Flipping and BRRRRing in Bessemer, AL
Hi, I am interested in investing in the Bessemer area of Birmingham, AL and I was wondering if fix and flips or BRRRR's work there? Is that a high crime area?
Any and all advice is appreciated, thank you!
Your investment objectives determine your loan type. Fix n flip is a quick turnaround interest only loan for a term of 6 to 24 months The BRRR method is used for buy, rehab, rent and repeat with a more conventional mortgage structure. Do you want to be a landlord investor? Or is the idea of a purchase to rehab and sell more appealing?
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I would connect with a local realtor to get some opinions
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Quote from @Chyson Shuffleburg:Thank you Chyson! I haven’t done a deal yet so I was thinking that if I did a fix and flip first it would get my feet wet and I would get some experience and then I can move onto a BRRRR or becoming a landlord. What are your thoughts?
Your investment objectives determine your loan type. Fix n flip is a quick turnaround interest only loan for a term of 6 to 24 months The BRRR method is used for buy, rehab, rent and repeat with a more conventional mortgage structure. Do you want to be a landlord investor? Or is the idea of a purchase to rehab and sell more appealing?
Quote from @Jacob Sherman:
I would connect with a local realtor to get some opinions
Thank you Jacob, that’s a good idea.
I would advise you to network with experienced flippers thru REI clubs and Meetups to see the realities of what it takes to execute a flip successfully. It's not only the rehab but the ability to market and sell the property before the balloon payment comes due. Flipping sounds like the easiest entry into real estate investing but from what I have seen it has the most pitfalls for a new investor.
Hey @Eric Stugart
Congrats on wanting to start your investment journey in Birmingham, are you open to exploring Florence or the Shoals area? That´s a great market as well.
Feel free to reach out if you have any more questions or need further assistance. Happy investing!
Quote from @Chyson Shuffleburg:Thank you Chyson, I didn’t know that. I will look for REI clubs and meet ups, do you have a recommendation on a good place to look?
I would advise you to network with experienced flippers thru REI clubs and Meetups to see the realities of what it takes to execute a flip successfully. It's not only the rehab but the ability to market and sell the property before the balloon payment comes due. Flipping sounds like the easiest entry into real estate investing but from what I have seen it has the most pitfalls for a new investor.
There are decent areas of Bessemer, but its mostly non owner occupied properties. If you can find a good enough deal to do some cosmetic upgrades you might be able to make decent money selling to a first time home buyer, or maybe turnkey rental investor. I would stay away from the areas in red.
Quote from @David Chappell:
There are decent areas of Bessemer, but its mostly non owner occupied properties. If you can find a good enough deal to do some cosmetic upgrades you might be able to make decent money selling to a first time home buyer, or maybe turnkey rental investor. I would stay away from the areas in red.
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Eric,
You have been given solid advice already, but I thought I would add my input. First I would say to start building your team. Find a good qualified realtor that knows the area well that is willing to not only work with you, but teach some of the business from their perspective. I would also definitely join a local real estate club as was suggested. You can learn a lot from fellow investors in your market, but make sure you listen to those that are actually investing in real estate not just talking about investing in real estate. You will also need a good real estate attorney that can advise you on deals, a good CPA that knows the details about investment real estate, insurance agent, and contractors who can provide you bids on work that needs to be done on the properties you look at.
There are other members you will want on your team, but those will get you started. You need to do your research to see what is selling in your target market, for how much, with what features. Also research what properties are renting for in your market. Whenever I buy a property I always have at least two exit plans.
I know that was wordy when I could have simply said, I have never seen a market where a fix and flip would not work. I think if you buy a property for the right amount, make the right repairs, and sell it for the right price it will work. Obviously, some areas are better then others, but its a numbers game.
Determine how much the remodel will cost to include holding cost and get a good estimate of what the property will sell for and then figure if that leaves you enough profit to make it worth your effort. Make sure you leave a buffer in your budget because sometimes unexpected expenses come up. Good luck.