All Forum Posts by: Michael S.

@Matt Huber - if you bought in 2021 in Harvest, you should have seen some decent appreciation - however, if you bought these as turnkeys, that may explain some of the lack of appreciation you are experiencing.  

Yes, the market here right now has been really tough, and trying to sell your properties to other investors with section 8 tenants will likely be fairly problematic at this current time. Given your low interest rates, your best move may be to sit tight for a while until the market here improves.  

@Jonathan Greene- good topic.  To add to the above posts, one thing that amazes me on this forum is the number of people who feel the need to give advice on markets that they have no idea on or no experience in.

For example, the number of people who feel the need to chime in about the Huntsville/Madison/North Alabama market who have absolutely no clue about it.  

"Huntsville is great for cash flow" posted by some dude in Alaska for example - I mean, seriously?  First of all, that is absolutely incorrect right now.  Second, why does someone in Alaska feel the need to comment on a city in North Alabama they have no clue about?   

Here's some real examples (with changed names / locations of the posters) to illustrate my point:

"Oh, I lived there 10 years ago" - Fred in Topeka;   yup, irrelevant to the current real estate market.

"I don't own any properties, but Huntsville is a great place to invest in" - Bob in Fresno;  how in the world would you know this?

"You should focus on duplexes in Huntsville for a house hack" - Jane in Montana;  great, except there are an incredibly few duplexes in Huntsville

"Hazel Green is an easy commute from Huntsville and shouldn't affect your rental prospects" - Joe in Chicago.  The commute may be small for a big city, but it's forever for the locals here.  Again, wrong advice.

Don't know the city, don't live there, don't have any properties there?  Then don't comment on the post with misinformation!

@Gash Nookala - if your property is not in the Hampton Cove area of Owens Cross Roads, you honestly are not in an ideal location for a rental.  If you want to provide your property's address, I can give you some additional feedback.  Rental market here is very slow right now as well.  

I doubt there would be much demand for an STR outside of Huntsville or Madison city limits - maybe in Athens or Guntersville, but those are 45 minutes away from Huntsville and a totally different market.

John, not sure if you are familiar with the current STR situation in Huntsville, but the city has shut down STRs that are not zoned correctly and also not permitted. Probably best to look elsewhere accordingly, as the availability of properly zoned STRs is quite limited.

@Shannon Allaire - the market here has been bizarre in 2024, especially Q3 and Q4.  I've spoken with multiple real estate agents, property managers, and investors who have all noticed the same thing. 

-Rentals are very labile - some rent in less than a week for more than expected, others take two months or more despite being listed for less than they were previously rented for two years ago

-There is no cash flow in A or B for new purchases unless you want to put down 30% or more, or find a unicorn deal.

-Wholesale deals are all over the place - we've seen some great deals, some ARVs that are ridiculous, and some that are priced more than it would fetch on the MLS

-C neighborhoods are going anywhere from 70 sq ft to almost 200 sq ft in variable conditions.  

-We all selling more than buying because we picked up multiple flip deals but have encountered minimal LTR opportunities to buy in 2024.

-It's been so crazy that I'm under contract for an OOS property in Indiana now with another business partner - never thought I'd see the day where I'd have to look outside of Huntsville for deals

@Lindsay Davis - I appreciate the data and the dialogue.  

I'd rather see a comparison of dollar amounts rather than percentages - they may have similar percents but the absolute dollar amounts should be quite different.  

Let's use a tangible example.

So let's say you and I both own an identical 3/2 SFH - yours is in Decatur and mine is in Huntsville. Yours is worth 150k and mine is worth 250k.

Both appreciate around 20%.  So you netted 30k and I netted 50k.  20k is a sizeable  difference - so I think we can agree that similar percentages don't necessarily mean similar absolute dollar appreciation between the areas.  

Here's the other consideration.  Both houses need a new roof that will cost 15k.  Now your net is down to 15k (10% return) and mine is at 35k (14% return).  That's why I prefer absolute dollar appreciation rather than percent.   

Again, this is just for the sake of dialogue for folks to consider when looking in North Alabama at investments.  

Best wishes!

@Lindsay Davis - I completely agree with those numbers for Decatur. 

However, a disclaimer for those not familiar with this area who are reading this, to be clear, Decatur is its own city and not a Huntsville suburb.  It has greatly lagged Huntsville and Madison in growth and appreciation, and should not be viewed as having the same growth potential whatsoever.  I would only consider Decatur for a cash flow play, not an appreciation play.  

@Jonathan Greene - there was actually a moment in the past when I started wondering if  Reafco owned Bigger Pockets

@Kim A. - patience is the key in this market right now, as many of the deals we've reviewed simply don't work.  Right now, we are on track to sell more than buy in 2024, and likely will buy less properties than in any year since I started doing this in 2017.  Yes, it's that hard to find deals in Huntsville right now.