment complex. Determining GPR GPR is important, because it lets you know how profitable the property could be. It's the most
If you're just thinking about becoming an investor, you may have heard the term, "Equity Investment." So, what is equity investment? Well, simply put, it's the share of cash that you put into an investment. If a company that you put money into has a profit, you can earn money on your investment through a dividend, right? This lets some of the company's profits get divided by shareholders. In trading, equity means your share of stock. In real estate, you could have an equity investment in a limited partnership or limited liability company. Also, real estate investment opportunities are often