All Forum Posts by: Michael S.

Always active in the Huntsville market - that said, have seen very few deals in 2024 thus far. When I see houses in C areas in need of rehab being advertised as 150 a square foot by wholesalers as well as on the MLS, it makes me realize it will likely be slim pickings for a while.

As an investor, why would I want to work with an agent that's closed zero to one property over the past year?  That tells me that the agent in question:

1.  Is not an investor themselves, as they didn't close any deals for themselves

2.  Probably has limited insight or experience with investment properties

3.  Probably has another source of income resulting in them not closing houses and not being immersed in real estate on a day to day basis

I've read multiple articles on this already, and still can't figure out where the millions of dollars in the settlement are going to (besides the lawyers) - are they going to reimburse every person who has sold a property in the last 10 years "damages" from this?  I mean, after all the lawyer and legal fees associated with it, that leaves every seller to receive probably about $50.  Anyone understand what's happening with the settlement amounts in all these lawsuits?

@Neel Patel - I doubt you can get $1600 for the larger unit; for $1600, the tenant could rent a fully rehabbed single family home in a nice area of Huntsville or even Madison proper; the other rent amounts are probably feasible, although again, $1100+ can net a decent SFH rental. I'd run your number with lower rent amounts for those two units.

@Cameron Woodward - The market here is really tough right now - don't get frustrated if the right deal doesn't come along immediately;  while you are waiting for it, definitely get all your financials in order, network locally as much as possible, and keep grinding until the right deal comes along.  Good luck.  

@Engelo Rumora - thanks for starting this thread - has been highly entertaining and a fun read

@Dave Hagen - you've asked some fair questions.  Now, I am a W2 guy, and not in real estate full time by any stretch, but know enough to be dangerous since I've been at this since 2017 and have done my fair share of deals.  So I'll give you some direct responses:

Your first paragraph:  "First, I didn't say you were suppose to be anybody's entire education, or source of leads. But everybody has their own way of learning, talking, and getting things done. I can, and do, read books, watch YouTube videos, and try to come to an educated opinion on how to proceed. Others jump in, head first, and learn from their own mistakes. I'd rather learn from other's mistakes. But while I'm taking time to get informed, others are getting things done. And while you can't compare someone who is trying to get free advice and leads to someone trying to sell you on their services, both are plunging ahead."

Answer - you openly admit you've spent your time and energy to educate yourself. Excellent. The majority of new investors have not. Otherwise, we wouldn't see new BP threads like "Should I do an LLC", "I have 10k and don't know what to do", "I wrote an offer - now what?". I never look at these threads. Why? Because seven million of them already exist on BP, and if the poster took 15 minutes to use the magical search function, they can get their answers. But legit questions that are "higher level" or questions specific to my area or experience, for example, I am happy to hazard a response, because I've learned a lot from BP, and will pay it forward to real investors, not someone who's bored on a Saturday and will never buy an investment property in their existence.

Your second paragraph:  "And what is the matter with, if you are in turnkey solutions, someone asking if you have any leads on other deals? You can't pass along something you may have come across, and weren't interested, to someone else who might run with it?"

Answer - Why in the world would I pass a lead along to someone I don't know, don't trust, and/or haven't done business with?  Zero chance.  We have gotten leads on off-market properties that don't work for us for various reasons - so what do we do?  We reach out to other investors and/or  wholesalers we know from previous dealings and pass the lead along to them.  That's how networking works.

Last paragraph:  "I also must have missed the part where you (the "you" being anyone that disagrees with me... haha) were a beginner, starting out, and learned everything from books and didn't make any mistakes. We all have different personalities that affect how we deal with life. I don't demand anybody change. Just offering my opinions and challenging anyone to consider if a different approach may find business and profit where they never considered before."

Answer - when I started in 2017, I didn't come here and ask for handouts.  I took my time to read the boards, SEARCH for the information I needed, and educate myself.  Ultimately, we bought our first rental, which I learned more from than anyone here could have taught me.  My "mistakes" with this property are what allowed me to be more successful with each subsequent property.  But most of the new investors on here never take the step of buying a property;  so spending time educating someone who will never take that first step anyway - well, it's not a prudent use of time.  

Best wishes on your investing future.

Huntsville AL definitely is an appreciation play right now;  there is no significant cash flow unless you put well over 20% down, go to C/D neighborhoods, do multifamily/house hack, or find a unicorn of an off-market deal.  

@Jarrad Berman - I looked at the DR Horton development online that you were referencing - as @Dena Puliatti noted, that location has potential appreciation long term given the growth in that area, mainly because there is a lack of available land otherwise toward Madison proper and Huntsville.  However, that's if your looking at a 10+ year hold - for right now, I think appreciation will be flat in the immediate future there, especially if builders are now discounting that area because they can't move houses.  

That said, I don't see the rental play in this specific location right now with new construction unless you have capital to bury in house equity - rent in this area will not support over 2000/month on most properties, and the entry point approaching 300k on a lot of the properties makes this prohibitive.

Here's the other thing to consider - a house like that will likely now carry a property tax hit of 3000 to 4000 per year because it is a rental, and not homesteaded, property.  Cash flow simply won't be feasible at all.  

@Jarrad Berman - not enough information provided to answer your questions.  

However, it sounds like that builder can not move their properties given that they are offering incentives - that's a red flag right off the bat that the new builds might be priced too high for their specific location, which could certainly affect appreciation for a while.  If you're planning to hold for 10+ years, obviously that's less of a concern.  

The reason investors locally do not touch new builds anymore is simple - they don't cash flow at all.  Unless you want to put at least 30 to 40% down, then you can force cash flow.  But they won't typically cash flow at all at 20 to 25% down, especially with the significant rise in property taxes in Madison.

Which zip code in Madison?  35758, 35757, or 35756?  35758 typically commands a premium for houses and rent.  

 @Chris Seveney - I can tell you for absolute fact that yes, they do, more than you would expect.