All Forum Posts by: Michael S.

I doubt there would be much demand for an STR outside of Huntsville or Madison city limits - maybe in Athens or Guntersville, but those are 45 minutes away from Huntsville and a totally different market.

John, not sure if you are familiar with the current STR situation in Huntsville, but the city has shut down STRs that are not zoned correctly and also not permitted. Probably best to look elsewhere accordingly, as the availability of properly zoned STRs is quite limited.

@Shannon Allaire - the market here has been bizarre in 2024, especially Q3 and Q4.  I've spoken with multiple real estate agents, property managers, and investors who have all noticed the same thing. 

-Rentals are very labile - some rent in less than a week for more than expected, others take two months or more despite being listed for less than they were previously rented for two years ago

-There is no cash flow in A or B for new purchases unless you want to put down 30% or more, or find a unicorn deal.

-Wholesale deals are all over the place - we've seen some great deals, some ARVs that are ridiculous, and some that are priced more than it would fetch on the MLS

-C neighborhoods are going anywhere from 70 sq ft to almost 200 sq ft in variable conditions.  

-We all selling more than buying because we picked up multiple flip deals but have encountered minimal LTR opportunities to buy in 2024.

-It's been so crazy that I'm under contract for an OOS property in Indiana now with another business partner - never thought I'd see the day where I'd have to look outside of Huntsville for deals

@Lindsay Davis - I appreciate the data and the dialogue.  

I'd rather see a comparison of dollar amounts rather than percentages - they may have similar percents but the absolute dollar amounts should be quite different.  

Let's use a tangible example.

So let's say you and I both own an identical 3/2 SFH - yours is in Decatur and mine is in Huntsville. Yours is worth 150k and mine is worth 250k.

Both appreciate around 20%.  So you netted 30k and I netted 50k.  20k is a sizeable  difference - so I think we can agree that similar percentages don't necessarily mean similar absolute dollar appreciation between the areas.  

Here's the other consideration.  Both houses need a new roof that will cost 15k.  Now your net is down to 15k (10% return) and mine is at 35k (14% return).  That's why I prefer absolute dollar appreciation rather than percent.   

Again, this is just for the sake of dialogue for folks to consider when looking in North Alabama at investments.  

Best wishes!

@Lindsay Davis - I completely agree with those numbers for Decatur. 

However, a disclaimer for those not familiar with this area who are reading this, to be clear, Decatur is its own city and not a Huntsville suburb.  It has greatly lagged Huntsville and Madison in growth and appreciation, and should not be viewed as having the same growth potential whatsoever.  I would only consider Decatur for a cash flow play, not an appreciation play.  

@Jonathan Greene - there was actually a moment in the past when I started wondering if  Reafco owned Bigger Pockets

@Kim A. - patience is the key in this market right now, as many of the deals we've reviewed simply don't work.  Right now, we are on track to sell more than buy in 2024, and likely will buy less properties than in any year since I started doing this in 2017.  Yes, it's that hard to find deals in Huntsville right now.  

@Lindsay Davis

"$150,000 can buy you a tenant-ready 3 bed, 2 bath single-family home in a B-grade neighborhood. You can probably rent it out for between $1,200 and $1,400, so from a cash flow perspective, that’s just shy of the 1% rule that’s often talked about here."

I am going to respectfully disagree with you on this statement.  

This was true back in 2021 and prior.  Current Huntsville market, 150k will get you a 3/2 at best in maybe a C+ neighborhood unless you get a unicorn off market deal.  

If you want a rent ready 3/2 in a B neighborhood, it will be 200-225k at minimum.  Rent probably around 1400-1500/month depending on finishes and exact location.

The number simply don't work well in Huntsville right now.

@Nina Penuela - I couldn't disagree more with the comment "Huntsville is a market to watch in 2024, offering solid opportunities for both investors".

This market has been absolutely brutal in 2024 for investors.  

-Almost nothing works for LTRs.  

-BRRRR is non-existent.

-STRs were essentially eliminated by the city, removing a potential investment class of properties

-MF went from non-existent to overbuilt

-Flips have been hurt by high interest rates and brutally low appraisals.

-Commercial vacancies remain hard to fill

-We are on pace to do the least number of transactions this year since I started REI in 2017.

Not trying to be negative, just being honest and realistic.

@Trina P. - I'm quite familiar with that area of Huntsville, and just took a look at your listing online.  If you'd like honest feedback on the listing, the good and the bad, I'm happy to help.  Let me know if you'd prefer the feedback in the public domain here or as a direct message.