All Forum Posts by: Luke Ache

I have been watching the market trends here closely. It seems like the 20% year to year appreciation that we have seen here in this area year after year may not be possible between now and next year- I am thinking maybe 10% between now and September of 2023 is more realistic?

Housing supply is still very low- I have not seen price reductions affect too many properties in the 200-250 K range in Madison which is my preferred area. However, I am seeing price reductions affect properties in the 300K and higher category.

I have found the "sweet spot" to be right around 250K right now in Madison- The only strategy that seems to make sense for me in this market is to buy a property in a desirable area of Madison that needs minor repairs, fix it up and try to force appreciation on top of natural market appreciation which will continue to be driven by high demand and low supply.

If anybody has been successful in this market doing anything else, please share?

@bobstevens. I hope you found a system that works for you. Just the thought of having to deal with evictions makes my stomach turn-I absolutely  believe in focusing on quality of tenants. I rent in an apartment complex that was rated #1 in the whole state of Alabama, it is called The Collins, they are extremely selective, their occupancy rate is close to 100%, evictions are unheard of. I consider this a "model" apartment complex.

The problem with your approach is that, the cheaper you go, the lowest quality of renters which translates to all kinds of problems. Here in Alabama, there are plenty of cheap multi family properties but the vast majority are Class C and D. Here in Huntsville, I have yet to see a multi family property in a decent area.

Birmingham and Montgomery have a lot of dirt cheap multi family homes but they are almost all in low income areas. Also bear in mind that it can take a long time to sell a multi family property, even harder if they are in a not so desirable area

Thanks a lot, Chris!

I went to Birmingham for the first time this weekend to assess the current market and try to spot opportunities. I liked the city, it has a lot of potential, there are a lot of distressed properties and vacant lots in great locations, very close to Downtown and the UAB campus, gentrification is already happening but I would study the market and economic trends before investing there. I work with an investor that is originally from Birmingham and he thinks the potential is there although, there are issues with property crime in certain areas- If you have not been there, it is a housing market worth studying in my opinion.

@David M. Oh, I don't disagree with anything you stated. I am just saying that the current market here is going through crazy appreciation due to very low inventory and Huntsville was just named the best city to live in the US, a lot of people moving here to work in Aerospace. "Everywhere" has appreciated 20% last year- I am not sure if I agree with that. I have lived in places like Nebraska and Iowa- If you take into account inflation YTD which is about 9%, I would argue that least desirable areas of this country probably had negative appreciation last year- Huntsville is probably one of the top 20 markets right now.

@Chris Seveney Homes here in Huntsville have appreciated 20% last year. I usually would not recommend this type of product to a person looking to buy a home in a regular housing market with the intent to live in it and pay it off but right now, most investors here in Northern Alabama are focusing on quick appreciation, the Huntsville, AL metro area right now is booming.

Hi all. I have been looking at some credit unions here in the HSV area that may offer some better terms financing than big banks and Redstone seems to be a good option-they have an agreement with my current employer, so I am leaning towards opening a personal and a business account with them.

It seems like they have a 105% LTV loan option- I used to do mortgages back in the day and I don't remember this product at all- the interest rates are high obviously but if you are looking to refinance to cash out in a few years, it may not be a bad option.

Is this essentially a "no money down" type of loan meaning the down payment, closing costs and points are already rolled into the loan? Or is this a first mortgage backed by a high interest second mortgage? I am trying to understand how this may work. 

Michael: I totally understand what you are saying, that is why I am very hesitant to make any investments until I understand this market better. If I were to make an investment today without all the knowledge, my gut feeling is that Madison, 35758 would be the safest best, the most attractive area with the most potential so far from all the areas I have been to, I may be wrong though haha.

I went to New Market also and I can see some potential there too but there is still a lot of agricultural properties mixed in with residential- saw a few abandoned homes in the middle of a residential area which is a bit strange coming from the West- there are some nice homes on Hurricane Rd between New Market and Maysville

@Dena Puliatti Thanks for the helpful insight. It will help me narrow down on investment strategies that may work best in this market. The market here is unique and completely different from metro Denver- I would not hesitate to buy a place in the 200K-250K range with potential since it seems like the prices here are slightly inflated but still within a realistic range.

In Denver, it was impossible to find anything that was not overinflated. I lived in a small town in the mountains called Central City, CO- the population was 530 and the average home price there right now is 400K, absolutely insane!