All Forum Posts by: 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.

@Lillian Pintaro - you are correct for high end MFH here.  However, I believe @Cosmo DePinto is referring to SFHs, to which your statement would be incorrect.  

Rental rates are fine for SFHs - I haven't had to drop my rates whatsoever with turnover, nor have I had a single tenant try to negotiate a lower rate.  In fact, I have still been increasing my monthly ask with turnover.

I agree with what @Dena Puliatti said - it is not a cash flow play in Huntsville right now whatsoever, but more of a "break even" cash flow play for appreciation.

Folks, there is a LOT of dysinformation on Bigger Pockets right now about the Huntsville and Madison areas in numerous BP threads right now - more than I have ever seen in the past.  Be cautious on what you take to be fact.  Part of it is because a lot of the long time investors and wholesalers in this market have vanished from BP - as in, haven't posted in months to years.  

@Greg Gallucci - would not recommend looking in Huntsville for MFH right now.  Overbuilt on the high end MFH.  Low end MFH is overpriced for the current rent amounts.  Would look elsewhere.  

@Samuel Coronado - cash flow on new builds here right now is fairly non-existant without putting more than 20% down.  I could see folks doing new builds if they have 1031 money they need to place somewhere and they are putting 30%+ down however.

Way too much sunshine in this thread about the current market conditions here in Huntsville and Madison right now. Unless you are sourcing properties yourself off-market, REI became much more challenging in 2023, and downright brutal since the start of 2024 here.

@Samuel Coronado - the challenge is that there will likely be a very small number of renters looking for a house that size, as well as that can afford a rent amount that high who won't just buy otherwise.  Is your house in 35758?  At over 4000 sq ft, I'm surprised you won't be able to list for a much higher number to net a decent profit, but without knowing more specifics on the house and location, I am speculating here.  Let us know how it turns out.  

@Cosmo DePinto

You've received several responses and pieces of advice, but no one has directly answered your question (until now):

-Has anyone had an any recent success using BRRRR in Huntsville? 

VERY unlikely unless you either source an off-market property yourself or you find a unicorn deal (our last semi-BRRRR was a B-neighborhood property we sourced from an out of town wholesaler in late 2023, but couldn't get all our capital back out on refi).

-Or even cash flowing on a property RECENTLY ?

Zero in 2024 in Huntsville - which is precisely why we bought zero LTRs in 2024 locally (bought one out of state, and bought a local flip property and one small local commercial property - slowest year since I started REI in 2017).

@Kerry Hermann - the posts by @Michael Ewers and @Samuel Coronado were solid advice (I don't know Nita Cook whom Sam referenced, so that's the only part of his post I can not comment on).

I second what Michael said about the market here - it was fantastic from 2017 (when I started) through 2022 - then it really started to crater in 2023 (although we still found some deals), and the bottom completely dropped out in 2024 (found one small commercial deal and one residential flip deal in 2024 - that's it).  We didn't acquire a single buy and hold residential LTR the entire year of 2024 in Alabama.  It's so bad that my last purchase was in Indiana, which was my first OOS investment, and likely will continue to look there if the market doesn't improve here.  

Sam mentioned markets in North Alabama that may work much better right now than Huntsville and Madison, so I would definitely explore them.  I don't have properties outside of Huntsville and Madison here with the exception of one in Guntersville.  

Good luck. 

@Dan H. 

"Question: have you ever filled out a spreadsheet of cost and lifespan of each product of a property? I will predict you have not."

You are absolutely correct - I have never done this exercise.  We do not necessarily plan to keep each of our properties indefinitely, which makes this exercise not as relevant for some of our ventures. 

We never planned to keep our new build for 30 years, which is why we would have never used your cap ex valuation.  Our plan was to rent it for 3-7 years, and then sell it, before a roof, HVAC, plumbing, or even much flooring was in need of replacement.  We sold it after 3 years as the appreciation was so significant, it would have been foolish to hold it longer and roll the dice.  

But I do appreciate you taking the time to explain your thought process. And your calculation makes sense for a property that you plan to keep forever so to speak.

@Denise Lang - would NOT recommend my local market right now unless you can source it off-market.  Numbers don't work in Huntsville or Madison proper right now.  I just bought in Indiana last month given how bad the numbers are here right now.  

@Minh Nguyen - what do those percentages represent?

@Gloria C. - there is no absolute answer to your question.  The data @Devin Conley posted is pretty solid from my experience (I do not know Devin nor how he sourced the data, just going by my own investing experience).  

If you want better cash flow, 35805, 35810, 35816, and 35811 are likely the choices.  But this comes with pockets of C/D neighborhoods, and higher potential for headaches;  in addition, appreciation in these zips has probably maxed out for a while.