All Forum Posts by: Samuel Coronado

Huntsville long term will get a better % ROI than Atlanta. I am biased though. I don't Atlanta is too landlord friendly and the demographics shift it harder to do business everyday.

I have a 5 bed/3.5 bath brick home in Madison, AL. 4100 sqft on a VA loan at 6% with a remaining balance of $404,000 roughly; 28.5 years left. Current mortgage is $2,850, but will be coming down very soon to $2,600 thankfully. Insurance fell dramatically since a new roof was put on and I switched carriers.

I am at an inflection point where I need to decide if I should try to sell or rent it due to possibly moving for a job change. 

If I sold, I think it would be by a hair that I can offload the property for the balance despite a tax value of $440,000, but it would get it off my books completely and free up my VA loan to purchase again.

If I rented, it would conservatively go for roughly $2,500 a month. I did a test to see interest at $3,000 that got some good candidates, but didn't take them through the whole qualification process because it's not ready to rent yet. 

So those are kind of my options- rent at a loss or sell for the balance. We talked about an aggressive paydown at a rate of $5k for the next 6 months to make the deal sweeter for the next person, but renting it would be preferable to that I believe since I can get a higher return on smaller development projects at a burn rate like that. 

A lot depends on your entry price and instant equity. 

I borrowed $30k on a personal loan from Discover for 15% with no fees for a plot of land and paid "cash" for it. I then went to the bank and mortgaged it for the same $30k at 8.5% over 20 years. I paid about $1500 in closing costs between title, appraisal, etc, but the original loan was wiped out in favor of a new lower rate. 

I am essentially in the property for nothing besides closing costs as the land appraised at $45k. To the bank it's a good deal because there's 40% equity in the property. To me it's a good deal because I only paid $1500 for a 45k property. 

The payment is roughly $260 a month. The lot rent from the mobile home that will be on there will be roughly $400. Insurance is $300 a year. Taxes are the $100, so about $290 a month expenses. $110 a month in cashflow. On paper, that's a 88% return before depreciation (can't depreciate land, but you can do a cost seg on the septic and other improvements), appreciation, etc. 

How many times can you spend $1500 to get an 88% return?

Others do this at a much higher level. I'm just a simple yokel from the backwoods of Alabama reading about how you guys are doing things and trying to learn by doing. :) 

I'm here in the trenches everyday. I think it's the best market in the whole country in my opinion. Vanguard and Blackstone have a lot of interest here as well. 

Would love to see the numbers and minimum investment. 

 You can refinance mobile home parks? I have one that needs to be done. 

Hi, Kerry. I would love to meet you when you come out some time. I live around Huntsville, the epicenter of northern Alabama. The Shoals is a great place to settle down and take life slow. Appreciation kind of lags compared to other places further east in northern Alabama. Rents are generally low there as well, but definitely stable. The area has attracted a lot of new young professionals with their work from home marketing that gives $10,000 to qualified families to help them establish themselves in the area. So check that out! I'm not sure if the program is still going on, but has definitely revitalized a lot of the area when it was once destined to follow the way of other older cities that are aging out of existence both in terms of people and property. 

I personally target Lauderdale, Limestone, Morgan, and Madison Counties. I have property in three out of four of those counties including one SFH in Madison, one SFH in Limestone on 20 acres that's being developed to a MHP slowly, and one existing small MHP in Morgan County.

A lot of big developments are happening here and this is the fastest growing places in Alabama. It has eclipsed all other cities in Alabama. Much of it based on defense spending that will likely increase as assets are moved from Colorado to Alabama to include the Space Command HQ. There's also a good amount of manufacturing hubs here. Labor is much cheaper than other parts of the US. A young population plus a growing industry makes for good long term investments, but unless you are really scaling the cashflow can be hit or miss. 

There's a few opportunities to buy quads, tris, and duplexes. Some can actually be pretty cheap. I've also seen a lot of BRRRR opportunities and house hacking opportunities in the Shoals area. Less so in Lauderdale County because there is not a lot of multifamily I can see there, but definitely in the "quad-cities" area.

I have recommendations for lenders and agents in the area that can help your journey as well. They will have better recommendations for any title companies or lawyers there. I haven't actually closed a deal that far west or else I would be able to give more insight. 

Nita Cook is a great property manager in the area for short term and long term rentals. Her husband is also a GC who can help build additional units as needed if you get something that can fit an ADU. Getting a house with over an acre of land isn't too hard for a good price out there.

I did throw out a general offer just to try. The offer was enough where I would have a decent margin for when things go wrong, but it was rejected. I offered $100k cash sale or a $150,000 bank sale. Both were rejected. He's going to try posting with a real estate agent for 90 days and see how that goes. 

 There's two 1500 gallon tanks. The county the property is located in requires 250 gallons of capacity for every bedroom, so 2x 2 bedrooms would have to be on a 1000 gallon tank. As far as I can tell, this may be over capacity and is also a huge red flag. 

I have another one I'd like to discuss. This is 5 mobile homes and one building being remodeled as a storage unit. 4 park owned homes and 1 tenant owned home. The POHs are $800 a month and the TOH is $300/month. Gross income right now is 2700. When renovations are done (the studio and one of the POHs), gross income will be 4000/month (500 for studio, 300 TOH, 800x4 for the POHs). The property is located in a prime growing area in northern Alabama. It's similar to another park I've done well with the last year. Septic, nonpermanent foundations. The seller has considered seller financing with 20% since this is a paid off property. Wondering what the best entry point would be. They originally wanted 360k, but the mortgage would have the property running negative for the foreseeable future until all renovations are done, which I won't do.