All Forum Posts by: Michael S.

@Leeor Kanor - welcome to the area, and good luck on your business endeavors!

@Luke Ache - read @Chris Seveney post again.  If there is a recession or correction in 2023 (who knows, but it's possible), those who are terribly overleveraged will be either dumping properties for a loss or bankrupt.  Don't put yourself in that situation.  

@Luke Ache - 35758 has mostly A neighborhoods, with some B areas scattered in it.  It will be hard to cash flow well in that zip code at current property prices.  But appreciation there will continue to be strong, and rental amounts should continue to progressively rise.  

I think New Market has a lot of potential as well.  It's a much better option than Paint Rock or Gurley in my opinion.  

@Luke Ache - I think you will likely have trouble finding tenants for houses in Gurley or Paint Rock.     

@Luke Ache - 35805 is a diverse zip code;  it is mostly C class, with some B and D neighborhoods mixed in.  The lowe mill area could create an A neighborhood pocket in the future - but that's at least 5 to 10 years from now.  We have properties in this zip code, and are fairly familiar with it.

The property you referenced is in a D area of 35805 in my opinion.  Feel free to see for yourself.  

Any property in Huntsville or Madison proper on the MLS more than 90 days is either overpriced, has something seriously wrong with it, or has a bad location. You will not find diamonds in the rough on the MLS here that are listed for 90+ days.

That doesn't mean you can't find a deal on the MLS - we bought one off the MLS this year that still amazes me that we got for under list price back in May in 35801 - had only been listed for a week when we got it under contract. We figured we were in for a surprise when we closed on it and did the demo. But nope - just one that slipped through the cracks somehow on MLS, which is very rare, but happens.

Good luck in the Greensboro market, @Gorden Lopes!  

I had to look up Odenville, as I'd never even heard of it.  

It is not close to Huntsville whatsoever, so I would not use the Huntsville market as a comparable whatsoever.  

Just an FYI for OOS investors. 

@Luke Ache - I saw you transitioned the discussion to a new thread, so I figured I'd answer your question here instead.

BRRRR is definitely still possible here - it's all about the numbers. They are possible in any neighborhood, including A neighborhoods; again, you have to know your numbers - rehab costs, comps, and ARV.

We have one property near UAH that rents great - it has positive cash flow but that's because we bought it in 2018.  Tougher to cash flow that area now, as the SFHs go for around  140k to 150k PRIOR to rehab.  IF you rent to college students, make sure the parents are on the lease.  Otherwise, you will be losing money on capital expenses very quickly.  Renting by bedroom will likely lead to positive cash flow even with the current cost basis of the properties there.

Huntsville is not a good location for 4-plex investing in general;  there are very few of them relative to the number of investors, which pushes their acquisition costs to be quite high.  In addition, many of them are in the rougher areas of Huntsville.  Avoid the Golf Rd area unless you like capital expenditures.

Live-in Flips - do you mean house hacking?  If so, this is an excellent way to invest;  however, duplexes are not common here, and are typically in the somewhat rougher 35805 areas, so proceed with caution.  

Hope this helps.  

@Anthony Phillips - Great job on pulling all your capital back out of the property, which is easier said than done in this market.

As @Nathan Gesner pointed out, you'll need to revisit your cash flow evaluation.  Let's assume everything breaks right - perfect tenant, and no capital expenses for the year.  You still are likely negative cash flow given that you did not include property insurance (likely 125/month) and property taxes (likely 200+ month), which are absolutely unavoidable.   

We try to do BRRRRs which are what we call absolute zeros - cash out refi matches our money in, and cash flow is zero (but on a 15 year amortization loan).  But again, our cash flow includes the variables Nathan mentioned above.  

Nonetheless, definitely a good first attempt at BRRRR overall in my opinion. This is how you learn for future deals - getting real experience.

@Luke Ache - where you invest in Alabama is going to depend on your goals.

If you goal is primarily cash flow, Montgomery is probably a very reasonable option.

If you are looking for more of a mix, Birmingham may be a good option.

If you are looking more for appreciation with minimal cash flow, Huntsville is a great option.

There is just not a lot of cash flowing options currently here in Huntsville unless you go C/D class neighborhoods, but even those houses are going for 6 figures now.

We've only bought 2 houses this year, which will be my lowest total since 2017, which is the year I started.  The primary reason has been just not finding enough deals where the numbers work.