I’m looking to buy a single family home I can move into and build some sweat equity then move out and rent, however nothing meets the 1% rule right now (rents for 1% of sales price) or even 0.8%
that is remotely safe to move my family into.
I’m starting to think we are in a bubble. 2014 -2017 price increases of 30-40%
Just because prices are up doesn’t mean it’s a bubble. It could simply mean your area is experiencing a strong demand and experiencing a lot of growth
Look for highly distressed off market deals. If you are only looking on the MLS, I can see that being true. In the nicer suburban areas 1% deals are always hard to find.
@Joshua Shockley Look towards Pelham, Alabaster, or Chelsea. There are some pockets of Hoover that might work too.
Also applying one percent rule to prime area's can be hard if you're buying at market value.
Demand is higher for the exact same reason's you want to feel comfortable moving there. Greater Birmingham has some gems out there.
As mentioned by previous posters Alabaster, Forestdale, Norwood are some fast appreciating neighborhoods with properties that are not overpriced YET.
ANd there are some, with sweat equity You can come out with sizeable gains. Below is an example of an MLS listing that could appreciate(%50 )with 2 weeks of hard labor.
Buying a SFH that will cash flow is very difficult due to the market being driven by home owners. Home owners do not pay based on actual value they primarily make emotional decisions and will over pay. SFHs rarely make good investment rental properties in areas that are overpriced and continuing to appeciate.
Your best option is to purchase a purpose built multi unit that investors normally purchase. You will more likely find a better cash flow investment than any SFH.
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