All Forum Posts by: Michael S.

@Charles Hirst - very accurate description of the market here right now.  Pure chaos.  And it's not slowing down.  

None of the above. . .the market here is crazy hot.  Those starting prices are similar to Zillow's "make me move" price listing.  They are shooting for above market value to see if someone is desperate enough to pay it with how tight inventory is here - if no takers after 1 to 2 weeks, they are then dropping their asking price to more realistic "fair market" values.  

@Gloria C. - if you are referring to Huntsville, AL, the market has reached utter chaos here.  Investment properties that actually have numbers that work are getting 10-30 offers within 24 to 48 hours presently - as such, many of the agents here may be less interested in representing OOS investors and more interested in owner occupied buyers who are looking for 300k+ houses, which have many less offers and high odds of scoring their commission.  Making an offer on a viable investment property here has now become like buying a lottery ticket.  

The market here has become pure chaos. We recently wrote offers on multiple properties that were unsuccessful - 1 wholesale, 2 MLS.

Wholesale house went for more than 10k over ask.  

MLS house 1 - 18 offers in 24 hours, went for at least 16k over ask.

MLS house 2 - 24 offers in less than 36 hours, went for at least 20k over ask.

@Gorden Lopes - I've honestly never evaluated Decatur for investment properties, nor do I plan to.  The growth rate that @Jacob Franz quoted you above is the exact reason.  With the explosion of growth across this area, Decatur has seen essentially nothing in this regard.  That's a red flag.  So if you consider Decatur, assume minimal to zero appreciation, and make sure it is a strong cash flowing property to make it worthwhile.  I've lived in this area for a long time - the only reason I have ever been in Decatur is for the Jack Allen Soccer Complex, which is a fabulous facility.  Otherwise, I've had no reason to go there.  If you are going to consider North Alabama outside of Huntsville or Madison, would look at Athens, Harvest, Hazel Green / Meridianville, or Cullman.  

@Cameron Pletcher - the Huntsville market is crazy right now with an oversaturation of buyers and less than 1000 properties in total available based on the recent real estate data.  Madison proper is probably even worse because of the excellent schools and the huge number of owner occupied buyers.  If you want to find deals, you will likely have to look in slower appreciation areas - Athens, Decatur, Hazel Green.  These are not areas I invest in, but that doesn't mean you can't find a possible cash flow deal in these regions.  You may have better luck in the Birmingham area right now.  However, the other option is to simply get the word out to friends/family/neighbors/colleagues that you are looking for a rental property - you may be able to pick up an off market deal this way.  Good luck.  

@Ken Hobbick - because Gordon is absolutely right when he said there are zero deals here in Huntsville right now. Between the number of OOS investors and owner occupied folks who have moved to Huntsville in the past 3 years, the market is oversaturated with buyers. The wholesale prices are essentially MLS retail prices right now because the supply is so low.

Gordon, congrats on getting your BRRRR done at the right time!

The fact that there is less than 1000 homes available right now tells the whole story.  

@Thomas Coke - your experience with your rental here in Huntsville is not necessarily relevant to your new city - in other words, I would not assume that how things played out in Huntsville will be the same in your new location, given how ridiculous the market here is right now for both rentals and owner-occupied. Would recommend finding an agent (or a local REI group) in your current market, getting some feedback on comps/rental numbers, and then run the numbers on a spreadsheet to get the answer to your question.

There is a potential option that @Joe Splitrock noted in his post that I think a lot of folks may have missed.

If you avoid federally backed loans, then your battle is typically limited to the state/city/county level. Because our LLC has commercial, non-federally backed loans, my property manager advised one of our tenants that while we were happy to work with them during these trying times, we also still had the ability to evict them if they chose to ignore us and simply assume they could live rent free. Rent check then arrived within the week after the tenant was notified of this. Sure, our interest rate will be slightly higher, but I'd rather have more control of the property given the times we live in.