Johns Creek Homes and Real Estate

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Hi Socal!, Things are going well. The Lord has blessed my business and November and December months has been crazy busy, busier than my summer months. :) 

Twins are in first grade and they are doing well. One of our boy's teacher wanted to meet with Ms. Panda and I at 7:30am today and we were worried that he may have caused some kind of  trouble, but to our surprise she talked about how well he is doing in class. That made my day.

Hey I saw you ask about Benihana. That was my dad's favorite restaurant and we dined there quite often during my teenage years. We actually dined at Benihana in Alpharetta last week and the twins love the habachi smoking choo choo train performed by the chef and soy sauce in the coke bottles. I am sure your family will enjoy Benihana as well.

Panda
 
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The chart shows an interesting demographics shift in Irvine between 1980 and 2015. In 35 years, Irvine's Asian demographics grew from 8% to 45% between 1980 - 2015 while the White demographics shrunk from 85% to 40% in the same time frame. I am believe that the demographic shift that took place between 1980 - 2015 in Irvine will also take place in present day Forsyth County. Forsyth County's population currently sits at 221,009 as of 2016 from 175,511 in 2010. The white population decreased from 85.4% to 83.7% and the Asian population grew from 6.2% to 10.3% between 2010 - 2015. Forsyth County is currently the wealthiest county in the state of Georgia and 19th wealthiest county in the nation with the median income of $87,657 similar to that of Santa Clara County. Forsyth County is also the 7th fastest growing county in the nation. My personal end game is a 100% Forsyth County real estate investment portfolio.

Georgia is a landlord friendly state, whereas being a landlord in California or Cook County, IL is a whole different ball game if you have bad tenant who knows how to work the system. I personally have made a vow to myself to never own rental properties in the state of California or Cook County, IL.
https://www.census.gov/quickfacts/table/PST045216/13117- Forsyth County Statisticshttps://en.wikipedia.org/wiki/Forsyth_County,_Georgia- Forsyth County Statistics

Compare the demographics stats of Northview High School in Johns Creek vs Northwood High School in Irvine. The Asian demographics shift in Johns Creek changed much faster than I had anticipated. Northview High today looks a lot similar that of Northwood High today. The path of progress in terms of school clusters starts from Northview, then to Lambert, then to South Forsyth, then to West Forsyth, then to North Forsyth. In 35 years when I am 75 years of age, Forsyth County's demographics profile will look much like what Irvine's demographics looks like today. It will become the first Asian majority county unprecedented in the state of Georgia.

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Interestingly the 5 bedroom homes in Forsyth County are much greater in demand than the 4 bed. Originally had this property listed for $1895. I received three applications and the tenants finally bid it up the price to $1995. Tenant has been secured more than 30 days before close date.

I really like the quality and caliber of tenants Forsyth County homes attracts. 
 
Tenants are moving tomorrow at 9am sharp and this what the place looks like the today at 11am. Ripping out the carpets and installing all laminate floorings on the first floor, basement, and the steps the day before the move-in inspection / walk thru. Crazy... I know. Electricity got shut off by the previous tenant in the AM and I asked the next door neighbor if we if we can borrow theirs. This is my diamond client and I must deliver. This townhome is located in South Forsyth County. Purchased for $193k in 2014 and valued around $265k today. I also own an investment property in the same subdivision as well.

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Eyephone,
With my Forsyth County leases, I get the best results with listing on MLS which also feeds into Zillow and Trulia. Usually the in C and D properties near the city Craigslist seems to work well. I have never found a quality tenant before on Craigslist for my Forsyth properties. Leasing is a lot like fishing as you have to know the right bait and lure to use to catch a good one. After catching more than a 100 fishes, you will start to master the craft of leasing and tenant selection.

 
Panda, a quick search shows that a 5 bedroom can be had for $315K.  With 25% down, PITI looks to be $1700-1800.  $1995 rent while positive cash flow doesn't look that great.  I can get similar numbers in OC.  What am I missing?
 
Rkp,
That particular 5 bedroom home was purchased in the $270s in the wealthiest county in Georgia where property taxes are only 0.9% a year. $315k commanding $1995 rent in the OC? Are you talking about investing in a 2 bedroom condo in a sketchy area in Santa Ana? You probably wouldn't feel safe as a woman driving down alone there at night. I can put my wife and kids in any home in Forsyth County and would feel safe. I would have no problems moving into that 5 bedroom. The caliber of tenants you will find in Santa Ana vs Forsyth County is going to be night and day. 

rkp said:
Panda, a quick search shows that a 5 bedroom can be had for $315K.  With 25% down, PITI looks to be $1700-1800.  $1995 rent while positive cash flow doesn't look that great.  I can get similar numbers in OC.  What am I missing?
Click to expand...
 
Panda said:
Rkp,
That particular 5 bedroom home was purchased in the $270s in the wealthiest county in Georgia where property taxes are only 0.9% a year. $315k commanding $1995 rent in the OC? Are you talking about investing in a 2 bedroom condo in a sketchy area in Santa Ana? You probably wouldn't feel safe as a woman driving down alone there at night. I can put my wife and kids in any home in Forsyth County and would feel safe. I would have no problems moving into that 5 bedroom. The caliber of tenants you will find in Santa Ana vs Forsyth County is going to be night and day. 
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I never said Santa Ana.  I have a condo in Foothill Ranch that I purchased for $375K a few years ago that gets $2600 a month.  Very nice community and great tenants.  Today, that condo is worth $475K.  With 25% down, your all in costs are $2500 a month.  Your return on the 5b is slightly better but not substantially. 

I just assumed that cash on cash returns in your market would be in double digit range. 
 
Rkp,
If you don't me mind me asking, what is the amount of your annual depreciation and monthly HOA of your Foothill Ranch condo property (Value - Land) / 27.5 years? You are self managing with $100/month cash flow correct? With just one month vacancy or unexpected capital expenditure, wouldn't you be in a cash flow negative situation? Is your net cash flow $1200 a year? You can still achieve double digit returns in the 7 - 8 rated school zones in Lawrenceville, GA.

rkp said:
Panda said:
Rkp,
That particular 5 bedroom home was purchased in the $270s in the wealthiest county in Georgia where property taxes are only 0.9% a year. $315k commanding $1995 rent in the OC? Are you talking about investing in a 2 bedroom condo in a sketchy area in Santa Ana? You probably wouldn't feel safe as a woman driving down alone there at night. I can put my wife and kids in any home in Forsyth County and would feel safe. I would have no problems moving into that 5 bedroom. The caliber of tenants you will find in Santa Ana vs Forsyth County is going to be night and day. 
Click to expand...

I never said Santa Ana.  I have a condo in Foothill Ranch that I purchased for $375K a few years ago that gets $2600 a month.  Very nice community and great tenants.  Today, that condo is worth $475K.  With 25% down, your all in costs are $2500 a month.  Your return on the 5b is slightly better but not substantially. 

I just assumed that cash on cash returns in your market would be in double digit range. 
Click to expand...
 
rkp said:
Panda, a quick search shows that a 5 bedroom can be had for $315K.  With 25% down, PITI looks to be $1700-1800.  $1995 rent while positive cash flow doesn't look that great.  I can get similar numbers in OC.  What am I missing?
Click to expand...

How did you get your PITI numbers?  I just plugged in zillow mortgage and see for Forsyth, GA, SFR, Investment Property, 25% down,
rate is 4.125%.  This gives a PITI $1386.

Payment (principal & interest) $1,145
Estimated property taxes $171
Estimated homeowners insurance $70

 
Error in my math.  Good catch.  I am getting ~$1600 and using 4.5% loan rate and 1.25% property tax.  I don't know that market but believe it is a variable tax rates that changes every year.  As such, it seemed easier to round up the property tax.  Also, went high on home insurance with $100 a month.

This is definitely a better cash on cash return than my foothill ranch example with about 5% return.  I have seen double digits with property manager in nice suburbs outside of Chicago and assumed Panda's market would be similar. 
 

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Have to factor in weather related expenses. It snows heavily further up which means stuff breaks down faster, furnace, roof, garage, etc. 
I was looking at great returns around Syracuse and then didn't like the idea of replacing a major item suddenly...
 
I'm getting a 1% CoC return once maintenance, repairs, and capital reserves are factored in.  Do the tenants in Georgia mow the lawn?  Do vacancies ever occur?

Basically you are getting a 1% CoC return and another 4% from amortization.  This is not a good cash-flowing investment, but I believe the purpose of Panda's venture is to capture future appreciation via the number of Asians moving into this area over the next 20 years.

That could very well happen, but if you look at the 20 cities that S&P Case/Shiller tracks, the top 3 for appreciation since 1980 have been San Francisco, Los Angeles, and San Diego.  If you are going to make an appreciation play, why not stick with proven winners?  Georgia appreciates at the rate of inflation.  California beats inflation by 1-2% per year.  Irvine has exceeded the average for California by maybe another 0.5-1% per year.  It is similar to San Francisco in that regard.

Irvine didn't just increase in value due to good schools and the number of Asian buyers over the past 35 years, it also happened to be located in a top three area in the nation for home price appreciation.  It is hemmed in by mountains to the East and the ocean to the West.  Does Johns Creek have geographic constraints on future development like LA, SF, and SD?  I don't think it does.

The proximity to jobs and culture for Johns Creek is about a 1 hour drive to downtown Atlanta, making it a similar trek to those that commute from Riverside to visit OC/LA for jobs and culture.  I know because my best friend lives nearby in Gainesville, GA and he has to drive to Atlanta anytime he wants to do something fun (sports, concerts, ethnic food, etc).  I get tired of the drive after just visiting him for a week.
 
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