BRRR - Jackson, MS vs Birmingham, AL

[Jason Y.]

I am narrowing down to develop a BRRR strategy with a local team to invest in for the next few years. I have narrowed down and looked at high Cash on Cash returns in two very similar cities. Birmingham Alabama vs Jackson Mississippi. Both seems very similar on low appreciation (not very high) and average price of single family residence homes (pretty low). Income levels are about the same. Rents are surprisingly high compared to the cost of the homes, which is why I am looking at these two cities now vs higher cost areas like Kansas City and Atlanta. I read that vacancy rates are high, both in the 17-22% which worries me. I am not sure why vacancy so high? I am not sure about the job growth. Alabama is a college town so there are always students to rent to. Seems like jobs are mainly medical and college type jobs. In Birmingham, there seems like there might be areas outside to invest in, if Birmingham gets dried up. We don't know anything about Jackson and what immediate local areas that are outside of that city. Seems more limited.

My goal is with a cash investment, I am targeting single family homes in the price range $50-$150k. Then rehab, rent and cash refinance. I want to establish a good and reliable team (agent, property manager, contractor) who can help me find distressed properties and fix and rent and manage. And do this for the next few years. Since the two cities, looking at stats and numbers, seem very similar, it might just come down to finding a great team that is willing to work with while we build a portfolio. Buy, rehab, rent, refinance, manage, and repeat.

Can someone help me understand the dynamics between this two cities and what makes BRRR better in one vs the other? Please reach out so we can have a conversation. Thank you in advance.

[Jay Weathersby]

I grew up a large portion of my child hood right outside Jackson, MS. I don't think homes will appreciate enough to successfully implement the BRRRR strategy. Most of Jackson is low income and below the poverty line so yes cheap homes are plenty. I would say areas surrounding Jackson would be your best bet. Those areas are Madison, Brandon, Pearl, Flowood, Byram, Ridgeland, and Clinton. I am not familiar with Birmingham but it seems to have way more going for itself than Jackson. It has UAB and their building a brand new football stadium in downtown. With that being said I would say Birmingham is the better choice.

Also I have plenty of contacts in the Jackson area to assist if you decide to go that route. Just let me know and I can provide contact info.