All Forum Posts by: Jon H.

Hello,
I live here in Birmingham AL. I think this market is a great market depending on where you want to buy in Birmingham. J. Benoit is an expert in the market here. I myself can let you know where to look for properties. J. can probably help you find several in the $50K-$65K range.
I just bought my first rental in the Clay/Chalkville suburb of Birmingham. I would suggest looking for properties in the I20/59 corridor. You could easily buy 3-4 properties here renting them each for $750-$900. Please let me know if you need help in locating some deals here.
Best Regards,

Jon H.

@Lucas Bonasio. Sorry for the late post. We're Getting $750-800 a month on 3/1's. I've interviewed some property management companies and have a few that i'm looking to work with in the future.

Thank you all for your insight. I really appreciate it.

Hey Chad,
Talk to Walter. He can help you.

Hey Brett,
My wife and I also live in Birmingham and are new to real estate investing. Here's how we got started. Before my wife and I got married we started looking for a house to purchase. We found a foreclosure and purchased the house with 3.5% down. The hard part was finding a foreclosure that didn't need so much work that would disqualify you from conventional/FHA financing. We then got married and lived in the house a year. Then we took out a home equity line on our property. Using this money we just purchased our first rental free and clear. We like the Clay-Chalkville Centerpoint area. East lake and Roebuck are ok depending what area your in over there.
Other ways we've found to finance deals. 1st talk about what you do with everyone you know. Ask them if they know of anyone who would like to make 6%-12% return on their money? Doing this will hopefully allow you to find a private lender.
Other ways are to find properties with seller financing. Dawn has offered you a house she has. Finding houses and getting them through seller financing is the best way to buy. make sure you have very little out of pocket costs and then rent them out and collect.
I would begin to market in the areas you want to buy. put out signs, send flyers, knock on doors if you have too. You will find way better deals than surfing the HUD listings. (thats how we found the house we live in now and our rental house.) Anyway come to the AIA meetings and talk to a guy named Walter Baker. He teaches a year long class and will partner with you on your 1st 4 deals.

Thank you so much. I'll look into the commercial loan. I was hoping to pull cash out to buy another property. Thanks

@Caleb Green,
Sounds like a good plan. Here is my suggestion and what i plan to do. I currently just bought my first rental using my HELOC. I plan to save every penny of that money until i accumulate enought to buy a second property. In the mean time I plan to keep marketing to motivated sellers and see if i can pick up a few rentals using seller financing. Also hopefully i can find a house to flip retail/rental(flip to a landlord). Hopefully i will have a private lender lined up shortly to help with the flip. Anyway once i flip the house i plan to use that money to buy 2 rental houses cash. Here in Birmingham AL you can pick up rental houses for 10K-30K. (you should plan to have about 30K into each one when its rent ready). I calculated if i sat back and just collected the rent from my one rental i'll have enough to buy a 2nd in 5years. However if i flip a house and buy 2 more i'll have be able to buy a 4th in a year and a half assuming i don't flip anymore houses. Then i'll be able to buy the 5th after 15months. then the 6th house after a year.
In short I would put the money into an interest bearing account and let it accumulate until you can pay cash for the next one.That way too if you run into any hard times you have a reserve. The low rents you speak of i'm assuming your getting these houses in the 30K range. I would also see if you can buy houses using no money of your own at all. find motivated sellers that are willing to owner finance. You pay them $150-200 a month and rent the house out for way more. Or flip a rental you already own and use that money to buy 2 properties. That is the other option i'm considering with mine.
I'll have about $30K into it when i'm done and i could probably sell it as a rent ready rental for $55 - 60K. I'll use that to buy 2 more and go from there. Good Luck Sir. Let us know what you decide.

@Lucas Bonasio,
I think you should take a look at the Birmingham AL market. I just bought my first rental here for $13.5K. I'll put around 15K into it and it should rent for $750-800 a month. Property taxes are the lowest of all states. My REI on this property after taxes, Hoi, and property Management is 19.6%. You can pick up homes here for 30K-40K rent ready.
As for the Money Question. I'm trying to do the same with my property. I just bought it in April though and i think there is a 1 year seasoning period before i can do a refi. However i did refi my personal residence and used that money to purchase this house. My wife and i are taking a year long Real Estate Investment class locally and my teacher swears by private lenders. Who wouldn't want to make 6%-12% on their money right? Anyway I would consider liquidating your houses in texas. You could buy 18 houses in Birmingham and be grossing $14K a month. Just a thought.

It all depends on your Debt to Income ratio or DTI. You need to be under 40%-45%. The Underwriter will look at all your debt and add whatever the payment is from the Heloc and the payment for the new mortgage your looking to take out to your debt and determine your DTI. If you're below 38-40% you should be good.

Hey Cal,
I'm sorry but i don't see the thread. can you repost?