My Birmingham Beauty- First Turnkey- PICS
Good afternoon BP Fam-
After immersing myself with rich content the past 2 months at Bigger Pockets, and the endless streams of podcasts; I have my first turnkey rental real estate success story to share. I contracted this fixer upper back on May 17, and we closed today 7/1. Here are the numbers:
1. Purchase Price $114,000, with closing costs, all in around $119K
2. 1 yr Lease secured (tenants moved in) $1325/month, 10% more than my target rent. Location and quality of the rehab played a big role in getting a tenant so quickly; tenant signed the 1 year lease even before the property was finished.
3. My independent home inspection was very clean. I should not have any major capex issues the next few years, but will be banking all of the cashflow just in case.
Here she is:
Originally posted by @Rollan Dizon:
I was location agnostic. After a review of different properties, locations and RTV ratios, it just happen to be that Birmingham fit the bill. The 2021 World games will be held there and there is a revitalization going on in the city. There is an emergence of nice restaurants and foodie favorites that is becoming a foodie destination in the south.
Did you mean LTV ratio? Utilizing the upcoming world games as a predictive expectations of the local economy is a great way to look at the potential growth of the investment. Did you do out of state TK due to CA prices?
Angel, I like to look at the Rent to Value (RTV) Ratios; and try to target 1.2 or higher in nicer neighborhoods like this one, ant 1.5% for more blue collar C-B Neighborhoods.
Yes, California is tougher to find these ratios; in addition, I have my residence here and also a rental property in Tracy, CA; I wanted to diversify in other parts of the country (linear markets vs. cyclical) that will yield better cash flow. Best of luck!
@Rollan Dizon Congrats on this project! It looks like a quality buy with sustainable rental income. If you don't mind me asking, what area of Birmingham is this in? I'm about to move to the area and looking to invest once I move there.
Thanks,
T
@Rollan DizonVery nice renovation. Solid house in a good area. Birmingham has terrific areas to invest in and we have been doing quite a bit of turnkey properties here so hat's off to you!
@Jonathan Mednick Thanks for the vote of confidence! Love that this first rental property I have went so smoothly. I have 3 more under renovation, will be looking for more in a few months.