Birmingham Market for SFH Buy & Hold

[Eric Baum]

Hi All,

Hope everyone is having a great weekend.  I am an active real estate investor that has portfolios in a few different markets.  I am starting to evaluate a new market and have been intrigued a bit with Birmingham ( I invested strongly in Memphis back in 2010 and 2011 where you could get in strong / premium owner occupied areas and still generate good cash flow) and on very basic due diligence so far it seems like Birmingham has many characteristis / metrics that memphis had a few years ago before the hedge funds and hype change the risk / reward ratio there a bit.

My focus / target for Birmingham would be less the working class neighborhood / formats and more SFHs focused on higher quality (higher owner occupied type neighborhoods, near better schools, rents comfortably over the median rent levels, low crime, etc).  I wanted to see if I could leverage local expertise / investors to better educate myself with where there is a balance of high relative tenant quality / neighborhoods with good cash flow as well.  Want to avoid C areas, but realize A+ areas won't be godo cash flow.  Looking for the elusive sweet spot witha bias to higher quality. I always look for that invvisible rent threshold that seems to divide some of the tenant quality. Seemed to me that rent level in the $900-$1000+ range could be the range that starts to tier tenant quality as I see $700-$800 level to be most common.

I have noticed that there are a bunch of turn-key players that do extensive rehabs such as Birmingham Income Propertues and Spartan.  In some markets, I have built my own ground operations over time and do my own extensive rehabs and in other markets I have partnered with local players like turn-keys if they are truly high quality and offer value that i can't get on my own (e.g if they have so much rehab scale that their rehab costs are far below what I can do on my own, etc).  I couldn't yet get a feel for whether their inventory was in more desrable areas - much of it seemed still in very C type areas.   Any insight is appreicated.  This could be a market that i look to develop a sizable portfolio in, but am still at the beginning of my education and due diligence and always find Bigger Pockets to be such a wealth of knowledge.  And am always looking for local advisors.   I currently have portfolios in Memphis, Chicago, Florida, NY,  Charlotte, and Philly so if I can be of any help to others please let me know as well.

Thank you so much!

Eric