All Forum Posts by: Michael S.

My thoughts on your questions:

1.  35806 is typically a pretty solid zip code;  depending on its specific location, resale likely would not be challenging 

2. I personally am not aware that a bank would finance a condo much differently than a SFH

3. Questions for the HOA would be fees, rental restrictions, any shared utilities, last special assessment (if any), and parking rules. Make sure you get a copy of the covenants at closing.

@Blake Butler- one of our tenants recently asked if we would consider selling the property to them.  I declined, and here's why:

1.  I would put it on the open market and let the market determine the value

2.  I would still have to pay the 6% commission (per the terms of our property management agreement - which was clearly stated in the terms of the management, so I have no issue with it)

3.  The tenant has been there for less than one year

The only way I would have considered selling the property to the current tenant at FMV would be if they were a solid long term tenant and I did not have to pay the 6% commission.

Depends on what you specifically mean with your question:

Can you sell a well done flip here?  Absolutely.

Can you find houses to flip here?  Perhaps, but you will need to spend a lot of time networking to do so.  

Can you find contractors that are available right now here?  Few and far between.  Our contractor is already booked out for the rest of 2021 (at least - maybe farther).  

@Jason Cory - one correction I'll make is that Huntsville is much more dependent on military funding in general, rather than NASA specific funding, at this juncture;  however, Huntsville and Madison have started to bring in other industries to fuel the economy;  healthcare is a huge driver of the economy here as well.  That said, you make a very good point about turnkey providers trying to work their way into this area;  however, I think it has been tougher sledding than they anticipated, as the available SFHs are few and far between that will work for their model;  I know at least one turnkey that gave up on this market already due to lack of inventory.  

@Michael Choy - if I wasn't able to invest locally, I would definitely be looking at Birmingham regardless of the what the population pattern is;  the city is still doing quite well overall, and I think it cash flows easier than Huntsville as well;  however, I do like the appreciation play that comes with Huntsville/Madison.  I also think you will have a much easier time finding properties in Birmingham that have adequate numbers overall than you will here in Huntsville.     

I think Birmingham will be fine long term - that said, I think a lot of tremendous growth in Huntsville/Madison has likely been somewhat at the expense of Birmingham.  Just a thought - I have no data to prove it.  

When we get unsolicited calls, we always say, "Sure, we'll sell you our property".  

Then they get all excited, and ask how much we will offer it for. Our answer is always the same - FMV x 2, all cash, no contingencies, close in 7 days.

For some reason, they hang up and never call back...

@Gaurav Mehta - I've never heard of this before, although my buyers agent had always gotten 3% in the deals I've done.

To me, it's more a simple matter of respect - I value and respect my agent's time and expertise - I show this by writing legit offers, and not asking them to see properties that I'm not ready to write a solid offer on the same day.

They respect me as a client by not nickel and diming me with this fee. 

@Julie Orth That headline by WAFF was not correct - Huntsville is actually 10th in the nation according to the news clip;  I think they meant to put Top 10 in the headline.  Still, good news anyway for here.

@Robert N. - here's some opinions:

-The S-Corp in the medical practice should be a non-issue so long as it has existed over 2 years and has 2 years of W-2 data for you.  It is considered "self-employment", so the 2 years is a must;  this will make some lenders uneasy, where as others will be perfectly fine with it

-I am assuming you are a physician as such - you should have local banks that have "private banking" - aka dedicated service for folks in certain fields (physicians, dentists, JDs, CPAs, business execs, etc). Use this avenue for seeking your loans - you will likely get better rates.  If you've been in practice for over 20 years, I would assume you have some existing relationships with local banks. 

-Another option is to transition your purchases into an LLC (if you haven't already), and get commercial loans from the "private banking" lenders. I'd be shocked if you couldn't find 5 year fixed rate loans with balloons through this avenue. You will still need to do a personal guarantee, but the rates will be better this way.

Hope this helps.  Good luck.  

@Murali Jesudoss - the $400 to $500 range per year are Alabama homestead exemption rates - aka owner occupied properties.  In Alabama, your primary residence has a discounted rate via the homestead declaration.  

The higher rate of $800 to $1000 for the similar properties would be for non-homestead properties, such as rental/investment properties.  

There is nothing to challenge with the county on this, as this is routine policy here.