Birmingham Alabama. Any advice?

Question

I primarily invest in Indianapolis and I am looking to expand my portfolio into another market.  Birmingham Alabama has been on my radar for awhile and I'm looking to take it one step further and dig deeper into researching this market.

Can any of you investors out there give me your thoughts on this area?

What does Birmingham have going for it that makes it a good market to invest in?

Much appreciated.

Account Closed · Answer

@Tony Gunter

@Denise Evans

I've seen the medical buildings there in person.  Very impressive campus.  Birmingham seems to have a lot of revitalization going on throughout the entire city.  The uptown area also impressed us and there is clearly evidence of new construction and revitalization in the downtown core.

J Benoit · Answer

Well done @Bobby Theerathorn !  You've got it pretty well figured out.

Account Closed our market is pretty much easily divided by territory into C's and B's.  Most of the stuff south of downtown is A market.  Going way south brings you back to the B's.  It is very much a block by block deal in the C market.  Some areas have a better concentration of great houses and others are not so much.  Are you looking to buy turn key or build it yourself? If Decas Group can help with management, please let us know.

Account Closed · Answer

@J Benoit I'm looking to buy turnkey properties.  Any suggestions on companies that could help me?

Bobby Theerathorn · Answer

Hi Joey,

I've been looking at these two markets and am actually in the process of closing on a property in Birmingham.  From posts by local investors, the neighborhoods in both cities can vary greatly by the block.  For the "B" class 3BR SFH properties that I have researched, the rent/price ratios are similar and on paper good cash flow can be found in both cities. Property taxes in Birmingham are lower - about 1% of the assessed value, compared to 2% to 2.5% in Indianapolis. Insurance rates from what I can tell are similar. According to the BLS, in December the two cities had similar unemployment rates with Birmingham at 5.2% and Indy at 5.4%, although media reports seem to indicate that job growth in Birmingham has been slower than expected. The winters are more harsh in Indy but Birmingham has had tornado damage in recent years. And the hedge funds seem to have bought more in Indy up until now.

Bobby

Tyler Dalton · Answer

Account Closed I'll be moving into the Bham market in 3 months and looking to get the real estate game. Let me know if I can be of assistance.

Jay Hinrichs · Answer

Account Closed

I own properties in both markets... As with your Indy properties PM will be key...

Along with buying right to begin with...

I see B ham as a little under the radar,,, and a market that is being found by bigger players.. B ham  is showing some run up in values from what I see... could be prime time !!

J Benoit · Answer

Account Closed I'm only in the Birmingham market.

Account Closed · Answer

I'm trying to diversify and move into another market.  I already have 5 properties in Indy.

Denise Evans · Answer

@Tony Gunter

The Birmingham market is stable because of the healthcare and biosciences industries.  Parts of town like Eastlake and Avondale are coming back, being gentrified.  Trussville, to the NE of town, is a very strong market.  Houses in the $50K range are being snapped up by REITs, who are doing $20K of rehab/upgrades, and then placing on the market for rents at $1,200 per month. They are staying vacant, because the market for those houses is down around $700.  But, the REITs keep buying more houses. Must be something to do with funky REIT accounting, because nobody seems able to understand it.  Properties in other price ranges are hard to find, but there are bargains, still.

If you are interested, I can connect you with someone who used to be a student of mine at University of Alabama College of Commerce, and who got himself through school on income from his real estate investments. He's now in Birmingham, doing well, but always looking for equity partners so he can do more deals. Very conservative, very solid, exceptionally smart and hard working. Never cuts corners. Analyzes everything six ways from Sunday.  Knows the market intimately.

There is a HUGE market of tax sale properties on the state inventory, located in Jefferson County. Contact me via PM, and I'll tell you about that play. It's rather more complicated than a BP post.

Tony Gunter · Answer

@Denise Evans

Denise. Unfortunately your advise sound like you have actually personally traveled this road before. I have too, but not in AL. Thanks for your detailed DIY guide, very insightful.

Do you happen to have an opinion about my comment related tot he demographics of Birmingham? Is it shrinking, up and coming, flat lined? It is always nice to put your money in a B&H's that might get some appreciation too. How about the RE market in general in the area?

Birmingham Alabama. Any advice?

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