Looking at cap rates in Birmingham, AL 35204

10 Replies | Birmingham, Alabama

Hey BP, I am looking at several areas in the Birmingham market and was hoping for a little insight on cap rates there. One zip code I am focusing on is 35204. Does anyone happen to know what average cap rates are at right now in that area?

IMO, overall, 35204 is not a good zip code to be looking in especially from out of state. There’s not really a neat and tidy answer to your question. There are some ok areas in this zip and some really bad areas. I’d recommend you come look at Birmingham/the neighborhoods in person before you start buying in these kinds of areas.

Thanks Mark, for the response! Totally agree with you on looking at the area and certainly know what you are referring to when it comes to different areas. It’s on the calendar. We are moving on one deal already, but are looking at another that falls in the multi family side of things in that region. I’m not as concerned about where this place is located as much as what the ARV will be.

Right now you won't make money in the zip code. Every time you renovate in this area the crew will liberate you from the work done/money spent. Get a tax certificate & wait a couple years if you do anything in the area. Buying is outright investing suicide in 35204.

I agree, I know the price point is tempting, but that is a street by street area, and being out of state I could recommend another area, You can see better returns and keep your HVAC in other areas.

@Mark Byers I’ve been meaning to contact you as Rob Drum has recommended. I’m a Birmingham native investor looking for great management services. Do you mind sending me a PM with the neighborhoods/areas you’d prefer to manage more rentals vs. the areas you prefer to avoid? I look forward to connecting with you.

@Jared skillicorn. 35204 is not a good area. Check out Center Point, 35215, etc. Also Belview heights in Ensley, 35208. It's hit or miss there, but a lot of decent houses. I personally wouldn't but anything outright in these areas. Only tax certificates.

Updated almost 3 years ago

*buy

All i know is if i see that town on the “First 48” in nearly every episode im gonna make sure i know the exact details about the neighborhood before i buy!