Qwerty and Trojan how viable is Panda's 8 year investment plan in Johns Creek

Am I the only one who thinks of this when people talk about Vega for options?

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Panda said:
Akim,

No business is easy and without risk. If this was the case, everyone would leave their full time jobs and start a business. Regarding JC and ATL market, i never mentioned that i see a 300% appreciation like Irvine from 1996 - 2006. In Atlanta, you can buy properties for cash flow or maximum appreciation. I am however optimistic that JC's home values will double in 10 years. Right now it so much cheaper to buy then to rent in Johns Creek. If I were to leave my current residence and rent it out, it would rent out within a week for $3000. My total carrying cost on the home $2400/month. Look at the link of the 2500 sq/ft Irvine SFR in Fox Hill my wife used to live at when she was in junior high. The home trades for $750,000 but the rent is $3000. This tells me that the properties in Irvine is grossly overvalued.

Akim, I never shared with you my failures as an land lord / investor did i? I rented my townhome that i purchased in 2004 in Chicago in June of last year and i had a major flood two weeks after I moved. I didn't have flood insurance so I had to come up with $15,000 out of pocket to DEMO and restore the basement. To makes matters worse, I didn't screen my tenants properly who avoided my calls and provided me with every sob story you can imagine not to pay rent. I asked the Lord that i would not take these people to eviction court, and he faithfully answered my prayers.

I purchased a 3500 sq/ft SFR next to Sugarloaf Country Club at the peak of the market in 2006 at $546,000. The  appraisal value of that home is $400k if i were to sell the property today. What a terrible way to start a rental business right? What saved me with this property is that by God's grace, i had a CEO of major retail chain in Atlanta rent from me for the past 6 years for $3000/month. My carrying cost on this home is $2350. Again, by God's grace, I was able to replace the bad tenant with a mother who is trying to get back on her feet from a harsh divorce. She is a VP of a major financial institution in Chicago and both my tenants make more money than i do. My new Chicago tenant called me yesterday asking me if she could remodel the kitchen on her dime with some really nice granite counter top. She is also paying me $2,180 while my orginial listing rental price was $2000/month. This is what i call Grace.

With two major set backs like this, I might as well quit now right? Not a chance. I am more driven to succeed, screen for the right tenants, lock in a low 30 year fixed rate, and follow through on my 8 year plan for this SFR rental business.


 

akim997 said:
first...  30 year treasury isn't the risk free rate...  90day T-bill is standard...  but you might as well use 0% for now (and the near future)...  a lot of CMAs (capital market assumptions) have been adjusted to reflect this.

second...  Tbills are not bonds.  They are zero's that are 1yr or less. 

I work and talk to people from Coke.  Even people from the area will agree that the aTl /JC /GA will likely NEVER experience the same type of growth (and RE appreciation) that SoCAL did (or Irvine from 1960's to today)...    I agree with IHO in that it's a bit ridiculous to even speculate like that. 

I've helped my family who has lived off RE investing for decades (since my dad passed) and I think it's a pretty difficult venture...  Personally, I don't see the risk/return proposition...  I feel I can make more money at work, with less at risk (no capital investment, just human capital - my time)...    Managing RE - it's tedious..  if it were rewarding enough, it could be a full time job (it's my mom's and she's over 70!)...  I'm trying to get my mom out of the business for her sake - dealing with tenants, repairs, etc. can be quite a lot of work (at least in a 9 unit apartment) - there is ALWAYS something going on.  If what people are saying is true and that 9 houses is more difficult than a 9 -unit you should be prepared for the worst.  I will agree with what they say that the multi unit is such that the vacancies and non-performers are mitigated by paying tenants (diversification).  Over past 2 years there has been a delinquent or vacant apartment at least every other month.  I realized that RE is capital intensive, and its easier if you have a lot of money (we don't have a lot of free capital).   
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Thanks for sharing Mr Panda.  Foxhill?  That's Deerfield - my wife actually grew up in the same neighborhood (Sunset River) maybe they know each other? (She went to Venado and Uni).  Familiarities aside, I really respect your drive - and I can relate to most of what you shared.  It's funny, you want to believe people are generally good, but you find out real fast that there's a lot of rotten people out there.    We've had people steal doors, knobs, etc.  when leaving - trashing this breaking that...  I've driven to LA 3-5 days a week to track down dead beats, and I've heard the best (or worst) stories.    Eviction - good luck...  we've placed judgements, but most time never see another penny.  We've gotten lucky with timing and location, but it's not an easy road.  One property is in a bad area of town, and its prospects are not looking good.  One saving grace to it all is what you mentioned.  All these properties were long term investments where the rents created income and loan principal was paid off to where all properties were held free and clear - at which time you have a good income stream (until I screwed things up from a tax perspective - but that's another story)...

Overall, it sounds like you are doing your homework - good luck
 
Akim, I also respect that you are doing everything you can to relieve the responsibility of your aging parents. I can relate.

Yeah Deerfield, that's right. My wife went to Venado as well.

What you wrote is the reason I am not interested in investing in multi-family and apartments and want to focus primarily on SFR investments. I've been wanting to do something like this for a longtime, but i knew I couldn't execute this plan in Irvine. In the right location within a good school district you will attract a good quality tenant who will stay and take care of your home for a very long time. Selecting the right responsible tenants, who pays you on time, takes care of your home and who will stay in your rental for a very long time is the key of making this a fun and profitable business. 

If you own a small business, your real estate invesment holdings will shield you and bring down your net profit considerably to minimize your tax liability, especially if your CPA will allow you to be classified as a real estate professional. 
 
Maybe you should have stayed somewhere on the West Coast where prices have tanked but the hood and schools are reasonably okay because that's where all the Asians migrate to.

Not knowing anyone in JC... how did you end up targeting that area?
 
Not knowing anyone in JC... how did you end up targeting that area?
http://www.johnscreekga.gov/about/about/demographics

Asians move east of Irvine to the Inland Empire because they can no longer afford the housing in the coastal areas. So they settle for the second tier areas of West Coast. A popular relocation destination for Californians to move out of state is Texas. I'm not too fond of Texas as properties taxes are in the 2-3% range, doesn't have the natural green, mountain beauty as Georgia, and weather in the summer and winter months in Texas are bit more extreme than Georgia.

One of my top ten real estate books I've read is by David Lindahl: Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. What he discribes in this book is where Johns Creek is today in its RE life cycle. JC is the tier #1 location in Georgia. There are just so much similarities between LA County/OC County and Atlanta metro/Northern Atlanta but I will write about it when i have more time. I see metro Dallas and Houston also becoming winners in the next 8 years.   
 
Chino Hills, Brea and Fullerton. Ontario eventually in 15 years for SoCal area. These are all 3rd Tier and Irvine is second Tier.

Panda said:
Not knowing anyone in JC... how did you end up targeting that area?
http://www.johnscreekga.gov/about/about/demographics

Asians move east of Irvine to the Inland Empire because they can no longer afford the housing in the coastal areas. So they settle for the second tier areas of West Coast. A popular relocation destination for Californians to move out of state is Texas. I'm not too fond of Texas as properties taxes are in the 2-3% range, doesn't have the natural green, mountain beauty as Georgia, and weather in the summer and winter months in Texas are bit more extreme than Georgia.

One of my top ten real estate books I've read is by David Lindahl: Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. What he discribes in this book is where Johns Creek is today in its RE life cycle. JC is the tier #1 location in Georgia. There are just so much similarities between LA County/OC County and Atlanta metro/Northern Atlanta but I will write about it when i have more time. I see metro Dallas and Houston also becoming winners in the next 8 years.   
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irvinehomeshopper said:
Chino Hills, Brea and Fullerton. Ontario eventually in 15 years for SoCal area.
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North Tustin? :D

Panda said:
One of my top ten real estate books I've read is by David Lindahl: Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. What he discribes in this book is where Johns Creek is today in its RE life cycle. JC is the tier #1 location in Georgia. There are just so much similarities between LA County/OC County and Atlanta metro/Northern Atlanta but I will write about it when i have more time. I see metro Dallas and Houston also becoming winners in the next 8 years.   
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Is there anything in SoCal? I'm just not sold on the weather and locale of ATL... remember I do have friends who live there and as much as they like to say life is great over there... the recognize the dominance of the Wesaaayyeeeed climate and location. Same with Houston... my relative must of read the same book because they packed up and bought a huge house there... only stayed 2 years and moved back to Orange County... lost money on their home that they tried to rent out and eventually short sold.
 
I'm not an OC cheerleader, and I've seen many beautiful places in the world, but OC is a place I love to call home. The weather, location, and the natural beauty of the area still gets me even after almost 20 years. From the hilly views from Aliso Viejo, to the wide estates of Coto, to the beaches of Dana Point to Newport Beach, there's just a lot of great places to live in OC. I was driving down Jamboree today to meet with some contractors for a meeting in CDM, and you know that point where Jamboree hits PCH, I got a little glimpse of Balboa Island and the water and sun, I just thought to myself "I am a lucky human being to be able to live here."

This is not meant to trash or down any community mentioned in this thread (especially not Johns Creek), but no place seemed more like home to me than Orange County in all of my travels.
 
IHO, don't get me wrong. I love OC, Irvine, and all along the coast and if all things were equal I would leave Johns Creek in a heart beat for Irvine but we all know that is not the case. I have a friend from college who now lives in Irvine and he is born into money. He works for his rich dad and he lives a nice life in Irvine. For me, it is a cost issue, value issue, and a career issue. To purchase a home i wanted in Irvine just didn't fit my values.

I think the city you live in says a lot about you. Sort of like the car you choose to drive. I like the four seasons, but hate the Chicago snow. The December, January weather in Atlanta was surprisingly very warm averaging in the low 60s. I think my conservative values also fits more with the south than the west coast. Simply put.. I think if you have a lot of money or you have a high paying salary job... OC/Irvine is a wonderful place to live. If you are an entrepeneur, funding your business from your own pocket and want to build real estate investment business, Irvine is definitely not the place for that in 2012.



irvinehomeowner said:
irvinehomeshopper said:
Chino Hills, Brea and Fullerton. Ontario eventually in 15 years for SoCal area.
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North Tustin? :D

Panda said:
One of my top ten real estate books I've read is by David Lindahl: Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. What he discribes in this book is where Johns Creek is today in its RE life cycle. JC is the tier #1 location in Georgia. There are just so much similarities between LA County/OC County and Atlanta metro/Northern Atlanta but I will write about it when i have more time. I see metro Dallas and Houston also becoming winners in the next 8 years.   
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Is there anything in SoCal? I'm just not sold on the weather and locale of ATL... remember I do have friends who live there and as much as they like to say life is great over there... the recognize the dominance of the Wesaaayyeeeed climate and location. Same with Houston... my relative must of read the same book because they packed up and bought a huge house there... only stayed 2 years and moved back to Orange County... lost money on their home that they tried to rent out and eventually short sold.
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I could only think of several coastal and scenic places with unique topography meets the water. Sausalito, Monterey, PV, Del Mar and Carmel. None of which has the islands beyond the land meets water transition.
 
:'(I wasn't telling you to live in Irvine.

I was telling you to live/invest in the West Coast so you're closer to your friends and relatives in Irvine.

I think you're more Wesayeeed than Durrty South.

If I had billions like IndieDev... I would be closer to the beach (and I don't mean Laguna Altura).
 
Panda if you don 't mind long distance driving North Tustin is a good choice for your money. You can freeloader off Irvine at others expense. Just make sure Mrs Panda not to wear the Darth Vader shield while driving in the neighborhood with no street lights.
 
Panda said:
I see tenants as my employee
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I'm just a simpleton (don't mind admitting so) and not business-savvy like you & everyone else here in this thread... but I view the person paying as the boss. The customer is the boss. Imo, you work for them. You serve their needs in exchange for payment. You are their "employee". Renters must also take great care in selecting a reputable landlord. I was surprised to read you view tenants as your employees. I value your posts here and will have to let that idea sink in some more.
 
Here is the Georgia State rankings of 400 high schools. The city of Johns Creek currently has 3 high school clusters: Northview HS (Uni) rank #1 in the state , Chattahoochee rank #4 (Northwood), and Johns Creek HS rank #8 (Irvine HS).  Northview HS will become Georgia's first Asian majority high school in the next 10 years.

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Northview HS cluster is where ppsf is the more expensive, Johns Creek Technology Park (1980s Irvine Spectrum) is located here and the majority of the Asian population boom is happening right on this side area with i call the path of progress. This is the farm area that i know very well.

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Northview's zip code is 30097 which is the prestigious 92603 zipcode of Johns Creek.
 
houston? ...  been to houston...  it's a downgrade from the IE...  worst climate...  EVER.    i dont care if it's emerging, i wouldnt place a bet there.   
dallas?  meh...  know people in dallas and austin...  someone i know bought their house in dallas suburbs for $350K many many moons ago...  i think its worth $380K today...

i'm not smart enough and dont have enough time to learn any better, but i just stick with what i know. 
 
Honestly, some days I wonder why anyone really would want to move here. Investing anywhere else will probably do better.


http://losangeles.cbslocal.com/2012/02/06/taxpayer-money-used-to-maintain-million-dollar-yacht/

http://blogs.laweekly.com/informer/2012/02/la_city_yacht_mayor.php


Taxpayer Money Used To Maintain Million-Dollar Yacht

The port is using $489,000 in federal taxpayer stimulus money that is supposed to go create jobs, plus another $200,000 coming from the port ?totaling $689,000 for new engines.


http://losangeles.cbslocal.com/2012/02/08/la-county-oks-1000-fine-for-throwing-football-frisbee-on-beaches/

LA County OKs $1,000 Fine For Throwing Football, Frisbee On Beaches
 
Akim, this is reason why I moved to Atlanta over Dallas or Houston... We've got the second best K-Town baby after LA. 81 Korean Americans voted on this poll. The Koreans in New York were shocked to see the results :)


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akim997 said:
houston? ...  been to houston...  it's a downgrade from the IE...  worst climate...  EVER.    i dont care if it's emerging, i wouldnt place a bet there.   
dallas?  meh...  know people in dallas and austin...  someone i know bought their house in dallas suburbs for $350K many many moons ago...  i think its worth $380K today...

i'm not smart enough and dont have enough time to learn any better, but i just stick with what i know. 
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Because there is no K-Town in Irvine. The closet K-Town you have is Garden Grove? Nasty Place I tell ya.  :-\

Atlanta's K-Town is a hidden jewel where the shopping center are large and clean. Sort of looks a lot like what Wilshire Blvd, Olympic, and Vermont would have looked liked like back in 1982. The heart of Atlanta's Korea Town is only 15 min south of Johns Creek.

irvinehomeowner said:
Why is there no Irvine Korea Town on that poll?

That would probably be double Atlanta's numbers at the very least.
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