Case Study: Savannah 3-Bedroom Proves the “Pandemic Market” is Still Hot

Think you can’t get involved in real estate investing as a new investor because the market is too hot to handle right now? Think again. PIP Group’s May 2020 Passive Profits Case Study just shows that the best kind of property to own right now is a modest single-family that buyers can’t wait to buy and tenants can’t wait to lease.

Here’s the story:

In December 2019, we acquired a 3-bedroom/1-bath home in the area of Savannah’s Cuyler/Brownville neighborhoods. We knew this property had a lot of promise. The area is highly walkable with a Walk Score of 80, and the property itself has an elementary, middle, and high school all within about a mile. Additionally, the house is located across the street from a small park. We invested about $22,000 in new windows, fresh paint, gorgeous (but affordable) luxury vinyl plank (LVP) flooring, a bathroom upgrade, and stainless steel appliances. In the middle of the process, however, COVID-19 hit the United States. We wondered how that might affect our ability to sell the home, but it turned out the demand for affordable, single-family housing went through the roof. We were able to sell quickly for a net profit of just over $14,000 and a 10 percent cash-on-cash return (annualized at 23 percent). Our investors were thrilled and we realized we had proven our theory that this economic downturn would not be housing-based as the last one was. We continue to acquire affordable single-family properties in the Savannah area with confidence, knowing that the area is recession-resistant thanks to the industries there that revolve around the Port of Savannah and Georgia’s investor- and business-friendly state policies.

How to Spot Opportunities in Hot Markets

Now that I’ve showed you that the market is still open for real estate investors, let’s talk about how you might get started. Savvy investors know that it can be hard to break into a “hot” market, and the entire single-family sector is definitely hot right now. With the intense competition among buyers for any home, it can be difficult to buy at the price points that would enable an investor to generate returns. Fortunately, you do have options.

You might have noticed our case study from May is titled the “Passive Profits Case Study”. What that means is that the investors in the deal were passive investors. They essentially provided capital for investing and then PIP Group handled everything else, from identifying the property to acquiring it, handling the renovations, and selling it. That meant that our investors were able to leverage the advantages we have as a company with decades of presence in the market (not to mention the advantage of scale compared to an individual investor) and simply waited for their returns, which appeared ahead of schedule and in the form of that healthy 23 percent annualized return.

If you think that passive real estate investing like this might be a good fit for you, let’s talk about how it works. PIP Group offers potential investors plenty of free education on the topic, and we also conduct free consultations with every investor to make sure your goals and ours align. If they do, then you could be on your way to investing in one of the hottest markets in the country!

Learn more about Savannah, Georgia, real estate, passive investing, and other Passive Profits case studies at PIPGroup.com.

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About the Author

Charles Sells is the founder and CEO of The PIP Group, a turnkey service provider that focuses on investments in distressed real estate assets including tax liens, tax deeds, traditional foreclosures, fix-and-flips and long-term cash flow acquisitions. He has been involved in tax lien investing for over 20 years, during which time The PIP Group has grown to become one of the largest agencies of its kind with nearly 1,000 individual and institutional investors worldwide.

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