New Investor In Birmingham, Looking to Connect

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 934 votes

23h

Quote from @Matthew Heckman:

Hi all,

I'm looking for my first rental in the Birmingham area, and am working on building a strong local team. I would like to connect with investors and investor-friendly agents in the area, especially those who have familiarity with JCHA/HABD housing authorities and BRRRR experience here.

What I'm looking for:

Agents who:

- Work with investors regularly and can pull off-market leads, expired listings and comps

- Know which neighborhoods rent well to voucher tenants and can give honest ARVs

- Are comfortable writing aggressive offers on fixer-uppers

Investors who:

- Own Section 8 rentals in Jefferson County and are open to a call

- Can share what has and hasn't worked for you

A few questions I'd love input on:

1. How has your experience been with the Jefferson County Housing Authority (inspections, how long until rent starts, payment standard increases) compared with the Birmingham Housing Authority?

3. Who do you trust locally for contractors, property management or DSCR lenders

4. What are typical rehab costs per square foot for a rental-grade rehab in Birmingham right now?

Feel free to reply here or send me a message so we can connect. I’m happy to share any research or information I have as well to return the favor how I can.

Thanks in advance!

You're doing the right thing by building the team before buying. For a first rental, I'd focus on the numbers, realistic rehab costs, and having a solid PM and contractor you can trust. I'd also keep out-of-state on the table if Birmingham deals aren't penciling. The Midwest has some lower entry-price opportunities for BRRRR and Section 8, and having the right boots on the ground can make investing remotely a lot easier.

[email protected]614-418-6081

1 Reply

Austin GoetzBusiness Member

Lender · Minneapolis, MN · Member since 2026 · 24 posts · 7 votes

23h

Hey Matthew,
DSCR can be a great way to get into an investment property. 15% down payment is the minimum requirement but in some cases it can be higher like 20% or 25%. Those loans are normally going to come with prepayment penalties. If you can qualify using traditional financing, I wouldn't rule out qualifying based upon your income. You can typically get better interest rate financing that way. If you have any questions about nuances of DSCR, qualifying or want to run through the numbers I am happy to be a resource for you as someone who has experience lending all over the country. Feel free to reach out.

[email protected]952-797-2007

Magnolia Bank

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Matthew HeckmanPro Member
OP
Investor · Member since 2024 · 23 posts · 19 votes
11m
Hey Austin, I appreciate the advice, thanks for replying. Many of the properties im looking at are fixer uppers under the minimum loan amount. I plan to buy the property with cash or hard money, do the renovations to get the ARV over the minimum loan amount, and then refinance with DSCR? Is this a strategy you've done with your clients before? And would you recommend doing traditional financing like you mentioned for the refinance instead? Thank you!
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Robin SimonBusiness Member

Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes

4h

Welcome to BP!

[email protected]

Harpoon Capital514 Reviews

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Josh AndersonPro Member

Lender · Birmingham AL · Member since 2015 · 72 posts · 41 votes

4h

Matthew — welcome. Lender here, based in Oneonta, and I own rentals around Birmingham.

The thing that stalls DSCR files in this market usually isn't credit — it's condition. DSCR wants the house rent-ready. If it shows more than a couple thousand in deferred maintenance at appraisal, it gets pushed to a rehab loan instead. So on a BRRRR here, plan on a short-term rehab loan for the purchase and work, get it rented, then refinance into the DSCR.

Also watch the price point. A lot of Birmingham rentals sit under $100k and plenty of DSCR lenders have a $75k–$100k minimum loan. We go down to $50,000 on a $75,000 value because that's where a lot of this market lives.

On Section 8 — before the refi, ask the lender whether they'll use the HAP contract rent or the appraiser's market rent. It changes the ratio.

Happy to run numbers on anything you're looking at.

Josh Anderson | Simple Funding | asimplefund.com | 205-557-1226

1 Reply

Matthew HeckmanPro Member
OP
Investor · Member since 2024 · 23 posts · 19 votes
16m
Hey Josh, I appreciate the advice. That checks out with what I've noticed so far, most of the lenders I've talked to have a 100k minimum loan amount, and use appraiser's market rent. Most of the properties I'm looking at are C class fixer uppers in that 50-80k price range with an ARV above 100k, I plan on buying with cash or hard money initially and using DSCR on the refinance, renting out to a section 8 tenant. Coming from someone with your experience in the area is this strategy you've utilized yourself before, and what might you change or be cautious of going forward with this strategy? Any advice is appreciated. Thank you!
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New Investor In Birmingham, Looking to Connect

New Investor In Birmingham, Looking to Connect

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