All Forum Posts by: Jason Hollon

 https://www.reilivebirmingham....

On the rental side, I should clarify I only use Arcana for lower-end rentals where I just do policies for a certain cash amount.  For nicer properties where I need replacement value insurance, I'm now using Openly.

Yes, I still use Arcana.  I now use them for my flips as well as rentals.  I have yet to have a claim with them, but have heard good things from others that have.

Hey Daniel, it's great that you are getting started in real estate investing at such a young age!  I have been investing here for about 11 years or so.  I have a lunch group on the 1st Thursday of every month where we network and learn together, and you are welcome to check it out.  Next lunch is July 1st.  Search for "Flippingham" on Meetup. 

Thanks,
Jason Hollon

The Birmingham metro area consists of dozens of municipalities, of which the actual City of Birmingham is just a part.  Be sure you are considering that when looking at population data.  

To the best of my knowledge, the MSA is projected to have steady (albeit small) population growth going forward.  Of course, there has been a nationwide trend over the past year of people fleeing the lockdown states, and especially migrating south.  Hopefully this will benefit Birmingham, but it's likely too soon to be showing up in statistics.

I can't speak to new construction in Mount Olive specifically -- but from a rehabbing standpoint (in established neighborhoods), I have recently had good success in Mount Olive.  

These houses were in the $160,000-$170,000 price range, and they sold quickly.  I would recommend staying below $200,000 for sure, as Jason Cory mentioned.  

I'm just about to put on one the market in Warrior (even further north) in the $130,000's range, which has several good comps to go on as well.

It is a generally a desirable area, and I believe at the right price point and construction style (sorry, can't help you with that question) there is certainly potential there.

Rents fluctuate within a more narrow band than prices.  This holds true throughout the country.  In other words, there is both a relative "floor" and "ceiling" on what rents the market will bear, in relation to property values.

A lower-end house for, say, $40,000 would rent for $800/month (about 2% "Rent-to-Value" ratio").  

Whereas a $120,000 house might rent for $1,200/month (1% ratio).  

However, a $300,000 house may only rent for about $2,000 (0.67% ratio).

You can see how the cash flow (in terms of rate of return) decreases with each of these scenarios.

There are of course a million shades of gray in between.

Try some searches for terms like "1% rule" or "2% rule" or "investing for cash flow" and that may land you on some further explanations.

What price range are you looking for?  

Some good long-term areas, with good schools, where you should be able to fit within the "1%" rule (e.g., mostly white-collar middle-class areas) could include: Parts of Hoover, Gardendale, Trussville, parts of Leeds, Pelham, Alabaster, Helena, Calera, possibly some parts of Chelsea.

There are plenty of good lower areas that would cash flow better, and plenty of good higher areas that may offer better appreciation but less cash flow.

It includes an area most investors avoid completely (Inglenook), a rental area that only a few investors still buy in (Tarrant), and some nicer parts to the west that are technically Fultondale.

There are a few decent pockets here and there.  Generally speaking, not a great zip code, but an area where you can still do some business.

This is a Tuscaloosa zip code, which is about 45-60 minutes west of Birmingham and really considered a separate market.  That being said, based on what I see this appears to be an A neighborhood and I can almost guarantee you renting would not be a problem there, based on what investors in that area tell me.  

A Tuscaloosa investor will hopefully pick up this post and give you the details you're looking for.  Good luck!