All Forum Posts by: Patrick J.

@Jason Cory

I see. Don't the D class areas cost even more in rehab costs once a tenant moves out compared to C class?? What kind of properties do you currently own?

@Jason Cory

So lets say a D class area that is low income. You're saying the highest and best use would be to rent there.

@Jason Cory

That's where you confuse me lol. You said investors lose money in those C class areas long term from renting the properties.

But then you said renting is actually the highest and best use in those low income areas ie the C class locations.

@Jason Cory

When you say "the highest and best use in low income areas is to rent," do you mean from the owners or the renters perspective??

@Jason Cory

Is your opinion to invest in only A class locations??

@Jason Cory

You made some great points I didn't think about. I can imagine the turnover rate is higher than normal and tenants are worse in those areas which creates a lot of headache.

However, I think the $15,000 amount after every tenant leaves is probably an overestimation. Don't you think?? Even though these cheaper homes probably have lower quality tenants.

@Michael Atkins

So renters in that area usually have bad credit?? Is there a higher than average vacancy rate??

I guess if you BRRRR though, its basically impossible to lose money because you could just sell it. The risk is low and cash flow is high.

It makes me wonder why there's always such a large inventory of 80k< properties. I would think investors would be eating up those properties for the cash flow.

@Jason Cory

I kind of get what you're saying but not completely. Are you saying people who buy B and C properties in Birmingham to rent them out are not going to profit from it??

I am really curious about the Alabama market. In particular, why do renters rent for $800/month in Birmingham or Montgomery when they could get a mortgage for $200/month??

Also, why is there no appreciation in those markets?? Everyone always says you can expect "3%" appreciation per year as if that's true around the entire country but then you have places like Alabama with zero appreciation.

What are investor strategies investing in those parts of Alabama?? What kind of cash on cash return are you getting? Do you buy cash or finance? How many years before you recoupe your intial investment? Thanks (: