Huntsville, AL — Is it too late?

Question

Three months ago, I started looking into investing remotely in the Huntsville market as a summer diversion while I was closing a deal near me.

Now, I started to look in earnest, and I'm beginning to believe that it might be a bad time to jump into that particular market.

What do others (recent and veteran investors in that market) think? Where would you suggest considering instead?

Deborah McDonough · Answer

I'll add that if you're looking for a home under $120k you're probably not going to find one. It will either have enough issues that it won't be worth your time or it won't rent for enough to cashflow. However, in higher priced areas you can expect more appreciation and more cashflow as well as a reward for a higher downpayment. There are still plenty of deals in Huntsville if you shift your price range. In addition, the broad range of people moving here creates a rental market that can go up to $2.5k a month! You just have to evaluate each deal individually for the different pockets of Huntsville.

In addition, many investors are still looking for 1% deals. 1% made sense before the interest rates dropped so low! Run your numbers again on some of these deals and I think you'll be surprised. Happy to chat more with anyone interested. I am a local investor and agent.

Bastian Kneuse · Answer

@Tyler Forsythe Huntsville market is extremely competitive. You will find multiple offers on listings. It is also very easy to overpay - even wholesale offerings go at or above market rate. Make sure you run your numbers. You will find the best “deals” off market through networking and contacts.

Lane Kawaoka · Answer

We have 600 units in 3 Class C and three class B apartments in the area. Rents have been going up during COVID.

I don't think its too late but the world is finally waking up to HSV.

Here are some news this past month:

https://www-businessinsider-com.cdn.ampproject.org/c/s/www.businessinsider.com/best-cities-southern-region-of-the-us-to-live-2020-7?amp

https://pressroom.toyota.com/mazda-and-toyota-further-commitment-to-u-s-manufacturing-with-additional-investment/

https://www.realpage.com/analytics/small-apartment-markets-seeing-big-performance/

https://www.google.com/amp/s/www.bizjournals.com/birmingham/news/2020/08/18/work-from-165m-project-coming-to-huntsville.amp.html

Samuel Garrett · Answer

I have had many conversations about the same topic. A famous quote by the famous hosts of BP Podcast is, "You don't find deals, You make deals". Of course I probably butchered the exact quote. But the bottom line is there are many deals out there, Cashflow play and/or equity play. You just have to stay active, stay connected with a wide range of sources and deals will come your way. I am in the process of cataloging 4 deals I completed in the last three months. I am also in contract on a 17 Unit....not in Huntsville but in the surrounding areas. Happy Investing!

Gorden Lopes · Answer

@Samuel Garrett

Thanks brother for your pep talk! I just found a off market deal for 3/2 1200 Sq Ft 2008 built house in 35811 zoned for Buckhorn high/Mt. Carmel Elementary, buying it for 90K, estimated repair around 10k, ARV 141K and rents around 1100-1200.

Might be a good BRRRR, will post more about this as I make more progress!

Cheers!

Craig Phillips · Answer

I don't think I'm too late to Huntsville at all!  The market there has been too depressed for too long, especially with all the high income jobs coming to the city.  Lots of opportunities for appreciation and cashflow buying near some of the major employers.  My realtor has been doing a killer job finding stuff right on the MLS that will produce good returns.  Just gotta move fast!

Samuel Garrett · Answer

@Lane Kawaoka thanks for the great articles. I have been following your growth in this area as well and it is quite impressive. One of my inspirations. It is funny because I believe you can see my house in the picture of the Mazda and Toyota article, Jk...but I am close by.

It was interesting to see Decatur in the 19th spot of the best cities. A lot of upside if you ask me!

To all, yes, prices are going up, competition is increasing, and it is very challenging to find deals. However, they are out there. I just negotiated on another deal this morning FSBO and I went $10k over what my numbers would have been, however, NO WORK is needed on the home and my exit strategy is Buy/Hold and make it an AirBnB and cater towards the market of Mazda Toyota workers that are still coming here (see Lane's second article).

I will offer, think outside the box, don't just settle for your basic rental strategy, but consider maybe short term rental (Corporate living, Travel nursing, AirBnB etc). Great ROI in those niches.

I stood up my first AirBnb and had 3 reservations totaling 37 days occupancy which equates to a dollar amount of $1800+. The price of entry was $45k (foreclosure), Rehab= $55k (included converting detached garage to make as a separate AirBnb which isn't even on the market yet) and the ARV (Appraisal) was $127k.

So MAKE the DEALs happen!!!

Happy Investing!

Gorden Lopes · Answer

@Samuel Garrett

Thanks for that positive pep talk and congrats on your 17 unit deal! Your message is just what I need to start my morning on a positive note! :D

Agree with all what you said, even if the deals are hard to come by, key is to keep on following the process.

Cheers!

Michael S. · Answer

@Gorden Lopes - that sounds like a great deal;  congrats!

Samuel Garrett · Answer

Believe it or not this was on market and i saw it on loopnet. But the key piece was that this was advertised by one of the big firms in the multi family space. I have also closed a few deals and built those relationships which enabled some considerations.

So again, there are deals out there, it is a matter of you making it a deal from a numbers stand point. And so far, the numbers are looking good on this deal, but will need to be verified through my due diligence period.

Happy investing.

Huntsville, AL — Is it too late?

Most Popular Reply