All Forum Posts by: Lindsay Davis

@John Helms,

Exciting stuff—congrats on getting started, and great to see that you’re in Birmingham!

As for your question, you can definitely make a reasonable offer below asking price—with "reasonable" being around 5% to 10% off asking. But like @Ryan Harrell and @Min Zhang said, be prepared for a counteroffer or an outright rejection.

As a rule of thumb, if I were you, I’d ask myself: if I had to pay full asking price for the property, would I still want to do the deal?

@David Overcash,

Welcome to BiggerPockets, and congrats on getting started!

Great to hear that Huntsville’s your top pick. Like @Ericka Parrott mentioned, Alabama as a whole is pretty landlord-friendly, and Huntsville (Madison County) features some of the lowest property taxes in the country (roughly ~0.44% of the property value annually), so you’re in a good spot.

One thing I haven’t seen mentioned around here yet is the fact that areas outside Huntsville proper could really be worth looking into.

Suburbs like Decatur and Athens (about 30 miles southwest of downtown Huntsville) and Meridianville (10 miles north of downtown) could benefit from the same demographic and economic tailwinds as the city of Huntsville itself—and yet homes there are about 20% to 30% cheaper than those within the city limits.

Anyway, just wanted to put this on your radar to start. Let me know if you have any other questions!

@Nate Williams,

I'm probably preaching to the choir here, but BRRRR isn't just an investing strategy—it's an all-encompassing lifestyle.

Given your young family (and your wife’s pleas), I imagine an approach that leans heavily on rehabs to create value would be difficult to maintain, especially as your portfolio begins to expand.

You do mention that you have $40,000 in cash, but also say that you want a bit of a cash buffer. Have you considered a slightly more hands-off strategy—-for example, something like turnkey rentals?

If you’re worried about high down payment costs, there are plenty of deals right here in Birmingham (or elsewhere in Alabama) where you can acquire a rent-ready, turnkey single-family property for between $120,000 and $200,000 or so. That means about $30,000 to $50,000 plus closing costs for 20% down, which is roughly where your budget’s at.

Any thoughts?

@Emmanuel Ola,

HELOCs are a tried-and-true method of financing, so there’s nothing wrong with that.

I am a bit concerned about the 13.25% interest rate, though. That sounds excessively high. Are you tapping nearly all the equity in your property?

A couple of commenters have mentioned reaching out to your credit union. That’s definitely a good bet. Also worth considering are banks you have a prior relationship with.

Also, I took a quick look at the HELOC loan originator you listed. I suspect the reason why your rate is so high is because you're using an online lender. Generally, online skimp on the underwriting process to make things convenient for the borrower. The obvious downside, however, is that they'll offer higher interest rates to compensate for the added credit risk.

If you’re willing to submit to a traditional underwriting process, I’m pretty sure you’ll be able to find a rate that’s several percentage points lower than what you’re being offered now.

@KeAnna Dakwa,

Welcome to BiggerPockets—it’s great to see new faces around here.

I’m also excited to see that you’re from Birmingham—I’m from the area as well, and I’ve been active here as a broker and turnkey provider for over 15 years.

I see that you’re looking to build passive income. Feel free to reach out if you have any specific questions about the market, things to look out for, or ideas on getting started!

@Lawrence Mitchell,

I see that you put down Birmingham as your location. The Magic City is my backyard and, while I may be biased, I think it’s a great place to start. If you’re looking for a good balance between appreciation and cash flow, there’s a lot of opportunity in suburbs to the west, including Adamsville, Forestdale, Pleasant Grove, and the like.

If you’re open to nearby markets as well, Tuscaloosa could also be a fast-growing spot with strong student tenants worth looking into. Let me know if you have any other questions!

@Danielle B. Our property management team has not seen any deviation in rental assistance since the directive was recently issued. This is from navigatehousing.com: "According to OMB’s guidance, any program that provides direct benefits to individuals is not subject to the federal funding pause. This includes critical programs such as: Social Security & Medicare, Medicaid & SNAP (food assistance), Pell Grants & Head Start, and Rental Assistance Programs". 

Our team has close partnerships with our local Housing Authorities across our markets and they have communicated to us that we should not anticipate any disruption. We continue to monitor events like these, just as we did during the eviction moratorium. 

@Shayan Sameer,

The really brief answer is that most of TN is pretty affordable apart from Nashville, which is an expensive, supply-constrained metro.

The median home price in Chattanooga, for example, is about $300,000, which is a little above your $200,000 budget. Suburbs to the east, like Ooltewah and Collegedale, are more affordable—if you’re lucky, you can find homes that are right around your budget.

Deals that meet the 1% rule are likewise present in the market, but again, you’ll probably have to do some digging. If you’re open to exploring nearby markets, like northwest Georgia or north-central Alabama, you may have an easier time finding properties within your buy box.

@Christian Houston-Floyd,

Welcome! The Huntsville metro is a really interesting place because it contains some of the fastest-growing cities in Alabama. In my view, this trend is likely to persist and could be a strong demographic tailwind for a long-term investor like yourself.

Specifically, Athens, AL—a city about 30 miles west of downtown Huntsville—was the #1 fastest-growing city in the state in 2023, so there’s a lot of growth, development, and opportunity in and around Huntsville proper.

If you have the time, do some driving around. Check out places like Decatur, Athens, Meridianville, Mount Carmel, New Hope, and the like. These areas could all be excellent long-term plays.

@Zachary Young,

Given your $300,000 budget, you have a good number of options—you certainly don’t have to be constrained to Cleveland, if that’s not where you want to start out.

@Lillian Pintaromentioned Birmingham, which could be a good fit given that you’re looking for cash flow. Tuscaloosa, the home of The University of Alabama’s flagship campus, could also be a good fit—plus, it’s only about 60 miles southwest of Birmingham.

As a very brief overview, the median home price in Tuscaloosa is about $250,000, while median rents are about $1,500. If you’re willing to do a little digging, cash-flowing deals are definitely possible to find. Growing enrollment at UA may also potentially push rents upward over time, so that’s an excellent plus.