@Sara Hodge you have gotten some very nice responses from most of the active turn key folks in the area .. and active investors that have purchased there.
I started lending there in 2005 with a few of the turn key operators.. I quite like B ham as a market and I am one who tends to favor the stronger B class.. but I like topography of the city compared to some of the other mid west towns that are flat... West coast bias I guess.
However I know the guys I have worked with there and those 65 to 75k B's are pretty neat houses for the money.. many are mostly brick have nice under grade parking and bonus rooms.. real hard woods that get refinished... Nice stuff .. Oh and big lots
I do disagree a little with the lady who said the hedge funds have not found B ham they have.. its not blackstone or Colony but there are institutional investors there..
Joey Noel and Jim Workman are true retail turn key investors I would feel comfortable with their feedback and impressions.
I'm from Birmingham originally and I lived there for over 30 years. I love this topic because I'm also looking to buy some turnkey properties in the area. I actually put a contract on 3 houses earlier this year with one turnkey company. It did not go well once I hit the inspection process. Send me a private message if you would like to know the company name. I would not recommend using them.
I will definitely be checking out some of the other turnkey companies mentioned in this post! Thanks for asking the question and thanks to all who gave their feedback.
@Bradley Cordell hi thanks for your comment, you have a beautiful family! I definitely want to learn about B-ham from you... you have such an advantage being home-grown there... I'm so sorry about your previous exprerience, but I just sent you a message with the info for the company we are using. My husband and I dug VERY deep to find a great team, so feel free to reply or ask any questions about our experience. I bet if you interview them, you'll be much happier. :) -Sara (also my husband here is @David Hodge , feel free to connect, as we are both excited about our Bham investment!)
@Jeanie Choi you got it, Friend! I will send you a colleague request and private message right now with all their info! So far we are SUPER happy with them, and would be glad to let you know how it all goes when we close escrow with them too. :) -Sara
@Jeanie Choi just sent it to you!
Originally posted by @David Hodge :
@Jim Workman yes, let me know how they are once they visit. We probably won't do section 8 for our first couple homes but possibly down the line. @Sara Hodge doesn't just live in my town, she lives in the same house as me! I know, I lucked out on that one! :D Thanks for all the great feedback!
David I am also considering out of state investing. Would you mind sharing any info on turnkey companies you recommend. Im looking for my first property. thank you
@David Nadelstumph - @David Hodge just left for work, but we already have a couple people or companies we can tell you about! (we've already had good and bad experiences, and are waiting to close on our first property). Just wanted to let you know he will definitely write you back today, but if you don't hear back for a few hours it's because he's in the office. Glad you're considering out of state! We can help each other along the way... New investors have to stick together!
Thank you, He has contacted me. I ll keep you and your husband posted. I wish you both luck.
Hi @sarahodge @davidhodge @jimworkman @bradleycordell
I'm also looking into the Bham market and would be mighty appreciative of any advice you can share relative to your experiences with developing a team there and or specific turnkey providers whom you've done business with.
I'm certainly interested in talking directly w TK and PM folks in the market as well.
Feel free to PM me - I'd love to connect
@Paul Burke hi Paul! My husband David or I will email you tomorrow with the company/(ies) we are using. So far, so good! Thanks for touching base!!
Awesome! Thank you, Sara!!
@Paul Burke just sent you a message
Thanks @Marco Santarelli
I'm excited to be on BP and look forward to meeting more like minded REI folks here!
Originally posted by @Account Closed :
Sara Hodge David Hodge
Great to see you guys active in BP . Keep it up!
Thanks Joey! I'm just TRYING to live up to your mantra: PAY IT FORWARD.
@Sara Hodge First off thank you so much for starting this thread. This is a great dialog about the best zip codes in Birmingham for rental investment. Full disclosure: I own a turnkey real estate business and a property management company in Birmingham. I only enter the conversation for informational purposes, however. I have a lot of experience in "B" Neighborhoods in the Birmingham Metro Area. As we do not participate in "C" areas, I have limited knowledge here.
@TJ Sayers did a great job mentioning some of our most popular turnkey areas. I wanted to take the opportunity to go into a little more depth about the positives and negatives of some of the different areas that we like.
5 Best Turnkey Areas / Zip Codes For Class B Properties in Birmingham, AL
- 1. 35215 - Center Point/Roebuck Area - This is a fantastic area where you can get a lot of bang for your buck. There is currently high rental demand in this area, and properties priced accurately generally move off the market quickly from a leasing standpoint. There are also still some good deals out there in the area, and depending on whether you use a turnkey provider or do the renovation yourself, you can expect somewhere between 8.0%-10% ROI (with a Turnkey provider) all the way to 11-14% (if you go at it alone and know what you are doing). Recently this market has become a little saturated with many new entrants - primarily local investors but also some national players like Sayco and Havenbrook. In my opinion, long term capital appreciation looks good in the area as well as the fact that there are an increasing number of owner occupant comparable sales that are bringing the average sales price in the area up. Disclaimer: there is NO way to know which area will be good from a capital appreciation standpoint 5 or 10 years down the road. These are just assumptions based off the data that we have.
- 2. 35023 - Hueytown - This is another great area to get a good return for a reasonable price. Hueytown boast a slightly higher owner occupant to tenant resident rate, so you will find better comparable sales in the area, and thus sometimes a higher price of acquisition in this area. You should be able to still get 8-11% return in this area if you find the right deal. If you have to pay a little higher price, this may be offset somewhat by the huge impact this area has to grow with the new additions to the Mercedes Plant in Vance Alabama. Hueytown is conveniently located between Birmingham proper and Vance, so people wanting to live closer to the city often find their home in Hueytown verses the VERY rural Vance. Mercedes-Benz will have the capacity to manufacture 300,000 cars per year in 2015 (up from 185,000 in 2013)! The cool thing is they have no plans of slowing down. It's also worth mentioning the last 5 out of 6 leases we've signed with tenants in that area are working for Mercedes.
- 3. 35235 - Grayson Valley/Chalkville/Roebuck/Center Point - This zip code grabs several areas, but is primarily located in the Clay Chalkville school zone. This zip code snuggles right beside the 35215, but in this area, you can usually expect to get a small premium in rent verses 35215. In the southern part of the zip code (Roebuck area), you are close to Saint Vincent Hospital West where you get a lot of good qualified tenants. In the northern part of the zip code, you have the Clay Chalkville school zone that generally has a higher rating than comparable schools in Center Point and Roebuck. There are a good number of tenants looking to get their kids into the Clay Chalkville school zone, so if you buy here, that is definitely something you should take into consideration because there are parts of the 35235 that are not zoned for Clay Chalkville.
- 4. 35127 - Pleasant Grove - This area is very comparable to the Hueytown area (above), but it covers a slightly less dense geographical territory. We really like this area due to the Mercedes growth mentioned above, but it's also an area where there is a higher owner occupant rate. This is great for resell value and long term capital growth, but sometimes this can cause the property to sit vacant for a little longer between move-out and re-lease. Fewer tenants in the market = longer time to re-lease.
- 5. 35126 - Pinson/Clay - This area is a little more rural, but you need to remember you are investing in Alabama, and people like spots away from the city. There are also a lot of tenants in this area, so your time to re-lease after move-out is not bad. This zip code usually boast a better school zone (Pinson Valley), so there are quite a few people looking to relocate to this area. Even though it's a little further out, the I-59S commute into work is one of the easier travel routes in rush hour traffic (when compared to going north or south on I-65 or traveling on the dreaded HWY-280).
- 6. 35068/35071 - Fultondale & Gardendale - Okay, I promised the top 5, but I didn't want to leave these areas out. This is a high owner occupant area that was highly affected by the foreclosure crisis and has already come back a good bit. You might be hard pressed to find the same ROI deals in this area, and it may be beneficial to settle for 7-9% ROI because I believe the capital appreciation play is really good in these areas. The school systems in these two areas are a good bit better than the other school systems mentioned, and there is very little land left to build in these areas. Combine that with its close proximity to the city center, and I think your long term ROI may be better here than in any of the other areas. If capital preservation is a BIG factor for you, hunt for deals here. They can still be found on occasion.
There are several other areas worth mentioning that I would also recommend for Class B Investment: parts of 35214 - Forestdale, 35210 - Irondale, parts of 35022 - Bessemer, and any Hoover zip code: 35243, 35226, 35244, 35242. There are also some good areas south of Hoover (Pelham, Alabaster, Calera, Helena, etc.), but these can be quite a trek for your property manager, so make sure you have that figured out before investing too far from Birmingham proper. Again please keep in mind that I am a turnkey provider doing ONLY Class B (some Class A) properties that are not Section 8, so my opinions have a bit of a tilt, but hopefully this was a good breakdown on some good rental areas in the Birmingham MSA. Also, keep in mind that the ROIs mentioned above are based on all cash deals, so use your personal financing specifications to adjust accordingly. One more note, PLEASE be careful with any zip code including the ones mentioned above because there can be large swings in any one geographical area.
Thanks for sharing!!
@Clayton Mobley Thank you for sharing!
Clayton, thank you for sharing!
This is very interesting / informational discussion. I am Canadian investor and looking real estate investment oppotunities in Alabama with some US based investors. I am looking for good cash flow properties.
What are good area for Cash Flow to invest in Alabama
Fellow investors please share your experiences/learnings
Please suggest following local Alabama contacts
-good real estate agent
-good general contractors to help me in rehab
-good property management
Great stuff Clayton!!!! Thanks
@David Nadelstumph I too am considering out of state investing. If you wouldn't mind, can you please also share any information regarding TK Investing and companies you recommend as well as any helpful tips and strategies? I am looking for my property/deal as well.
Most appreciated! Thank you and many blessings.
Btw, awesome thread!