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DaniellaCast…, Real Estate Pro in Atlanta, GA

how to find out about rental cap on a building in Atlanta GA?

Asked by DaniellaCastroKW, Atlanta, GA Thu Jan 19, 2012

how do I find out whether a rental cap has been met on a building prior to seeing the property? want to buy rental property but most building have a rental cap

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13
Sarah is right.

How many townhouse, condo or loft investments do you currently have in your portfolio?

If your answer is "none" then you should reset your goals and stick to single family or multi family properties for investment - almost all attached residential properties in almost all submarkets in Georgia are almost all full of the maximum amount of landlords - your pursuit of a perfect property in this category, at probably some bargain basement price, is a waste of time, pretty much.

I only have heard about one grandfathered, landlord rights deal on a short sale. It's a quiet listing in the Aqua building in Midtown - it'll sell in the $160s.

I see the inside of about 30 or more condos, lofts and townhouses every month in and around Atlanta and Decatur and in the past year, that's the ONLY deal I've run across...

The best plays in this category are in "lawless" communities with no HOA governance and nothing but pure upside for a wholesale community turnaround that just one or a few investors control - good luck if that's the direction you are going in, because on one of these, a new sheriff in town needs to be well capitalized...
1 vote Thank Flag Link Thu Jan 19, 2012
Your bigger problem in most cases is not the # of rentals but the delinquency rate on the HOA dues. All lenders FHA, VA, FANNIE MAE and FREDDIE MAC will not approve a condo association with more than a 15% delinquency. This makes most condos near impossible to buy.
However, there is a solution. Look into homes listed on http://www.homepath.com these are FANNIE MAE homes that have already been foreclosed on. They are automatically approved whether they have excessive renters or HOA delinquencies. They also offer super deals.
Primary borrowers, can as little as 3% down and have NO PMI.
Investors, can put as little as 10% down. The website will also indicate if they offer Renovation Money to be included in the purchase. You can add 35k or 35% (which ever is less) you would still only put down the same low down payment % but on the total renovated price.
I am proud to say we are one of the only lenders allowed to offer the HOME PATH Renovation loans.
For more information please call me at 678-578-7613
Best Wishes,

Robert Robbins
Senior Mortgage Professional
Cornerstone Mortgage Group, LLC.
Office 678-578-7613
Cell 404-932-5353
Web Reference: http://www.homepath.com
0 votes Thank Flag Link Sun Jan 22, 2012
I have a lender that doesn't care about rent caps. So, if you're still interested in the property, let me know. If you decide to go elsewhere, the loan officer will send a condo questionnaire to the management company (for about $200) and get all the facts required of that lender. Every lender has it's own requirements for condo's, so you may think you're in the clear with a 20% rental capacity, but then the lender you chosen caps at 15%. Other things banks looks at are the completion of the project, the reserves of the association, and the delinquenciy of the tenants among other things. Condo's are high risk investments right now because if the renter's owners stop paying the HOA dues and the people who lose their job stop paying the dues, guess who makes up the difference? Those left behind and those left behind end up paying 2 or 3 times higher HOA dues.
0 votes Thank Flag Link Thu Jan 19, 2012
The best way is to contact the HOA. This is usually found on the MLS listing. Alternatively, you might try googling the building name/location, or visit the building and see if you can find a clue in the lobby or if the management company has a sign outside the building. If you know any tenants or owners, they should be able to help you too. Good luck!
0 votes Thank Flag Link Thu Jan 19, 2012
You would have to contact the management company for the HOA. To comply with industry lending guidelines, every condo association should have an investor concentration cap.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Thu Jan 19, 2012
Get your license and get busy - call me if you want to discuss a real estate career, OK?
0 votes Thank Flag Link Thu Jan 19, 2012
Dctwinmomma,

Just assume the rental cap has been met and there is a waiting list. Few and far between is the association that is not capped(don't even worry about the unregistered renters). Why the focus on condo? Many times Hoa's, etc eat into cash flow. Be happy to talk to you about maximizing your investment $. You may want to consider alternative property classes depending upon what you goals are. Good luck!

Best Regards,

Frank Brockway
Brockway Real Estate Consulting
Keller Williams - In Town Atlanta
Tel: (404) 787-2253 | Fax: (404) 974-2616
Email: frankbrockway@kw.com
http://www.frankbrockway.com
0 votes Thank Flag Link Thu Jan 19, 2012
Hi Dctwinmomma,

The best way is to call the homeowner's association. Most of the townhomes and condo's have rental caps or will not allow renting at all. Be aware that HOA's can assess huge fines on homeowners that rent out their property without approval.

My Best,
Janette
0 votes Thank Flag Link Thu Jan 19, 2012
Thank you- I am actually studying to get my real estate license as well as considering buying a rental property- so the only way is to call the HOA from each building directly? where is that information found when looking at a listing online? do I need to be a realtor or have my RE license in order to find that information?
0 votes Thank Flag Link Thu Jan 19, 2012
The only sure way to find out is to contact the Condo Association. Generally condos have a 25% limit due to lenders' unwillingness to do a loan if it's higher than that. One option can be finding a place that is already rented. There are a few good investment properties in Atlanta that do not have restrictions or each building is set up to have their own restrictions. As you can see it gets complicated. If I can help in any way feel free to shoot me an email or give me a call.
David Bottomley
Keller Williams Atlanta Intown
0 votes Thank Flag Link Thu Jan 19, 2012
if you are working with an agent, then they may be able to get you the oocupancy rate and cap info.
Then you can always calculate the cap rate of that property and similar sold properties to determine the value.
Or you can just try ask the owners of the property....

LaQuita Baez
Better Homes and Gardens Real Estate Metrobrokers
Direct: 770-901-0956
Web Reference: http://www.LaQuitaBaez.com
0 votes Thank Flag Link Thu Jan 19, 2012
PS: I would be able to help you find what you are looking for because I have done extensive research for investors. Just let me know how I can assist you in your search.

Sarah Mercer Chatel
Web Reference: http://sarah-sells.com
0 votes Thank Flag Link Thu Jan 19, 2012
Unfortunately, most condos are changing their by-laws to prohibit a certain percentage of their community from being rented. I believe this is harmful for the community in the long run because it forces many into short sales or foreclosure because they can't sell to an investor.

The only way to find out is to call the COA or HOA and ask.

Hope this helps.
Web Reference: http://sarah-sells.com
0 votes Thank Flag Link Thu Jan 19, 2012
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