All Forum Posts by: Jason Cory

I'm new to BP but can already tell just from Analytics that I'm wasting money on AdWords, FB, LinkedIn, etc. bc BP is driving qualified leads to my site/company instead of tire kickers on other advertising mediums. I'm kicking myself for not joining earlier in my career.

Multi family rents well within the city limits. You can get 10-15 cap rates within the city, vacant or turnkey. Suburbs have an excess of units since many have moved back into the city recently. 

Do you have a preference of area?

I just joined BP but have been doing this for a long time. There are plenty of opportunities in Birmingham. Some things to note that most are unaware of about Birmingham

• Medical drives our economy. UAB has an economic impact on the state to the tune of $500k per day
• Construction Hub - Multiple international construction companies
• Financial Hub - There are many banking HQ's in Birmingham
• Infrastructure projects everywhere to expand
• Sports Medicine originated in Birmingham (HealthSouth)

I used to appraise prior to investing. I do not manage or sell occupied properties. I also don't invest in predominately owner occupied areas since it's not the highest and best use of the property. Owner occupied areas are better served as a retail sale. If you only want to rent it's a good idea to focus on predominately tenant occupied areas since that is the highest and best use of the property. Suburbs value fluctuates often with the economic conditions that none of us can control. Predominately rental areas rarely fluctuate given the value is driven by the rent amount not sales price.

The 1% rule is difficult to maintain. If a property rents for $1,000 the value should be $100,000 and/or 10% annual gross ROI. Predominately rental areas sale for much less with similar rent. I have personally not rented a house with 3 bedrooms for less than $750 for the last 10 years. The GRM for the city limits varies between 60-85. Suburbs would be 100 GRM given the 1% rule.

Ex.

Income approach monthly with 70 GRM

$750 x 70 = $52,500 (retail income value)

Annualized Income approach with 70 GRM

$750x12 = $9,000

70/12 = 5.83

$9,000 x 5.83 = $52,500

$1,500 Gross Rental Income for $100,000 retail income value

vs

$1,000 Gross rental income for $100,000

Property usage determines the return and highest & best use. If you only want to rent go where there will always be a need for a rental not where an owner occupant controls the market. You have no control of the value in those areas because you are using the property for something it wasn't intended to be used for therefore, your return will never be as high as it should be.

If you are in town or have questions I will be happy to talk about our local market if anyone wants to reach out.

I'm in Birmingham. I don't know @Clayton Mobley personally but I know some of his employees. I've sold them properties & can say on one deal a couple of years ago his contractor made a boo boo with an estimate & was off around $15k if memory serves me correctly. True story, the man ate the loss & closed on the property without asking to amend the contract.

Integrity is difficult to find in this business but they honor their word the best they can. 

It may take a minute to get them on the phone but if you aren't buying from me you should buy from Spartan. 

Calhoun County is a smaller market. It's almost impossible to determine the external obsolescence, i.e., market reaction to the location. The appraised value in these markets are honestly best guesses most times since the sales and listing are few and far between. The distance to linkages, (employment, shopping, etc) has a major impact on the reaction of a market whether in Alabama or elsewhere. I appraised a couple in Calhoun County years ago for the VA and after a couple I gave it up because it was too difficult to get an accurate valuation. In most markets and neighborhoods you can establish a pattern but in markets like these it becomes completely subjective by using the extraction method. The best an appraiser can do in these markets is find a similar home in a different area within a reasonable distance to establish a baseline for the value set. Once you see what similar out of place homes sell for in other areas you can see the reaction the market gives to these types of homes and locations. Once you can see the list price to sales price ratio for the comps you can better determine the negative reaction of the market. If 3 comps average selling for 80% of the list price you know the likely sales price will be 80% +/- of current list price in the area. It's not like being in a patio home development where every house is the same so it truly comes down to the opinion of the appraiser plus the opinion of the buyer. Tax values in Alabama are never accurate. Residential taxes are a drain on local municipalities so they never decrease the assessment unless you contest the taxes, which is done often in Alabama. Municipalities only profit/break even from commercial property. If it's in an area where there is a lack of market activity always hit it at a minimum of 10%. I've appraised some before where I hit it 50% but that was Hale County and it was a fellow appraiser. He was not happy and reported me to the board. The board called and said good job. Rural areas hit it hard for external obsolescence.

This property is located in the desirable South Eastlake area. It needs a full renovation on the exterior and interior.

Estimated rent upon completion is approximatelty $800/mo.

Property Link

This property is definitely an Investment. It was burned in the front bedroom. The fire was contained to the bedroom however, the right side of the house does have soot on the walls. The left side of the house, exterior and interior, do not have soot or any other remnants from the fire.

The house has a lot of character on the interior with built in China Cabinets, Hardwood in Every Room, and Elevated Ceiling.

We recommend increasing the house to a 4 bedroom, 2 bath house.

Property is located within 2 blocks of the new police station near the CrossPlex. Gentrification surrounds the house.

Property Link

This investment property is located in the West End community of Birmingham, Alabama.

It has been updated recently with but not limited to;

• New Roof
• New Countertops
• New Plumbing Fixtures
• New Electrical Fixtures
• New HVAC

The property offers a brick exterior along with Hardwood/Tile only on the interior. This will hopefully lead to lower cost for upkeep/maintenance for the investor looking for a solid turnkey property in Birmingham.

This property is currently vacant however, it has been approved by the local housing authority.

Property Link

Get in Touch with LAS Companies about this investment property and other alternative Real Estate Investment opportunities currently available.