BRRRR in Huntsville

[Cosmo DePinto]

Hello all,

Has anyone had an any recent success using BRRRR in Huntsville? Or even cash flowing on a property RECENTLY ?

Thanks ! 

[Chris Clothier]

Quote from @Eric Chase:

Quote from @Michael S.:

@Sadler Surratt - just curious, why did you ask Cosmo about looking into turnkey options in Huntsville? I see that REI nation has zero available for Huntsville, and my impression is that even turnkey operators can't make the numbers work here right now. I'm actually curious to hear what REI nation's impression of the Huntsville market is right now.

Following to read people’s thoughts. Not at all bashing REI Nation as I’m very happy with them. But as a data point on Huntsville: my Huntsville property with REI Nation turned over in May 2024 and stayed vacant for serval months. New resident in September for $95 lower rent.

@Michael S.

The Huntsville market is tough right now. We may find a handful of deals this year. We only found a handful last year. However, it depends on an investor's goals as to whether or not Huntsville is a market they should be looking at. Cash flow is a math problem. As we all know, the standard way BP says to calculate cash flow actually leads investors away form long-term opportunity and leaves a lot of investors on the sidelines because they don't understand IRR and the multi layered dynamics of investing long-term.

For me, I love Huntsville, and wish we could find more deals there.  There will be fluctuations on rents and much of it is property and timing dependent and not necessarily market dependent.  As a management company, we also have a duty to get a property occupied with a qualified resident as soon as possible and sometimes that means adjusting rents down for right now to generate revenue.  We can work on maximizing that revenue in the future.

I doubt an out of state investor is going to have success BRRRR in Huntsville right now, but then again, every investor gets to define success for themselves. I do think that an investor should acquire a long-term buy and hold property if they can find them right now because Huntsville is taking all of the right steps to continue to grow. They are investing in infrastructure, housing, public safety and taking the steps they need to take to attract more jobs. It is a small town, definitely a tertiary market right now, but that is where opportunity is going to be found.

I think LTR, in the right location, can provide enough revenue annually to cover all holding and leverage costs while the resident pays down the principle and the demand in the city sustains slow and steady appreciation.  That is a mouthful, but again, a patient investor with the right risk profile, can be successful in Huntsville.  In my book, that is a win over a 7-10 year hold.