Birmingham investors I need your input

25 Replies

I flew out to Birmingham Alabama last week and drove around for a full day. I wanted to see the neighborhoods in person before I commit to investing there. I made a list of all the properties on Trulia that caught my eye, drove to the property, and then canvased the area around each property. I went through a tank of gas on a little hatchback so I pretty much covered the city. Now there were some areas that I would definitely not invest in. I didn’t even bother going to any of the red zones of the crime map, only areas showing green. But some of those areas were still too rough. Bessemer looked rough, also the area around Miles College was rough. Too many vacant homes. But there were some areas that actually looks decent with mostly occupied homes that were well kept. Looked like mostly families. I could tell it was block by block. You can’t judge Birmingham by zip codes you have to know the streets and not trust google street view. You have to see the neighborhood in person. Three areas that looked good were Midfield, Center Point, Tarrant, and parts of Fairfield. I’m looking for C CLASS so keep in mind my definition of “decent” isn’t somewhere I’d want to live. It’s somewhere I can get good cashflow without dealing with the bottom of the barrel tenant. They looked like solid blue collar neighborhoods with well kept homes. I’m looking at 2-3 bedroom SFR’s in the $30,000-$50,000 range that rent for $700-$800. If any Birmingham property manager’s or investors out there could share their opinion I would appreciate it.

Hi,
I have one Section 8 house in Fultondale that’s worked out well for me. I am still looking for more. One of the turnkey providers there posted a very detailed analysis of the neighborhoods. I will PM it to you. BTW, many people have recommended Signal property management to me. One question, are you going to rehab these properties or are they in rentable shape already?

@Daniel Mills I'd really be interested in seeing that report as well. Thanks!

@Daniel Mills I plan on rehabbing. I don’t want to take on anything too intensive though. Cosmetic only I don’t want to be taking down walls or anything. So far I only have one rehab under my belt and I did that one myself.

I feel like something rent ready in that price range would probably be in an area I wouldn’t want to be in .

You’re pretty spot on with your feelings on the neighborhoods but I’d stay away from Tarrant. Not many nice streets and the municipality is a nightmare. ($500 security deposit and inspection when you turn power on, trash service has to be in the landlords name etc)

Pretty accurate @Jonathan Hulen . A tank of gas well spent!

Did you happen to drive East Lake? Based on what you’re strategy, it could be a good fit for you.

@Mark Byers thanks for that info. I only saw one property in Tarrant at the end of my day so I didn’t get a great look at that one. I think Birmingham is the place. I’ve flown to other cities last year but none impressed me like Birmingham. @Daniel Mills thanks for the property management referral. I will definitely check them out. I own one out of state rental now and I have a great manager. Hopefully I can find someone as good as him because I believe management is what makes or breaks C Class. At the rate I’m saving I plan to buy by the end of this year. I’ll keep digging into as much info as I can find until then. Thanks

@Rob Drum I did not go to East Lake. That area was mostly yellow and red on the crime map so I figured it was out of the question. But next time I’m out there I’ll check it out. Thanks!

@Daniel Mills , Could I please get a copy of that report as well? I graduated from UAB back in the eighties and I have a friend headed back that way that will be looking for some property. 

Hey @Jonathan Hulen glad to hear you were in Birmingham! I met with two other investors from out of state last week who were also here for due diligence. Your initial assessment is pretty spot on...a zip code can vary from block to block. Unfortunately, things can change on a good block in a matter of months if there happen to be prolonged vacancies or a burnout. 

There are a few other solid neighborhoods/zip codes you might want to consider. 

And I would second what Mark Byers said about staying away from Tarrant!

Best of luck to you!

Spencer

This post has been removed.

Hey @Jonathan Hulen , I just closed on my first Birmingham rehab property on Friday. Hope to be heading out there soon myself in a few weeks to buy more. I also recommend @Mark Byers at Signal Rents. Happy to share notes with you anytime. 

Hi,

I would also be very selective property management companies in Birmingham,
So have more experience than others, in the c class neighborhoods. C class areas in Birmingham are largely section 8 rentals.

I would also be more selective when purchasing a house in Fairfield, the city is very financially strapped, the city services are subpar as well.

It may be best to seek a turnkey provider like
@J Benoit , who’s familiar with these areas.

Tarrant makes you pay $350 for an inspection prior to turning any utilities on. Fairfield is bankrupt & their police ride around fining contractors without permits posted even if they have one. Avoid both areas or you risk unforeseen troubles. Midfield never appreciates. It's held the same values for the last 10 years. 

I actually live in the Bessemer/Birmingham area if anybody has any questions. We tend to stay away from Tarrant, Midfield, and Fairfield. You definitely need to know Bessemer well to invest here. I also recommend Hueytown and Pleasant Grove, its much more blue collar than war zone! Pleasant Grove has had a hard time recovering since tornadoes years ago, but is still a good spot. Those of you who talked about Birmingham being more about the street than the zip code are spot on. 

@Daniel Mills I'd love to see that list if you're not too busy.

Hi guys, sorry for the late reply. The information was posted in this thread - Areas in BHam

It's the post by Clayton Mobley about halfway down. 

Thanks,

Daniel

Hey Jonathan:

Full disclosure we don't do C neighborhoods but have done them in the past. I know one investor that focuses on Tarrant the rest stay away.  We like Centerpoint and it performs like a B. Bessemer is definitely street by street but there are B's in Bessemer as well as a lot of C's. There are only a couple of streets in Fairfield we will invest in and the Fairfield city is very difficult to work with. 

Hope that helps.

@Rob Drum I did a little research on East Lake. Would you say the neighborhood is undergoing gentrification? It seems it could be an up and coming area.

Eastlake is not going thru gentrification. It is going down the same as Centerpoint. Too many tenant occupied properties instead of owner occupied properties where owners have a vested interest in maintaining property value. Numbers look decent on paper but the trend in data shows a declining market. I posted the true statistics & market data yesterday in a post. 

*Makes mental note to prey on the dead real estate located in Midfield, Tarrant, & Fairfield.*

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