All Forum Posts by: Jason Cory

Glad it is helping you @Ariel Robinson

Eastlake is not going thru gentrification. It is going down the same as Centerpoint. Too many tenant occupied properties instead of owner occupied properties where owners have a vested interest in maintaining property value. Numbers look decent on paper but the trend in data shows a declining market. I posted the true statistics & market data yesterday in a post. 

Appreciate it @Rob Drum. Hopefully this will help investors looking into our market.

Class A

Mountain Brook - https://www.neighborhoodscout.com/al/mountain-brook

Homewood - https://www.neighborhoodscout.com/al/homewood

Vestavia Hills - https://www.neighborhoodscout.com/al/vestavia-hills

Hoover - https://www.neighborhoodscout.com/al/hoover

Class B

Alabaster - https://www.neighborhoodscout.com/al/alabaster

Pelham - https://www.neighborhoodscout.com/al/pelham

Gardendale - https://www.neighborhoodscout.com/al/gardendale

Trussville - https://www.neighborhoodscout.com/al/trussville

Helena - https://www.neighborhoodscout.com/al/helena

Chelsea - https://www.neighborhoodscout.com/al/chelsea

Indian Springs - https://www.neighborhoodscout.com/al/indian-springs-village

Class C

Fultondale - https://www.neighborhoodscout.com/al/fultondale

Centerpoint - https://www.neighborhoodscout.com/al/center-point

Roebuck - https://www.neighborhoodscout.com/al/birmingham/roebuck-crest-estates

Forestdale - https://www.neighborhoodscout.com/al/birmingham (Unincorporated)

Adamsville - https://www.neighborhoodscout.com/al/adamsville

Graysville - https://www.neighborhoodscout.com/al/graysville

Hueytown - https://www.neighborhoodscout.com/al/hueytown

Pleasant Grove - https://www.neighborhoodscout.com/al/pleasant-grove

Mt. Olive - https://www.neighborhoodscout.com/al/gardendale

Irondale - https://www.neighborhoodscout.com/al/irondale

Moody - https://www.neighborhoodscout.com/al/moody

Leeds - https://www.neighborhoodscout.com/al/leeds

Grayson Valley - https://www.neighborhoodscout.com/al/birmingham (Unincorporated)

Pinson - https://www.neighborhoodscout.com/al/pinson

McCalla - https://www.neighborhoodscout.com/al/bessemer (Unincorporated)

Mulga - https://www.neighborhoodscout.com/al/mulga

Minor - https://www.neighborhoodscout.com/al/mulga (Unincorporated)

Morris - https://www.neighborhoodscout.com/al/kimberly (Unincorporated)

Kimberly - https://www.neighborhoodscout.com/al/kimberly

Class D

Midfield - https://www.neighborhoodscout.com/al/midfield

Tarrant - https://www.neighborhoodscout.com/al/tarrant

West End - https://www.neighborhoodscout.com/al/birmingham/zipcode/35211

Ensley - https://www.neighborhoodscout.com/al/birmingham/zipcode/35208

Inglenook - https://www.neighborhoodscout.com/al/birmingham/inglenook

Class F

Bessemer - https://www.neighborhoodscout.com/al/bessemer

Fairfield - https://www.neighborhoodscout.com/al/fairfield

Eastlake - https://www.neighborhoodscout.com/al/birmingham/zipcode/35206

Lipscomb - https://www.neighborhoodscout.com/al/lipscomb

Brighton - https://www.neighborhoodscout.com/al/brighton

North Birmingham - https://www.neighborhoodscout.com/al/birmingham/zipcode/35207

Comparison by Class

Homewood – Class A

Median Home Value - $379,563

Median Household Income - $66,573

Individuals Below the Poverty Level – 11.1%

Crime Index – 8 out of 100 (100 being Safest)

School System – Top 10 in the State

Average Market Rent - $1,420

Alabaster – Class B

Median Home Value - $179,984

Median Household Income - $73,325

Individuals Below the Poverty Level – 10.2%

Crime Index – 40 out of 100 (100 being Safest)

School System – Top 50 in the State

Average Market Rent - $1,362

Centerpoint – Class C

Median Home Value - $117,940

Median Household Income - $39,134

Individuals Below the Poverty Level – 26.7%

Crime Index – 12 out of 100 (100 being Safest)

School System – Lower 3rd of State

Average Market Rent - $1,162

Tarrant - Class D

Median Home Value - $73,542

Median Household Income - $26,800

Individuals Below the Poverty Level – 32.6%

Crime Index – 1 out of 100 (100 being Safest)

School System – Lower 3rd of State

Average Market Rent - $1,045

Alabama is similar to all other states regarding property class. They are driven mainly by school systems and crime statistics. Since Birmingham is a smaller MSA the per capita rates for crime are skewed and typically reflect more crime than actually happens.

Homewood is a Class A area however, due to recent annexations the crime stats reflect an area of higher than normal crime. Homewood is an affluent suburb of Birmingham. It was chosen as a comparison to show this fact. It has one of the highest median home values and income in the state. The school system is consistently rated in the top 5 of the state. This is a predominately owner-occupied market.

Tarrant City is a lower income area that is a predominately tenant-occupied market that receives assistance in one form or another. This area consistently rents above market. It is a higher crime area of Birmingham.

Birmingham is not the crime filled market data would typically suggest. It consists mainly of domestic abuse and/or petty vandalism.

If you are investing in Birmingham I ask you do your own research to verify the data provided. Class C & D areas are the best markets for renting properties. The Class D areas in Birmingham would likely be Class C areas in other markets however, the classes have been assigned based on local activity and knowledge of the markets as a whole for Birmingham and the MSA.

I used to Appraise Real Estate prior to Investing. I only invest in Class C or D areas since the return is higher and the pool of potential occupants never decreases. In Class A or B areas the return is lower since the entry prices are higher and the return is typically half of predominately rental areas. If you are investing for cash flow it is better to invest in areas that reflect your goals instead of investing in areas that do not offer the returns you are seeking.

If you have any questions about Birmingham I welcome you to reach out to discuss further.

Accepted

Tarrant makes you pay $350 for an inspection prior to turning any utilities on. Fairfield is bankrupt & their police ride around fining contractors without permits posted even if they have one. Avoid both areas or you risk unforeseen troubles. Midfield never appreciates. It's held the same values for the last 10 years. 

I am not sure how they structured it for their kids but I've sold properties to people from California using a self-directed IRA for their children. The last one I sold like this the child was 14 if memory serves me correctly. I'm sure there are other ways to do it but it seems as though it's a normal thing for parents on the west coast. Properties are cheaper in Birmingham and cash flow a little higher than other markets due to low property taxes, cost of living, and cost to repair/maintain. I will be glad to help if the the Birmingham market is of interest to you.

Class B structure or B area? This is where it starts to get away from people. A lot more to consider with Commercial property versus Residential. 

I'm in Birmingham as well. They are nice people over at Spartan. 

They may need to start posting cell phone numbers so investors can get in touch with them. 

Never get the fever in Real Estate. If a deal is meant for you it will always be there when you get there.

Section, township, range. Each township within a section has it's own millage rate. It does correlate to infrastructure for that township as well as property usage for the township. 

$100,000 value would have a 10% assessed value for owner occupied primary dwellings. If your millage rate is 7% you calculate...

$10,000 × .07 for a $700 tax bill.

If it's not owner occupied it's considered a 2nd property and/or investment property. Same millage rate but now you pay a 20% assessment tax.

$20,000 × .07 for a  $1,400 tax bill. 

Every county lists their millage rates on the tax assessors website. 

To reduce the tax amount you can do 2 things...

Buy in a personal name instead of a business. You are allowed to own one property in a county that can be a 10% assessment. The 2nd in a county starts the 20% assessment. 

Hire an appraiser to contest the taxes every year in May. They do not like seeing appraiser's in contest hearings because they lose every time. 

Municipalities also raise their millage rates when they are trying to change the usage from predominantly rental areas to owner occupied for gentrification. Higher millage rates kick many investors out of an area. It's backwards because what it actually leads to is vacant properties instead of gentrification.