Intro and investment summary so far (4 of 5)
My fourth city for SFRs is Montgomery, AL. This may be my favorite. There is a ridiculous rent to monthly mortgage ratio, and I'm flirting with a 3:1 on the second one ($925 rent, $311.37 mortgage). I use AHI as a property manager, and after bringing over the three properties in nearby Birmingham, they cut my cost from 10% to 8%. One is Section 8, which in my experience can work out great. There is an annual inspection with Section 8, which I find positive. Tenants don't always report needed repairs, but I would like to keep properties viewing ready and better than just livable. And Section 8 requires the tenant to pay their portion to maintain eligibility.
I used Northpointe as my lender. At this point I had to use a commercial loan since I had hit my 10 with Fannie Mae. The loan is 5.25% for five years, and can go up 2% per year for five years after that. It totals a 30 year loan. Fine enough for now, but I do need to work out a refinance soon.
Going forward, I will continue to invest in Memphis (awesome property manager) and Montgomery (awesome returns and stability between tenants and property manager). I think I'm doing with Gary (high risk between tenants and property manager) and Birmingham (unreliable tenants so far, though that could change).
So that was 11 properties in 12 months. Pretty excellent, though I nearly sapped my savings. I'm more of a grey squirrel type investor, wanting lots of streams in case one or several go bad. So this became a five part intro based on the four cities in which I invested and then part 5 doing BRRRRs with a few other guys.