Greg: How are you?
Mathew: I am awesome. Greg, excited to have you here today.
Greg has been in real estate for 30 years in Metro Atlanta.
And this guy has bought for institutional buyers. Like, if you’re going to find out about investing in Atlanta real estate, Greg’s got the credentials.
So, Greg, thanks so much for joining us. I want to jump right in.
And talk a little bit before we get started and start giving specific areas about…
You want to make sure people understand, kind of, the risks versus the reward of investing in Atlanta.
Greg: I knew that. I mean, Atlanta is one of those markets that everybody wants to own property in.
And the reason for that is that it’s a very diverse economic market.
We’re not dependent on any one type of industry. So it continues to grow.
The population scale that we expect over the next 20 years is going to be more around 8.1 million people.
The big MSA, Metro Atlanta is…even though Atlanta is, sort of, the name, it’s composed of about 30 different counties, multiple cities, so it’s really very diverse.
And there are great opportunities for investing, but it’s really important also to know what you want from a risk-reward point of view.
Atlanta is not a market where it’s one type and where you’re going to expect certain types of cash on cash return.
It’s a combination of what your return requirements are and your risk tolerance.
It’s just knowing what you want to buy and being comfortable with that. And what the market looks like.
And it relates to schools, it relates to velocity, price points and really the stability of the tenancy.
Mathew: Yeah. If you’ve been in Atlanta lately and just driven around 285, it’s hard not to believe that Atlanta is growing and growing faster sometimes than they can handle it from a traffic standpoint.
And the one thing I want to say I should have said first was just because this guy is obviously a huge Clemson fan, don’t let that mean that he lacks credibility.
So don’t hold that against him.
As an Alabama fan, I will not hold that against you, since y’all are currently one upon us.
Greg: Well, you know, that’s for sure, well, this year. We’ll see what happens next year.
Mathew: All Right, Let’s Talk About The First County And Talk Real Quick About Atlanta. (Where To Invest In Atlanta)
People talk about Atlanta in terms of counties, not cities. Talk about why that is and then we’ll jump into the first county.
Greg: So Atlanta is one of those places were way back in the day before they had cars and things;
They decided that everyone ought to be able to get to their county seat by sundown on horseback.
They wouldn’t allow counties to be much larger than a distance that you could ride on a horse in a day.
That having been said, there are cities that span across a county or multiple counties.
So when I say a city like Powder Springs, it actually it’s in two different counties.
And we refer to counties because it’s just from, you know, when you live here it makes more sense and it’s a homogeneous kind of step.
So to follow that, you know, what we talked about initially is one of the counties that I think is the hottest county for investment these days. Oops.
What happened to me? Am I still there?
Mathew: No, you’re fine. You’re up. Hopefully, you can see mine.
Greg: Yeah, I can. And so to, kind of, follow back, the county that we had discussed initially is a very hot county called Paulding County.
Now, Paulding County is to the Northwest of Metro Atlanta and it is just to the west of a very established county called Cobb County where Marietta is.
And so Paulding County is, you know, a little bit south and a little bit west of Cobb County.
It is a developing county from Cobb County’s high school’s affluence and property appreciation.
So a lot of people have gone there simply because Cobb County’s become unaffordable and there are great opportunities.
A lot of lands and so it spills over and benefits from the people that are moving just across the county line to be close to all the benefits of Cobb County without costs if that makes sense.
Greg: Yeah. So the big cities, or the three cities if you will, that are known for Paulding County are Hiram, Dallas, and Powder Springs.
Mathew: And… Yeah, go ahead. Finish that thought.
Greg: And they were, kind of, equally similar in size. They all run along Highway 278, so they look very similar when you’re out there.
Talk a little bit about how that area has recovered from the recession, including a lot of building that’s going on there, new builds.
Greg: Yes. As I mentioned, the building boom back in the mid-2005 timeframe was to the Northwest side of town.
And so it benefited Cobb County.
The next build went to Cherokee County, north and to Paulding County, to the west.
And then when the economy crashed in 2008, all of that building, kind of, stopped dead.
And it sat there for about five years with these lots that are all finished and ready to be built on, but no demand for them.
When the market came back in 2012 and beyond, Paulding County really exploded because all the lots were out there and built and discounted.
This is where most builders went to start.
So the amount of new construction that was built out there far exceeded anywhere else in the Metro Atlanta area and that benefited.
Because there was new production at reasonable prices, so it came back pretty strong there.
But it’s still relatively affordable just because it’s still, kind of, a very exurban suburban-type county.
Greg: You know, primarily we’re looking at three and four-bedroom homes.
The average age out there is 2003 build.
So, you know, a 1,450 square foot, three-bedroom house, you’d probably be looking at $159,000, $160,000.
And that will rent for about $1,325 a month.
You know, an 1,800 square foot, four-bedroom home, you’re probably looking at about $180,000, and you’re looking at about $50 a month more in rent on that, about $1,375 a month.
So talk a little bit about…you know, you talked about its relation to Cobb. What would somebody do for a living that lives in this area?
Greg: You know, a lot of people, especially, it’s not so per se, blue-collar, but I would think that it’s definitely gonna be more middle-class.
So you’ve got people that are in the service industries that are working locally.
There are some people in the office.
That would be, you know, office admin support that would be driving into Cobb County working in Marietta which is a fairly large business district.
But, by and large, I’d say probably 60% to 70% would occupy jobs within the county.
I mean, you have office buildings in each county, so it’s not like you have to come to downtown Atlanta to work in an office building.
Every county has its own kind of ecosystem of office buildings in retail.
Greg: Paulding County, because it’s not served by an interstate, is a little more difficult to get to.
And that’s why I think the majority of people who leave Paulding County work within 25 or 30 minutes of there.
Other counties like, say, Gwinnett County, we’ll talk about and, you know, and Cobb County do have like 75 or 85.
And I do see a lot more folks there that commute in because those counties are more affordable than living in town.
Mathew: All right. So let’s jump over to Gwinnett County.
So now we’ve gone from the northwestern side of town and now we’re talking right here, right, in Lawrenceville.
Greg: Lawrenceville, Snellville, to the, if you will, east I-85 and then to the west I-85 are cities like Suwanee, Duluth, Berkeley Lake.
You know, while it’s not fair to, sort of, draw the line right down, definitely, Gwinnett County on the west side of I-85 is much more affluent.
Then the other although, I mean, you know, it’s not fair to say completely, you’re definitely looking at probably opportunities for rental properties to be in Lawrenceville, Sheila [SP], Grayson, those markets that are a little bit east of I-85.
Mathew: Okay. And one of the things about this area is because it’s a little more affluent, you’re talking about the gross rent multiplier that people can expect is a little less, but they need to focus on appreciation in this area.
And that’s not terrible. What you get for that is likelihood, you know, of good, solid schools that continue to improve and, you know, the quality of life there.
And it’s diverse enough so that if you own a property there and you own it for 30 years, it’s still going to be worth more than you bought it for.
There’s not a likelihood it’s…we don’t think that you’re gonna see that county, sort of, the decline in value.
It’s just, you know, the good place to live and the schools are supported there, and the transportation nodes are good.
So there’s a lot going on in Gwinnett.
Greg: Again, three and four bedrooms, I would say almost, if it were me, I’d buy a four-bedroom versus a three even though because you’ll see there’s quite a bit of rent differential there.
A three-bedroom house, you’d probably look at about $170,000 and you’re getting a little rent of about $1,315, which is, kind of, similar to what it was in Paulding.
For $190,000, you’re getting rent of $1,460 to $1,600.
So it’s, you know, going up by $150 a month for that extra bedroom and the square footage.
I think Paulding is about 26 which is, you know, strong.
That just means there’s more demand than there is supply obviously.
But both of those are pretty good when you’re looking at 30 or so days on the market.
Mathew: And unlike Paulding, Gwinnett has I-85 running right through the middle of it.
So it is like an artery that brings people into the perimeter and they may work at the perimeter and an office building.
And one of the things you said was, “Hey, downtown Atlanta is not the only kind of epicentre for these offices, you know, there are five different office districts within the Metro Atlanta Area.”
So, yeah, Gwinnett has the big one, the Perimeter, New York Fulton.
So you’re right.
But I will tell you though, from a safety security point of view, in fact, that I-85 does run through it does make it more viable long term.
Simply because there are always going to be people that want to commute or that need to commute and are gonna be able to live in Gwinnett County.
Because it’s reasonable enough commute to get in town or to the Perimeter. That’s the benefit.
You know, the risk of Paulding is that, you know, you’ve got to capture people that live in that area and work in that area, whereas Gwinnett can still capture people that need to commute.
Mathew: And this is one of those areas that, just like suburbia, strong parks, strong athletic fields, so people live or play in the area.
So it also has great access to the mountains, Alan’s North Carolina, the mountains of South Carolina, Clemson, shout out to Clemson. It’s close to Clemson.
Greg: Yeah. One of the great things about Atlanta is that they’ve moved the baseball stadium to Cobb County and they have the Infinite Energy Arena which is a big concert venue and also they have their minor league hockey team that plays there.
So that’s really great, you know, it’s a great fixture of that area.
It’s really helped it develop and it’s a lot of fun. You don’t have to drive in town sometimes to go see big concerts.
Mathew: And that, kind of, proves the suburban-driven city because they’re moving their athletic teams out into suburbia instead of requiring people to come into town for it.
So Henry County, you know, typically Atlanta has been one of the cities that’s really experienced growth only the north.
And the south side cities have been slow to, sort of, react and have not really benefited in years past.
Henry County, kind of, bucks that trend and it’s different than, say, Clayton County or South Fulton County in that it’s really been buoyed by the quality of its schools.
So its schools are better than average, whereas those other counties that join it are not, and thus values have come up.
And it’s very similar in a lot of respects to Paulding County. It’s, kind of, more of a live-work area.
And so, I’d say that a lot of people in that county work in South Atlanta, a lot at the airport.
Hartsfield is a huge employer because it’s the largest airport in the world and it employs a ton of people both there and at its surrogate.
But it also has benefited from this huge boom in the movie industry.
So, you know, a lot of people probably know Atlanta has become, kind of, Hollywood Southeast and a lot of productions, a lot of production studios are built down there and there’s a lot of work going on.
So people are finding it to be an affordable place to support that industry and it continues to grow.
And the nice thing about it is that its rent multiplier’s the highest that we can find around. It’s a 0.83.
And it’s very affordable for the rent that people are getting.
Greg: Three and four-bedroom houses are, kind of, the targets. You know, it’s kind of a split.
If it were me, you know, I’d probably buy one or the other.
It almost doesn’t matter because of three bedrooms, we’re looking at about $160,000, four bedrooms, about $185,000.
So there’s a $25,000 difference between, you know, that.
And the square footage is about, you know, 1,700 versus 2,300.
We’re looking at a rent of $1,395 for three bedrooms, rent of $1,498 four-bedroom.
So it’s pretty evenly divided all of them, you may get a little bit better rent multiplier in a three-bedroom house.
The NASCAR race track is down in this county, right?
Greg: I think Atlanta is one of the last races of the NASCAR circuit tour right before they have them, kind of, the playoffs if you will.
And so Atlanta Motor Speedway in Hampton is a big draw.
And there’s a lot of outlet malls and stuff down there.
And if you drive a little bit further south of 75, there’s quite a bit of stuff going on in the middle of Georgia.
But that race track is definitely fun. They do a lot of, kind of, cool stuff there as well.
The first one is Paulding, P-A-U-L-D-I-N-G. The second one is Gwinnett, G-W-I-N-N-E-T-T. Is that correct?
Mathew: And then the last one is… What did we say? Henry County, H- E- N-R-Y, just like the name. Greg, this has been awesome.
Thanks so much for spending some time with us.
If somebody wanted to get in touch with you, maybe wanted to get you to help them buy some houses, what’s the best way for them to do that?
Greg: They can go to our website, resideumbuyshouses.com or they can email me.
My email address is [email protected]
It’s a little hard. The last name is K-U-R-Z-N-E-R. Group, G-R-O-U-P.com.
And if somebody wants to buy a house and then management or has questions for gkhouses.
We’d love to be a resource to help you buy the right houses.
We always say, you know, you have to get married to your property manager, so we want to make sure we put you in touch with good people like Greg to help you buy a home.
So, Greg, thanks again. Until we get to do this again, thanks so much.
Greg: My pleasure.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.