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Updated about 2 years ago on . Most recent reply

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Jason Lee
  • Los Angeles, CA
2
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New investor deal Alabama too good to be true?

Jason Lee
  • Los Angeles, CA
Posted

My friend offered me a deal in Birmingham Alabama for 100k single family unit. He said it will rent for $1100/mth to a section 8. over the past few years it’s tripled in value (currently at all time highs). Based on the pictures I saw it looked like a low income area.

Any advice on how I can get more confident in this deal? What would you do or ask to evaluate? Am I missing something or is this a no brainer?

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Anthony Dooley
  • Investor
  • Columbus, GA
1,995
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Anthony Dooley
  • Investor
  • Columbus, GA
Replied

Gathering more information is the smart thing to do. Deals like that are pretty common in the South, but just because it's cheap doesn't make it a no brainer. It is a low income area, which is what section 8 is all about. The question you should ask is, "why havent' the local investors already bought it?" I see wholesalers from out of state do this all of the time in my area. They get a beat up rental under contract because it sounds cheap, then list it for sale without rehabbing it using comparable sales information. Needless to say it doesn't sell. If you are going to hold this property and use a professional manager, this could be a good deal for you. Do you trust your friend enough to buy it blind? Why doesn't your friend buy it?

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