All Forum Posts by: Account Closed

Hey BP and Birmingham Community,

I hope this post finds you all doing well. 

A few weeks ago I began my first direct mail campaign. A lot of my DM responses come from areas that are considered "C" and "D" class neighborhoods. I'm sure as you've read, the mainstream philosophy on finding buyers seems to be that if you're sitting on a smoking hot deal, then finding buyers ought not be a problem.

Nevertheless, my limited experience tells me that even a "great deal" in these areas are only for those with experience in these particular neighborhoods. Moreover, Birmingham has a huge blight problem so a lot of the calls I field are regarding these 100 year old, grandiose houses that are simply too expensive to rehab and turn into a profitable investment. Other times the property might be in decent shape, but would still be too much to rehab and pull a profit from. 

My understanding of these neighborhoods is that the name of the game is turnkey. Pro-formas from local turnkey companies show that the average product is a 900-1200 sq ft 3BR/1BA house, entirely renovated (i.e., new roof, hvac, etc) ranging in price for about $40-$50k-ish when it's all said in done. 

What I would like to know is how much buyers typically put into these properties? Am I incorrect to assume that turnkey companies have to buy a salveagable structure at $10k tops and have the rehab under $20k in order to sell as a fully renovated turnkey investment at $50k-ish that commands a $650-$750 per month rent? This assumptions means that wholesalers need to be buying recoverable properties pretty cheap (obviously, less than $10k). 

The intention of this post is not to complain; I'm genuinely curiously to figure out how the local market works so I can know what to look for and make things happen. Of course, if you're a Birmingham buyer I don't expect you to divulge proprietary information. However, if I can get a feel for a buyer's rehab numbers and the property they typically purchase to rehab, then it'll be more likely that we'll be on the same page if I try to send through a deal.

Thanks for taking the time to read this.

Best,

Thanks, Ryan.

Hey all,

Here is the property in question:

https://bham.craigslist.org/reo/4757936267.html

I'm operating on the assumption that the property is currently occupied and therefore cashflows.

According to the 50% rule, this property would seem to clear $100 per unit.

It's worth noting that Bessmer is not the greatest area to reside.

Thanks in advance.

S

Hello Everyone,

I hope this post finds you doing well.

My name is Sean. 

A little personal background:

I'm a 27 year-old argumentation coach whose recently become interested in real estate. I'm originally from Virginia but moved to Birmingham for work. I received my B.S. in economics, an M.A. in communication, and am currently finishing up an M.B.A.

Here is my current situation and plan:

I'm looking to purchase a multifamily property (i.e., duplex, triplex, or quad) in the Southside/Highlands/Downtown/Avondale area. Although I don't have a ton of money to throw around, my preliminary research suggests that I can use an FHA loan to finance my first purchase. Given that an FHA loan has an occupancy requirement, after a year of living in the purchased unit, I would move out and subsequently collect a healthy cash flow from tenants.

Once finished, I aim to wash, rinse, and repeat the process all over again 

I know this is easier said than done, but I'm going to try to get pre-approved for a loan in the next few months so I can pull the trigger when the time is right.

My goal:

To create a $3,000 per month passive income stream from my property portfolio in five years.

Thanks for reading my post and I look forward to hearing from everyone!

Best,

S