Does anyone have any thoughts on the Huntsville, AL market? I am looking for cities to invest in and need some insight. All comments welcome and appreciated.
Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
7y
@Kim Rose Huntsville is an amazing market and it is very diverse. Literally $50K homes to $500K with in a few blocks. Are you looking for zip codes with top schools or top rent ratio or highest % of home owners, lowest % of home owners ...
Job growth, income growth, rent increases, good rent to sales ratios all create so much opportunity in Huntsville and surrounding markets. Those things also create intense competition. @Brian Boyd the only thing I don't like in Huntsville is the small MF market. It is hard to say any one thing is the worst investment somewhere but I can't think of something in Huntsville that is worse than small MF. One caveat to that is where you are creating an additional unit(s) in an existing SFH. That is a great investment.
Rental Property Investor · Carmel, CA · Member since 2015 · 13 posts · 2 votes
6y
@Gorden Lopes we are moving due to work. My husband is in the military and will be working at Redstone Arsenal. And yes! I would love any recommendations on agents! :) Thank you for the feedback!
Hey @Sophia McMillion, I agree with Gorden - house hacking is a great way to dip your toe in the real estate work. One of my first property deals was a duplex where I lived in one-half and rented out the other.
As far new v. old, there are trade-offs to both. New properties are likely being sold at a higher price, which is going to eat into your cashflow. The trade-off though is that you typically have fewer maintenance issues down the road if you are buying from a reputable construction company. My personal strategy has been to purchase properties that are new to recent construction (7 years old or less). I manage all of my own properties and get a lot fewer calls about maintenance issues because I don't have 70 year old pipes and an electrical system that is older than I am. For me, it made sense to trade some return on investment in exchange for fewer headaches down the road. I think this approach makes particular sense if you are not planning on living in the area long term. Dealing with maintenance issues for a distance, although still very doable, can be a challenge.
As has been stated by others, the market is incredibly hot right now. I've had 3 solid, cash offers, including one over asking, beaten out in the last week. The numbers my partner and submitted on these were still nowhere near where we wanted to be, but were reasonable with a long view.
Given you time line, looking at new construction might actually be a good move. You likely won't have the crazy competition for new construction.
We were using rent to purchase ratios of 0.8% minimum, and planning to leave a bit more in each deal planning for long term holds. The first offer was for cash because we didn't have pre-approval docs to send in. The second one was cash below asking because the project was incomplete and wouldn't appraise as a purchase right away. The third was cash at $10k over asking because it was a very good deal and still made a 1% ratio.
The word back to my agent on the last two were interesting:
The second one had cash offers above asking. There's no rental data available to say that would make our ratio, and it needed ~$25k of work to finish. Near as we can figure, someone is either planning to finish and flip or live in the home.
The third one had "too many offers with escalation clauses that the seller didn't even want to counter" ours. I'm not sure how multiple offers with escalation clauses works, as that sounds like an infinite loop.
Los Alamitos, CA · Member since 2017 · 25 posts · 17 votes
6y
@Kim Rose
Do NOT use AHI property management. We lost 11 months of rents on 2 units out of 4 in 2019. We switched to RCPM (Rocket City Property Management) and they have been pretty good so far. We have had them almost a year now with minimal issues.
Los Alamitos, CA · Member since 2017 · 25 posts · 17 votes
6y
@Brian Boyd
I invested last year in a 4 plex in Huntsville and it performs okay although the first 8 months was a little painful. Most of Huntsville is overpriced now to be able to make good numbers work, but there are some deals here and there if you look hard enough. You have to be careful though because some deals that look good on paper are in bad locations.
Property Manager · Huntsville, AL · Member since 2017 · 302 posts · 246 votes
6y
The Huntsville market is booming! I am a property manager and realtor for both MFH and SFH here. The trick to competing in the Huntsville market is a ready pre-qualification letter and few contingencies. Let me know if I can help.
Huntsville, AL · Member since 2019 · 21 posts · 14 votes
6y
@Oren Kachel
Even cash doesn't appear to work in my experience unless you're willing to throw your numbers out the window. Personally, I'm not. Batting 0-4 in the last 10 days....
I am doing the same and I am not at all worried about loosing on those highly speculative deals! No deal is better than a bad deal, thats what I keep telling to my self.
All the best in your search and hope you close something soon!
Huntsville, AL · Member since 2019 · 21 posts · 14 votes
6y
@Gorden Lopes
Appreciate the encouragement. I'm not worried either, but I am looking at other locales and investments, as well. I agree that no deal is better than a bad one...fought through that for almost 10 years on my first, and it's finally gone positive.
Rental Property Investor · Argentina · Member since 2020 · 15 posts · 9 votes
6y
Hi everyone, new to BP and real estate investing. My RE partner and I are OOS (I'm out of the country actually!) rookie investors looking to make our teeth using the BRRR method on a SFH in the Huntsville Area. These posts have been really helpful and we learned a lot from them. Could we get your thoughts on more specific neighborhoods to look for deals or what areas to avoid. Thank!
Thanks for all the information, can anyone recommend a real estate broker or property manager that has experience with buy and hold investors in the Huntsville area?
Rental Property Investor · Carmel, CA · Member since 2015 · 13 posts · 2 votes
6y
@Michael WIlliams we are currently working with @John White!! He has made the out of state home buying experience wonderful. I chose him based on numerous recommendations and have been so pleased!
Deborah McDonough is an absolutely fantastic investment realtor in Huntsville! She's been finding me deals when all the other realtors are sending junk. Her analysis is spot on, and her pro formas aren't excessively optimistic. She works only with investors, and with her help, I'm making a BUNCH money!
Real Estate Agent · Huntsville, AL · Member since 2020 · 6 posts · 1 vote
5y
@Tomas Buedo Hi Tomas, my name is Sela Davis. I am currently scouting areas here in Huntsville. I’d love to give you some personal feedback of what I find.