Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
Hi, Investors in Alabama -
We are an an active investor group with active investments all over US - mix of both multifamily and single family. Now we are thinking of getting started in Alabama and are debating between Montgomery versus Birmingham. Both of them seems stable. Looking to hear from experienced investor and shed some light:
- What are economic prospects of the two cities in terms of jobs.
- How is the demand versus supply. Crime and safety.
- How easy is to find deals versus home price growth projections?
- If an recession hits who is likely to get hit harder? How about the state of Alabama as a whole.
@Rudy Manna I started my investing career in the Lexington, KY and have recently moved to the Montgomery market. I will say Montgomery is a place for high cash flow no-appreciation investments. Across the state of Alabama, with the exception of Huntsville, population and jobs are stagnant or slightly on the decline. Despite this, there are still a treasure trove of great investments across both the Montgomery and Birmingham markets. I don't know as much about Birmingham but can say from my experience here in Montgomery that you are going to find very attractive price to rent ratios but you need to be very cognizant of what neighborhoods you are investing in as there are pockets of high crime throughout the city. Regarding ability to weather recessions, what I like seeing in Montgomery is the two largest employment industries are the government and healthcare, both of which are steady no matter the economic environment.
@Rudy Manna I started my investing career in the Lexington, KY and have recently moved to the Montgomery market. I will say Montgomery is a place for high cash flow no-appreciation investments. Across the state of Alabama, with the exception of Huntsville, population and jobs are stagnant or slightly on the decline. Despite this, there are still a treasure trove of great investments across both the Montgomery and Birmingham markets. I don't know as much about Birmingham but can say from my experience here in Montgomery that you are going to find very attractive price to rent ratios but you need to be very cognizant of what neighborhoods you are investing in as there are pockets of high crime throughout the city. Regarding ability to weather recessions, what I like seeing in Montgomery is the two largest employment industries are the government and healthcare, both of which are steady no matter the economic environment.
@Rudy Manna I'm curious, did you and your group evaluate Huntsville or just focus in on Birmingham vs. Montgomery? I invest in Huntsville and am partial to it. However, I think it is difficult to start there and it is getting very competitive. However, I know I'm biased so I'm curious how others are looking at it.
@Rudy Manna I started my investing career in the Lexington, KY and have recently moved to the Montgomery market. I will say Montgomery is a place for high cash flow no-appreciation investments. Across the state of Alabama, with the exception of Huntsville, population and jobs are stagnant or slightly on the decline. Despite this, there are still a treasure trove of great investments across both the Montgomery and Birmingham markets. I don't know as much about Birmingham but can say from my experience here in Montgomery that you are going to find very attractive price to rent ratios but you need to be very cognizant of what neighborhoods you are investing in as there are pockets of high crime throughout the city. Regarding ability to weather recessions, what I like seeing in Montgomery is the two largest employment industries are the government and healthcare, both of which are steady no matter the economic enviro
Thanks for the insights. Huntsville is definitely an option, but MF/Cashflow options seem tight there. Generally speaking which parts of Montogomery are relatively safe/stable, and which part are warzone that absolutely to avoid. Any insights will be highly appreciated.
@Rudy Manna I'm curious, did you and your group evaluate Huntsville or just focus in on Birmingham vs. Montgomery? I invest in Huntsville and am partial to it. However, I think it is difficult to start there and it is getting very competitive. However, I know I'm biased so I'm curious how others are looking at it.
Definitely Huntsville is an option too. How is the MFH situation in Huntsville?
Unfortunately, the Small MF in Huntsville proper is the only thing I don't like in Huntsville investing. The rents tend to be in the $400 to $650 range and that doesn't give enough head room to cover expenses (real expenses, not % of rent expenses which don't hold up at those low rents). Also, the small MF are clustered together and create neighborhoods/pockets of people paying $500 in rent which makes it really hard for the areas to improve and get better. There is good quality SFH for rent in the $850 range so you don't really have a spread to push up the small MF. There is significant rent appreciation in the last couple years and it looks like the SFH will be over $1K in rent. As that happens, it might create some more opportunity in small MF but the small MF prices might still be too high.
I would look in the suburbs of Huntsville for Small MF. I don't know the suburbs for investing but I'm guessing there is much better opportunity for small MF than Huntsville proper.
@Dave DeMarinis , as always, gave a great summary of the small MFH space in Huntsville. Competition in MFH has been on a tear and is showing no signs of letting up. Deals continue to close above asking and appraisal values lag the market in some cases. These days it is key to have both trusted boots on the ground and the ability to move quickly when deals appear.
Happy to connect and discuss in further detail if you'd like.
We are an an active investor group with active investments all over US - mix of both multifamily and single family. Now we are thinking of getting started in Alabama and are debating between Montgomery versus Birmingham. Both of them seems stable. Looking to hear from experienced investor and shed some light:
- What are economic prospects of the two cities in terms of jobs.
- How is the demand versus supply. Crime and safety.
- How easy is to find deals versus home price growth projections?
- If an recession hits who is likely to get hit harder? How about the state of Alabama as a whole.
We are an an active investor group with active investments all over US - mix of both multifamily and single family. Now we are thinking of getting started in Alabama and are debating between Montgomery versus Birmingham. Both of them seems stable. Looking to hear from experienced investor and shed some light:
- What are economic prospects of the two cities in terms of jobs.
- How is the demand versus supply. Crime and safety.
- How easy is to find deals versus home price growth projections?
- If an recession hits who is likely to get hit harder? How about the state of Alabama as a whole.
We are an an active investor group with active investments all over US - mix of both multifamily and single family. Now we are thinking of getting started in Alabama and are debating between Montgomery versus Birmingham. Both of them seems stable. Looking to hear from experienced investor and shed some light:
- What are economic prospects of the two cities in terms of jobs.
- How is the demand versus supply. Crime and safety.
- How easy is to find deals versus home price growth projections?
- If an recession hits who is likely to get hit harder? How about the state of Alabama as a whole.
Super helpful. What is your general outlook about investing in Birmingham?
I like the booming tech scene that they've got going on down there. Smart governing led to a lot of it. Combine that with the low property taxes and nice price to rent ratios I think it's a promising market for cash flow investors.