Anyone buying in Birmingham, AL? (1% rule)

Anyone buying in Birmingham, AL? (1% rule)

Real Estate Broker · Southern California · Member since 2021 · 7 posts · 6 votes

A friend of mine is wanting to sell their rental and I figured that I'd check in to see if anyone is buying. The home has been remodeled and is ready to rent.

Asking price $115,000

Rent they were receiving was $1,150

3 / 2 / 1,440 sq ftLet me know and I can make a connection.

We've got the realtor handled - just wondering if this is the type of deal that anyone is looking for.

3Reply
293 views

Most Popular Reply

Jason CoryPro Member
Real Estate Broker · Birmingham, AL · Member since 2018 · 266 posts · 384 votes
8mo

Birmingham, like every other market has softened unfortunately. You may want to prepare your friend for the reality. None of my clients will look at property at 1% anymore. Too much supply on the market now where they can buy & essentially pull all their money back out on a refi. That is the buy/sell market. The house I rented yesterday from my PM company forced me to offer a month free & lower the rent from $1,100 to $1,050 to get interest & rented. The owner purchased it for $60k from the MLS in December, $10k rehab, & refi'd at $110k.

I truly hope your friend gets to sell for asking price but thought you should be aware of the current market in Birmingham.

See this reply in the discussion

7 Replies

Jump to latestLatest
  • Jason CoryPro Member
    Real Estate Broker · Birmingham, AL · Member since 2018 · 266 posts · 384 votes
    8mo

    Birmingham, like every other market has softened unfortunately. You may want to prepare your friend for the reality. None of my clients will look at property at 1% anymore. Too much supply on the market now where they can buy & essentially pull all their money back out on a refi. That is the buy/sell market. The house I rented yesterday from my PM company forced me to offer a month free & lower the rent from $1,100 to $1,050 to get interest & rented. The owner purchased it for $60k from the MLS in December, $10k rehab, & refi'd at $110k.

    I truly hope your friend gets to sell for asking price but thought you should be aware of the current market in Birmingham.

  • Rental Property Investor · Grapevine, TX · Member since 2020 · 139 posts · 54 votes
    8mo
    Quote from @Kara Courtney:

    A friend of mine is wanting to sell their rental and I figured that I'd check in to see if anyone is buying. The home has been remodeled and is ready to rent.

    Asking price $115,000

    Rent they were receiving was $1,150

    3 / 2 / 1,440 sq ftLet me know and I can make a connection.

    We've got the realtor handled - just wondering if this is the type of deal that anyone is looking for.


     I'm looking for my next Birmingham rental. Depending on the area I'd be interested. What zip code is the property in? 

    • Real Estate Broker · Southern California · Member since 2021 · 7 posts · 6 votes
      8mo
      Quote from @Michael Ewers:
      Quote from @Kara Courtney:

      A friend of mine is wanting to sell their rental and I figured that I'd check in to see if anyone is buying. The home has been remodeled and is ready to rent.

      Asking price $115,000

      Rent they were receiving was $1,150

      3 / 2 / 1,440 sq ftLet me know and I can make a connection.

      We've got the realtor handled - just wondering if this is the type of deal that anyone is looking for.


       I'm looking for my next Birmingham rental. Depending on the area I'd be interested. What zip code is the property in? 

       It's in 35221

    • Rental Property Investor · Grapevine, TX · Member since 2020 · 139 posts · 54 votes
      8mo
      Quote from @Kara Courtney:
      Quote from @Michael Ewers:
      Quote from @Kara Courtney:

      A friend of mine is wanting to sell their rental and I figured that I'd check in to see if anyone is buying. The home has been remodeled and is ready to rent.

      Asking price $115,000

      Rent they were receiving was $1,150

      3 / 2 / 1,440 sq ftLet me know and I can make a connection.

      We've got the realtor handled - just wondering if this is the type of deal that anyone is looking for.


       I'm looking for my next Birmingham rental. Depending on the area I'd be interested. What zip code is the property in? 

       It's in 35221


      Thank you! 35221 is in my no buy zone. The surrounding areas are too much for us to risk a rental in the area. Which makes sense because some houses in that part of town are 1% Rule. I focus buying in 35235, 35040, 35023, 35210 for my rental requirements. There's a ton of investors who do buy in 35221. Facebook groups work great to find those buyers to make it easier. Hope that helps!  

  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 378 votes
    8mo

    That's a solid property for what it is. 15k for a ,150 rent is right on the 1% rule, which is the floor for a decent cash-flowing rental. The numbers are clean -- a 3 bed 2 bath in Birmingham at that price point has real value.

    Real question though: what's the condition? You mentioned it's been remodeled, but I'd want to know about the roof, HVAC, electrical, plumbing. I've bought a ton of rentals that looked move-in ready but had k-2k in deferred maintenance hiding behind fresh paint. Also check the tenant history if there are current tenants. If it's been renting for a while at ,150, is that locked in on a lease or month-to-month?

    Birmingham's a good market right now for buy-and-hold. The market's stable, rents are climbing, and cap rates are reasonable. If the bones are solid and there's no major red flags, this could work. What's the plan for financing -- cash, conventional, or something else?

    • Real Estate Broker · Southern California · Member since 2021 · 7 posts · 6 votes
      8mo
      Quote from @Bo Smith:

      That's a solid property for what it is. 15k for a ,150 rent is right on the 1% rule, which is the floor for a decent cash-flowing rental. The numbers are clean -- a 3 bed 2 bath in Birmingham at that price point has real value.

      Real question though: what's the condition? You mentioned it's been remodeled, but I'd want to know about the roof, HVAC, electrical, plumbing. I've bought a ton of rentals that looked move-in ready but had k-2k in deferred maintenance hiding behind fresh paint. Also check the tenant history if there are current tenants. If it's been renting for a while at ,150, is that locked in on a lease or month-to-month?

      Birmingham's a good market right now for buy-and-hold. The market's stable, rents are climbing, and cap rates are reasonable. If the bones are solid and there's no major red flags, this could work. What's the plan for financing -- cash, conventional, or something else?


       There are no tenants in there now, but they were getting $1,150/mo.

  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 378 votes
    8mo

    Jason's being honest with you, which I appreciate. The 1% rule is dead in most markets, and Birmingham is no exception. At 15k asking with ,150 rent, you're looking at 1% -- but as a buyer you're also looking at 25-30% of monthly rent just hitting your reserves and maintenance in a real market. That deal gets thin fast.

    The soft market Jason described is real. There's tons of inventory, and owners have optionality that didn't exist two years ago. If someone can buy, rehab, and cash out 10k on a 0k purchase, that changes the rental comp completely. Your friend's property is now competing against properties with fresh capital and refinance cash backing them. Asking price matters a lot less than actual market rent today.

    Is your friend willing to sit on this rental, or is there pressure to sell? That changes the conversation a lot.Ican see situations where it makes sense to hold a 15k deal with ,150 rent in a market like Birmingham if she's willing to let it stabilize for 24 months, but if there's pressure to move it, she might need to get realistic about price.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.