Investor · Hinton, WV · Member since 2018 · 1 post · 3 votes
Hi am a 43yr live in NYC just bought two rental properties in Alabama. I would like to buy more properties there. What areas should I focus on and why.
Samantha, do not pick areas by name. Pick them by numbers. That is the mistake I see most with out-of-state buyers.
In Memphis I buy single-family under $100K, ARV $180K-$265K, and I need a 3BR that hits Section 8 rent of $1,395-$1,950 and the 1% rule. A 2BR rents for less and sits longer, so I convert 2/1 to 3/1, often adding 400-650 sq ft by turning a carport or garage into a master bedroom and bath. I have done that across 236 properties.
Use the same test in Alabama. Look at your two deals first — purchase price, rehab, rent, and vacancy. If an area does not clear the 1% rule on a 3BR, move on. Deal flow is the bottleneck, not the state. What are the numbers on the two you already own?
Hi am a 43yr live in NYC just bought two rental properties in Alabama. I would like to buy more properties there. What areas should I focus on and why.
@Samantha Ogarro, since you already own two rentals in Alabama, I'd start by looking at what's working well with those properties before choosing another area. Beyond the numbers, I'd also consider how easy it is to manage the properties from New York, especially when it comes to maintenance, tenants, and finding reliable local help.
I'm a real estate attorney and investor based in Maryland, and I work with landlords and investors on property purchases, contracts, and rental matters. I've seen how important it is to understand the local requirements and responsibilities that come with owning rental properties, especially when you're managing them from another state.
Thanks for sharing your plans, @Samantha Ogarro! It's great that you're already growing your portfolio. Happy to stay connected!
Samantha, congratulations on two doors already — that's further than most people get, and it means you already have your best teacher: your own two properties. Before you buy a third, I'd sit down with the real numbers on the two you own — what each one actually cost to buy and fix, what it rents for, how long it sat empty, and what surprised you. The areas that worked for those two are your map.
From there, I'd build the team before the portfolio: a local agent who knows the streets, a property manager who will tell you the truth about an area, and an inspector you trust. Alabama is a big state, and the right area is a street-level question, not a state-level one. Learn the systems on the two you own first — then scale what already works.
Samantha, congratulations on two doors — before you pick a third city or ZIP by name, I'd reverse-engineer the two you already own. Write down for each: all-in cost, actual rent, days vacant, unexpected repairs, and how hard it was to get a contractor or manager from NYC. The streets that worked for those two are your map. Then screen the next deal with the same underwriting (taxes at purchase price, real insurance quote, vacancy, and a full PM fee even if you hope to self-manage). Area lists without that filter just send you toward marketing. What rent-to-price and vacancy did your first two actually deliver in the first 90 days?
One Alabama-specific thing to check when you compare areas: as far as I know, Alabama assesses rentals at 20% of value, while homes the owner lives in are assessed at 10% and usually get a homestead exemption too. So the tax on a listing is often the seller's owner-occupied bill, and yours as a landlord can be about double. Alabama taxes are low either way, but on cheap houses it still moves the cash flow. Look up the millage for each city or county you're comparing (they vary a lot) and run the tax at your price at the rental rate. Worth checking the bills on your first two as well, to make sure they were switched over correctly.
Congratulations on your rentals in Alabama. What areas are they currently in? I run an operation in North Alabama in between Huntsville and Birmingham. Currently i have about 85 doors and me and my team take on about 40 projects a year. Let me know if you want to chat. I run an acquisitions and dispositions team that provides for my construction crew and kicks off extra deals to people in my network. Thank you for contributing to our community !