June 5, 2023
What is the Opportunity?
From Your Friends at Northwest Atlanta Properties
We’ve been in the real estate business since 1980 and have been through at least 6 major shifts in the residential real estate market since that time. This is not a major shift in our market. Supply is very low. As of this writing in the 12 zip codes, we do most of our business in there at 374 homes for sale under $500,000 with a population of over 500,000. Demand is high. If interest rates were lower, we’d see prices for homes skyrocketing. The rates are high due to uncertainty, so we are seeing only moderate price increases. The rates are expected to retreat somewhat over the next six months. If they were at historical Treasury Yield spreads, we’d see a mortgage rate of about 5.3755% The experts say to expect to see rates right at just below 6% by the end of 2023.
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We still believe that buying investment real estate in this volatile market is the best and right thing to do – and the best way is paying cash or using a self-directed IRA.
Using a self-directed Individual Retirement Account (IRA) to invest in real estate can be a beneficial strategy for building wealth and diversifying your retirement portfolio.
Here are the general steps to use a self-directed IRA to buy real estate:
1. Choose a Self-Directed IRA Custodian: Not all IRA custodians allow for self-directed investments, so you’ll need to find one that specializes in self-directed IRAs. Research and choose a custodian that offers the flexibility to invest in real estate. We can recommend a company if you need it.
2. Set Up a Self-Directed IRA: Open a self-directed IRA account with your chosen custodian. This typically involves filling out an application and providing the necessary documentation.
3. Fund Your IRA: Transfer or rollover funds from your existing IRA or other retirement accounts into your newly established self-directed IRA. You can contribute cash or other eligible assets.
4. Identify Suitable Real Estate Investments. The areas we service in Northwest Georgia have proven to be an ideal location and have provided great returns. Many of the 85 rentals we manage were purchased with a self-directed IRA.
5. Perform Due Diligence: Assess the financial viability, market conditions, potential returns, and risks associated with each property you’re considering. It’s crucial to conduct thorough due diligence, including property inspections, financial analysis, and evaluation of local market conditions.
6. Direct Your IRA to Make the Purchase: Once you’ve identified a property, instruct your self-directed IRA custodian to initiate the purchase on behalf of your IRA.
7. Use IRA Funds for the Purchase: Your self-directed IRA will provide the funds to purchase the property.
8. Manage the Property: All income and expenses related to the property should flow through your self-directed IRA. Rental income, property taxes, repairs, and other costs should be handled by the IRA custodian. We can manage that easily with our Property Management Software!
9. Understand IRA Rules and Limitations: It’s crucial to adhere to IRS rules and regulations governing self-directed IRAs. For example, you cannot personally benefit from the property or use it for personal purposes.
10. Monitor and Review: Regularly monitor your real estate investment and review its performance. Remember, it’s essential to consult with tax and legal professionals who specialize in self-directed IRAs and real estate investments. They can provide guidance specific to your situation and ensure compliance with IRS regulations
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Our Northwest Atlanta real estate market has been on a roller coaster ride in the past year.
Prices skyrocketed during the pandemic as buyers searched for homes with more space and remote work capabilities. At the end of 2022 we heard cries of doom and gloom and saw many headlines to that effect. Doom and gloom didn’t happen.
The situation quickly shifted, and prices started to decline by last summer. But now, we have good news: home values are stabilizing, and they are back on the rise. Let’s look at what that means for home buyers and sellers.
After reaching their peak last year, home prices have been slowly declining. However, in recent months, they have started to rebound, signaling a stabilizing market.
According to industry data, home values in some states have even surpassed their pre-pandemic prices.
One contributing factor to the rebounding real estate market is strong demand. With interest rates stabilizing, more buyers are entering the market, looking for their next home. Additionally, the pandemic increased interest in homeownership as people searched for more space and stability in those uncertain times. Then interest rates doubled and many home buyers and sellers paused their moving plans. In recent months we have seen a surge of activity in the market, leading to increased demand to buy homes. If you have thought about selling your current investment property now may be the best time in history.
Another factor that has contributed to the stabilizing market is the low inventory of homes. As demand grows, inventory has struggled to keep up, leading to more competition among potential buyers. This increased competition has sellers of homes that are priced right and in move-in condition receiving multiple offers! This has contributed to increased prices in our areas for these prime properties.
If you are thinking about an investment change might be an ideal time to do it. Get into the home you want to be in (we have some ideas 
) and if you can’t pay cash and the interest rates fall in the coming months or years you have the opportunity to refinance. Marry the home and date the rate! This might be the year to act before prices increase further. In a tight market, competitive offers can win the deal; be sure to take steps to ensure that your offer stands out from the others. It may require a little creativity, and we can help you with that!
Our Market Report
The snapshot of “Year over Year Price” shows that our areas of business actually remained steady. The number of sales dropped from 1077 to 973 (17% fewer closings.) Our market is strong for well-priced homes.
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Property Management Questions we are asked
How much have rents risen? About 5% a year since 2020 however as mentioned we may have hit a ceiling. See this report for an educated guess. We are seeing homes that aren’t asking the right price sit in this market until prices are lowered. If you’re not getting showings or applications within 10 days, then you may be overpriced.
Do you charge “garbage fees?” Absolutely not – our contract clearly indicates what we charge and what we don’t. This has become an issue lately with the institutional investors and their management companies tacking on various fees and charges that can add up. Recent article talks about why this is news. Our tenants love working with us because “This new place is not feeing us to death.”
Local and Fun Stuff
Movie filmed in Cherokee County Opening
Woodstock Approves $93 million budget
Canton Owner? Weigh in on Property Tax
We continue to appreciate your business and referrals to us,
Mike Stott, Jon Burke, and Donna Stott
Northwest Atlanta Properties
678-232-0927
