Searching for a SFC in Huntsville, AL
I am a first-time out of state investor looking for a SFH in Huntsville. Has anyone recently purchased there? How is it going? Can you please share your property management company information?
I am new to this site and learning as much as possible. Any tips and recommendations are welcome.
Welcome to Bigger Pockets @Martha Saldana-Beene ! I've purchased, flipped and wholesaled property in Huntsville. The market here is hot like most places right now. I don't have a 3rd property manager but I would definitely suggest interviewing several once suggestions come in. Also not sure on if you're investing from in state or out of state, but if you're from elsewhere I would definitely come visit the market and network with some of the investors, property managers, brokers, etc in person. You'll get to know the market much quicker that way.
Quote from @Caleb Bryant:
Welcome to Bigger Pockets @Martha Saldana-Beene ! I've purchased, flipped and wholesaled property in Huntsville. The market here is hot like most places right now. I don't have a 3rd property manager but I would definitely suggest interviewing several once suggestions come in. Also not sure on if you're investing from in state or out of state, but if you're from elsewhere I would definitely come visit the market and network with some of the investors, property managers, brokers, etc in person. You'll get to know the market much quicker that way.
Thank you soooo much for taking the time to respond. I will definitely do that.
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
@Martha Saldana-Beene I'm in Nashville and have lent on a few pieces of property in Huntsville and can confirm the market is hot. I agree with Caleb, get to know the market personally before fully investing!
@Martha Saldana-Beene
It’s a great market. I’ve been investing here since October. Happy to share any insights I have with you. DM me and we can speak further. We market direct to seller and sell plenty of properties we get.
Definitely call around and see who you click with. If you have an investor agent, even better. Having an agent that is knowledgable about the rental market is crucial. Otherwise, you could get high rent comps to get to the closing table, and then be disappointed in the rent you can attain.
As you are doing your research, here is a comprehensive list of 32 questions I like to ask a potential Property Manager:
1. How long have you been in business?
2. What geographic area/s do you cover?
3. How many units do you manage?
4. How many properties does each regional office manage?
5. How many do you own yourself?
6. Do you specialize or concentrate in a particular class of property?
7. What kind of due diligence services do you provide? What is the potential cost if
the deal doesn’t close?
8. Do you take on value-add properties?
9. Describe your process for managing a moderate property renovation.
a. How is the status of the work tracked?
b. Who manages the contractors?
c. How are invoices tracked and verified against bids?
d. Who approves the work before the contractor is paid?
e. What fees do you charge for renovation/cap ex expenses?
10. What are some of the names of nearby properties that you are currently
managing?
11. Has your firm been sued by one of its clients in the last 5 years?
12. Have you managed any properties that went into foreclosure and if so, why do you
feel this happened?
13. What special training do your managers receive from your company?
14. How do you manage a property’s online reputation?
15. What do you see as the on-site manager’s duties? (turnover, cleaning, repair)
16. Can I interview and approve the on-site manager?
17. What kind of relationship do you want your property manager to have with the
owner?
18. How often do you communicate with owners?
19. What is the protocol for communication? Will I be talking to you, the regional or the
property manager?
20. Will you provide a written management plan?
21. What % of gross rent do you charge for management fee?
22. What is included with the monthly management fee?
23. Which property management software do you use?
24. How much time do you typically take to do a make ready?
25. Can tenants pay with auto-withdrawal? What other methods are available to them?
26. Do you require me to list the property with you upon its sale?
27. Will you give me your cell phone number or home number?
28. What are some of the reasons we should use your company?
29. What are the growth goals of your company over the next 5 years?
30. Describe some of your weaknesses and how you hope to improve?
31. Can you send me some redacted financial statements of properties you’re
managing?
32. Can you give me contact information for 3 current clients who have buildings like
mine?
Goodluck
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Thank you for this.
Quote from @Wale Lawal:
As you are doing your research, here is a comprehensive list of 32 questions I like to ask a potential Property Manager:
1. How long have you been in business?
2. What geographic area/s do you cover?
3. How many units do you manage?
4. How many properties does each regional office manage?
5. How many do you own yourself?
6. Do you specialize or concentrate in a particular class of property?
7. What kind of due diligence services do you provide? What is the potential cost if
the deal doesn’t close?
8. Do you take on value-add properties?
9. Describe your process for managing a moderate property renovation.
a. How is the status of the work tracked?
b. Who manages the contractors?
c. How are invoices tracked and verified against bids?
d. Who approves the work before the contractor is paid?
e. What fees do you charge for renovation/cap ex expenses?
10. What are some of the names of nearby properties that you are currently
managing?
11. Has your firm been sued by one of its clients in the last 5 years?
12. Have you managed any properties that went into foreclosure and if so, why do you
feel this happened?
13. What special training do your managers receive from your company?
14. How do you manage a property’s online reputation?
15. What do you see as the on-site manager’s duties? (turnover, cleaning, repair)
16. Can I interview and approve the on-site manager?
17. What kind of relationship do you want your property manager to have with the
owner?
18. How often do you communicate with owners?
19. What is the protocol for communication? Will I be talking to you, the regional or the
property manager?
20. Will you provide a written management plan?
21. What % of gross rent do you charge for management fee?
22. What is included with the monthly management fee?
23. Which property management software do you use?
24. How much time do you typically take to do a make ready?
25. Can tenants pay with auto-withdrawal? What other methods are available to them?
26. Do you require me to list the property with you upon its sale?
27. Will you give me your cell phone number or home number?
28. What are some of the reasons we should use your company?
29. What are the growth goals of your company over the next 5 years?
30. Describe some of your weaknesses and how you hope to improve?
31. Can you send me some redacted financial statements of properties you’re
managing?
32. Can you give me contact information for 3 current clients who have buildings like
mine?
Goodluck
@Martha Saldana-Beene
I’m new to the market in Huntsville, have offered on 4 homes in the last month 30-45k over asking with no luck. This market is ridiculous. Lol
Quote from @Morgan Finley:thank you for your honesty
@Martha Saldana-Beene
I’m new to the market in Huntsville, have offered on 4 homes in the last month 30-45k over asking with no luck. This market is ridiculous. Lol
Question: What was the price range you were making offers on? Also, what were the zipcodes? Is your core four group on this platform? Do you mind sharing?
Quote from @Morgan Finley:
@Martha Saldana-Beene
I’m new to the market in Huntsville, have offered on 4 homes in the last month 30-45k over asking with no luck. This market is ridiculous. Lol
@Martha Saldana-Beene
#1 was in 35763 listed at 260k
#2 was in 35811 listed at 230k
#3 was in 35761 listed at 250k
#4 was in 35811 listed at 250k
#5 was the magic number, finally got offer accepted in 35750 - listed at 230k accepted at 265.5k
These were all newer 3/2 brick houses with garages in A/B neighborhoods.
As of right now I just have my agent in HSV Stacy Bell and she has been great. Currently in the process of finding the right property management. I was originally planning on purchasing through a turnkey company but decided I would rather buy on MLS in Madison County than in their available markets so I'm pretty much building my parachute on the way down!
@Martha Saldana-Beene
I would have preferred west Madison county - Madison, Harvest, Toney due to proximity to Redstone Arsenal and other employers along with just development patterns in general but bidding up would push my budget in those areas.
Here’s what I’ve learned -
- Houses seem to come on the market most later in the week.
- Act quick, they may be on the market for 4 days…. But they may go on day 1
- If it’s a nice house / in a good location expect it to go for 30-50k over asking
- Escalation clauses were helpful
- Be prepared to offer to cover the appraisal gap
- Consider offering with inspection "for informational use only" … lots of buyers you're going to be competing with on MLS are paying cash, waiving inspections and appraisals.
@Martha Saldana-Beene Have you thought about turnkey real estate investment or do you want to be more active in the investment process? Best of luck with all your investing.
@Seth Young I have thought about a turnkey investment real estate investment, but I still want to be active in the investment process. Do you have a turnkey company in mind?
@Morgan Finley Thank you so much for sharing. I am definitely inspired by you and appreciate what you've shared. Which property management company have you considered? I am looking through some right now.
@Drew Sygit Thank you for the thorough info. I appreciate you taking the time to share.