Please tell us a bit about yourself and your company.
My name is Bruce Ailion, have been a broker in Metro Atlanta GA for 34 years, currently with RE/MAX Greater Atlanta. In addition I am Managing Member of ATL Investors, LLC a private equity fund investing in residential and commercial property primarily in Metro Atlanta. I also provide relocation assistance to expat businesses and residents interested in Atlanta and provide referrals to other experienced brokers throughout the US.What has the property market been like this year?
Most of the investment has been from overseas investors seeking to take advantage of the highly distressed properties in the US market especially in Atlanta. Many purchases were made at 50-75% below their 2007 peak prices and at 50-60% of replacement costs. Not only were these properties bought at steep equity discounts, they generate net returns in the 7-10% range.
What do you expect to happen to the market in 2014?
Government policy continues to plague US growth where uncertainty causes business to constrain hiring and investment. This has been the slowest recovery of the past 8-10 and this from the deepest recession in the past 8-10 largely due to government policy. Employment is growing, businesses have strong earnings and balance sheets. What is needed for robust growth is tax reform and investment in infrastructure which would stimulate jobs and consumer spending. It is not going to happen prior to the November 2014 elections. Prior to the government shut down, the continuation of the Fed’s bond purchase program QE3 was in doubt, causing higher interest rates and slower growth. Most now believe QE3 which was providing wind to the struggling recovery will continue well into 2014. On a national level continued slow growth is expected. Locally economists expect Atlanta to have a robust 2014. The Atlanta economy lost over 250,000 Jobs from 2007 to 2010 and it will be 2016 before jobs are expected to reach the 2007 levels. This presents opportunities for buyers to continue to get bargains in the Atlanta Market.
Are there any "hotspots" to look out for?
For investment property the hot spot is smaller commercial properties those priced between $250000 and 3 million. Office and retail lag residential by 12-18 months and the rapid 20-35% increases in the residential market over the past 24 months is coming to the small commercial properties. We recently purchased a 6000 sq. ft. office building for $235000 in one of the 3 highest income areas in metro Atlanta. This property previously sold for $671000 in 2001 and will generate a 10% net cash return when remodeled and leased. Single family housing in the area ranges from $150-275 per square foot. Buying commercial property at $40 per sq. ft., how can you go wrong?
Many property promoters consider the expat/overseas investor as an easy target. They are unfamiliar with areas and can buy in a highly distressed area where recovery is unlikely. They are unfamiliar with local styles and preferences and can buy a product type or design that is unattractive and has physical characteristics or deficiencies that are difficult, impossible and/or very costly to cure. They are unfamiliar with construction standards and grades and can by substandard quality at a premium price. The most important factor is to have a personal representative/broker that his honest, trustworthy, reliable and committed to your financial best interests. Check online reviews, references, qualifications and credentials. Deal with experienced people, members of profession organizations, with certifications as experts in property types or areas. Too often it is not until a transaction has gone sideways that this investigation begins.
What are the major challenges faced by expats looking to buy?
As mentioned above, understanding the product and market is the biggest challenge. Here you have to rely on your local representative. There is no way to learn the market in a 2-4 month period. A second challenge is financing for a purchase. Most expats/overseas clients will be paying cash. With some form of US residency status financing can be acquired, not all lenders provide this form of lending. A good local representative will provide contacts that can provide financing. Without residency status borrowing will be difficult and very expensive, probably too expensive to make financial sense.
Can you be contacted for further information?
My full contact information is below. I am on the phone a great deal of the time, best contact method is to email 2-3 proposed times for a phone appointment, I’ll email back confirmation.
bruce at locationlocationlocation dot com