I'm a new investor in rural Alabama

Starting Out
6yFollow

I'm a new investor in rural Alabama

Kyle Shepherd
Centreville, AL · Member since 2020 · 32 posts · 4 votes

Happy Wednesday everybody. I'm Kyle Shepherd. I live with my wife and two kids in central Alabama - very rural; about 35 minutes southwest of Tuscaloosa, 50 minutes south of Birmingham. Definitely “the sticks.”

Current day job is a web designer UI/UX designer and WordPress developer; I also have eight years of experience in book design and small-time publishing. I'm looking to develop recurring wealth/revenue in the rental market for a few reasons, one of which being so I can secure flexibility and funding for certain research work and writing that I need to do, but can't do right now due to time constraints (day job requires 40-60 hours per week right now).

My current goal is to have 100 doors in the next 10 years, with cashflow of at least $100 per door. Multifamily isn't a thing in my city (apart from converting a SFR to a multifamily, which I hear is not a great idea), so I'll be dealing almost exclusively with SFRs. Probably BRRRRs.

I jumped on board after a webinar Brandon gave a week or so ago on being prepared to buy your first property in the next 90 days. What sold me was the calculators + the treasure trove of back material + potential for mastermind access. Looking forward to using all these tools in the coming days/weeks/months!

2Reply
33 views

Most Popular Reply

Joshua Klein
Durham, NC · Member since 2019 · 31 posts · 16 votes
6y

Personally, 10 houses a year seems aggressive as a new guy. I'm coming out of my first project and it's taken 3 months from purchase to flipping to getting a tenant in. I'm working on the refi now. Granted, I'm working one at a time. My advice that I'm following, go slow, especially at first. I worked hard for this money, I want to ensure its spent correctly.

2Reply
See this reply in the discussion

11 Replies

Jump to latestLatest
  • Neal Coleman
    Huntsville, AL · Member since 2019 · 9 posts · 0 votes
    6y
    Kyle, I'm an investor in Huntsville, AL.  Best of luck to you.  I would recommend reading as many books as you can.  Rich Dad Poor Dad and BRRRR book are a good start if you haven't already.  Also, I would consider upping your cash flow requirement to $200/unit minimum.  Your money is made at time of purchase so you must buy properties below market value.  
    0Reply
  • Kyle Shepherd
    OP
    Centreville, AL · Member since 2020 · 32 posts · 4 votes
    6y

    Neal, I've read Rich Dad Poor Dad. That was the book that sent me off in this direction. I'm working through Brandon's book on rentals and then his book on buying properties for no/low money down. Want to get to BRRRR book soon. I also know my own tendency to read and read and read and never actually take action, so I want to avoid that too.

    I'm open to upping cash flow requirement to $200/unit, but can that be done with older houses in small-town Alabama in the country? The area I will be working in is not affluent. I'm not operating in Tuscaloosa or Birmingham. Many houses are between 40-80 years old and will be fixer-uppers. (I'm not going to purchase any properties unless the numbers work.) Rent rates are routinely between $550-850/mo however. It may be doable.

    0Reply
  • Account Closed
    New to Real Estate · Gulf Shores, AL · Member since 2019 · 6 posts · 3 votes
    6y

    Welcome Kyle. I'm a new investor down in Gulf Shores. I'm almost exactly where you are in my journey. I've read BRRRR and Brandon's Rental Property Investing Book. Currently on No and Low Money Down (financing will be my biggest hurdle). Good luck in your future!

    0Reply
  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    6y

    Hey guys. Congratulations on wanting to get started. Kyle, your target range is definitely realistic. My last deal is in a small community East of Dothan, Alabama. It was 1100 ft² 3BR/1.5 B brick ranch bought for 34k off of the MLS. It didn't need too much work, just paint, flooring, AC, some new fixtures. We did convert the 1/2 bath to a full in the master. we put 15k into it. Our mortgage, insurance, tax, etc are 350 a month. House went on market this month and have a tenant at $700 a month. This was my third deal. No special friends or favors from contactors, just applying what I learned from BP and talking to other investors. My advice: get standard, normal houses, no funky layouts. Find your contractors before you have your deal. The holding time is a killer. Get your financing lined up, and make some offers and get started. Use this virus deal to negotiate some discounts. Let me know if I can help you guys. Good luck.

    Clint 

    0Reply
  • Joshua Klein
    Durham, NC · Member since 2019 · 31 posts · 16 votes
    6y

    Personally, 10 houses a year seems aggressive as a new guy. I'm coming out of my first project and it's taken 3 months from purchase to flipping to getting a tenant in. I'm working on the refi now. Granted, I'm working one at a time. My advice that I'm following, go slow, especially at first. I worked hard for this money, I want to ensure its spent correctly.

    2Reply
  • Neal Coleman
    Huntsville, AL · Member since 2019 · 9 posts · 0 votes
    6y

    @Joshua Klein this is great advice. This business is a lot of hurry up and wait. Contractors are a pain to deal with. Drive around and look for guys working on houses and stop and talk to them.

    0Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y

    I invest in some small towns in Georgia so I'm familiar with your situation there next door. We buy houses cash, fix them up ourselves and get them rented. Our model probably wouldn't work for you as we do it full time and don't have a W2 job. By not having loans on the properties, obviously the cash flow is higher. I have no desire to have 100 properties ever and we don't need that many to live on. We will stop short of 20.

    A lot of houses in these rural areas don't have central HVAC and I've recently discovered most insurance companies won't insure a property without central heat. The gas/propane space heaters a lot of these old properties have are uninsurable. The problem is that to put in HVAC at the low rural rent numbers, it would never pay off. We have 2/1 houses that are rented for $400. That will get slowly increased but that's just the reality of the less affluent areas here in the SE USA.

    0Reply
  • Kyle Shepherd
    OP
    Centreville, AL · Member since 2020 · 32 posts · 4 votes
    6y

    @Clint Shelley then you know what I'm talking about when it comes to small-town Alabama. That's my goal: normal houses, purchase between $30k and $80k, SFRs, older homes (out of necessity) which need fixing up like paint/flooring/hvac/etc., then rent out for $600-850/mo.

    0Reply
  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    6y

    I convert all of my houses to central heat and air as well. I know several local investors that have a ton of units and some with just a few. I think 25 to 30 is the sweet spot. I have a goal of 100 as well but that is to "fall short" at 30ish. Im also starting to flip land. My shirt term goal is to have 5 rental houses mortgage free before I get too far down the road. I like that position like John mentioned.

    Clint

    0Reply
  • Caleb Bryant
    Rental Property Investor · Huntsville, AL · Member since 2015 · 401 posts · 309 votes
    6y

    Hey @Kyle Shepherd, welcome to the RE game. I would be learning about creative deal structures. Lease options, sandwich leases, subject to's. I've used all these successfully in northern rural Alabama and even down into Birmingham. I also know lot's of investors killing it in the southern Mississippi rural areas. 

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    6y
    Originally posted by @Kyle Shepherd:

    Happy Wednesday everybody. I'm Kyle Shepherd. I live with my wife and two kids in central Alabama - very rural; about 35 minutes southwest of Tuscaloosa, 50 minutes south of Birmingham. Definitely “the sticks.”

    Current day job is a web designer UI/UX designer and WordPress developer; I also have eight years of experience in book design and small-time publishing. I'm looking to develop recurring wealth/revenue in the rental market for a few reasons, one of which being so I can secure flexibility and funding for certain research work and writing that I need to do, but can't do right now due to time constraints (day job requires 40-60 hours per week right now).

    My current goal is to have 100 doors in the next 10 years, with cashflow of at least $100 per door. Multifamily isn't a thing in my city (apart from converting a SFR to a multifamily, which I hear is not a great idea), so I'll be dealing almost exclusively with SFRs. Probably BRRRRs.

    I jumped on board after a webinar Brandon gave a week or so ago on being prepared to buy your first property in the next 90 days. What sold me was the calculators + the treasure trove of back material + potential for mastermind access. Looking forward to using all these tools in the coming days/weeks/months!

     Welcome aboard Kyle.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free