All Forum Posts by: Lindsay Davis

@Isis Benson,

Welcome—congrats on your first BiggerPockets post!

Like you said, you’re definitely on solid footing and have the means to get started. Are you looking to invest in the New York City area or elsewhere?

@Jaxon Johnson,

Huntsville’s an interesting place for house hacking, and the two of you are in an especially good place given you don’t need to be tied anywhere geographically.

As for where to invest in Huntsville, areas along the “path of progress,” so from Huntsville proper to Wheeler Lake, could be worth checking out.

If the two of you are open to living in a smaller town close to Huntsville but outside the city proper, areas like New Hope, Arab, Hartselle, Decatur, and Athens could also be worth looking into.

@Michael S.,

Appreciate your counterpoints. There are definitely still supply/demand imbalances in quite a few Sunbelt markets at the moment, and the Huntsville area is no exception.

Single-family and multifamily new deliveries peaked in Q2 2023, so there’s still a bunch of new inventory waiting to be absorbed—hence the negative rent growth and appreciation some folks are seeing right now.

In my view, what’s interesting about places like Decatur and Meridianville is not where they are now, but where they’ll be in a decade.

The Huntsville metro area is constrained by mountainous geography to the east (beginning with Monte Sano State Park and beyond), so the natural path of development and progress is west towards Wheeler Lake and north towards Meridianville and Hazel Green.

If the Huntsville metro area continues to match the pace of demographic growth it’s seen since the 1990s, these suburbs could, in my humble opinion, look very different down the line.

Good information in this post, though I’d be cautious about characterizing the arrival of a single employer or agency—no matter how large—as an inflection point.

The more nuanced truth is that Huntsville has seen strong job growth for many years thanks to the constant influx of new employers (or incumbents expanding), including the FBI, Under Armor, Parsons, Fifth/Third, Glaukos, SpaceFactory, Total Quality Logistics (TQL), and so on.

The point is that Huntsville’s growth seems like a secular, broad-based trend more than anything else, and so market performance is likely to be influenced by that rather than the arrival of U.S. Space Command alone.

@Michael Maznio,

Marketplaces like Zillow are a good starting point, but just keep in mind that those are asking rents. If you’re in a high-supply market where tenants have the upper hand, actual (contracted) rents could be lower than what you see on listings.

Local leasing agents and property managers may have comps they can give you, though you’ll probably need to spot check for relevance.

In any case, welcome to BiggerPockets and best of luck in your career as a commercial real estate agent!

@Amaya Volz,

That’s a good next step, though I’d also recommend hashing out your “buy box” at the same time.

This is essentially a list of criteria that a property should meet before you consider buying it. For example, factors may include location (markets, submarkets, zip codes, school districts, etc.), type of property (single family, multifamily, etc.), property characteristics (number of bedrooms/bathrooms, square footage, etc.), and financial criteria (purchase price range, down payment size, rent potential, cash flow potential, etc.)

This can give you a better picture of what you’re after, which can help you seek out the deals that work for your investment strategy and disqualify the ones that don’t.

@Arun Maheshwari,

To my knowledge, there isn't a dedicated site for seller-financed deals. Your best bet would be to check MLS-listed deals on marketplaces like Zillow or Redfin. Give the listing descriptions there a read—sellers who are open to doing seller financing may sometimes say so in the listing.

But even if there’s nothing said about seller financing, it never hurts to ask. Oftentimes, sellers aren’t aware that that’s an option or don’t realize that it can be a selling point for their property.

Keep in mind that you’re trying to do a deal, so everything is negotiable! Even if the seller says they aren’t interested in offering seller financing, they may be open to it for the right buyer. At the end of the day, the worst they can say is no.

@April Graham,

Welcome to BiggerPockets!

I own and operate a turnkey provider that’s active in Birmingham (and throughout Alabama, southern Tennessee, and northern Georgia as well). I’ve been in the industry since 2010, so let me know if I can answer any questions or serve as a resource!

@Nicolás Eduardo Larach León,

Like @Dan H. and @Stuart Udis said, the 1% rule is more of a flawed heuristic than a hard-and-fast rule. It can be helpful as a screening tool, but I would caution against making buying decisions off of this single metric alone.

To answer your question directly, though, you can definitely still get properties that meet the 1% rule, especially in Sunbelt markets that lean towards cash flow. For example, cities like Montgomery and Birmingham come to mind here.

Of course, there are other tactics, too. Buying off-market (or at a discount to list price on the MLS) can improve your rent-to-price ratio, as can a rehab project that brings a unit's rent up to market.

@Ernesto Galindo-Doucette,

My opinion is that considering your total returns (i.e. the sum of cash flow and appreciation) makes the most sense.

The reason is that there’s typically a tradeoff between cash flow and appreciation. Markets that yield higher cash flow generally tend to appreciate less, and vice versa.

Depending on your need for current income, tax bracket, and other factors, you may prefer one over the other. In the grand scheme of things, though, both represent a possible source of return, so the most profitable real estate investment is the one in which the sum of cash flow and appreciation is highest.