Spencer: Hey, everybody. Spencer Sutton here, and I’ve got a good friend of mine and a special guest here for this video, Bryan Miles. Today we are going to discuss Birmingham Real Estate Investing.
Now, Bryan has been investing in Birmingham for a lot of years, probably the mid-’90s?
Bryan: Started in ’99 part-time.
When it comes to Birmingham Real Estate Investing he was working for a competitor of ours, trying to buy houses.
We were trying to buy some of the same houses and eventually, we formed a friendship. Bryan came and worked with us and started buying houses for us, then went out and was still buying houses for himself on the side. He was building a rental portfolio.
When the market crashed in 2008, Bryan stuck with it. He helped start gkhouses with Matthew Whitaker.
He was on the front lines doing a lot of property management, and he continued to invest in the market.
Bryan has done everything:
He has done a little bit everything.
I just wanted to touch base with Bryan and maybe ask him a few questions about the Birmingham market specifically. He receives a lot of calls from people looking to him for advice on Birmingham Real Estate Investing.
If an out of state investor finds Bryan’s phone number, which I’m happy to give it to them, they will call him and try to mine for information.
The Birmingham Real Estate Investing market has changed a lot in the past 15 years, back from when I was wholesaling properties.
I stopped wholesaling properties in 2008 when you couldn’t anymore, and from that point forward there has been a lot of out of state investors looking into Birmingham.
Bryan, why don’t you give me an update about the market in general in Birmingham, from an investment standpoint.
Mainly I’m talking about low to moderate income, stuff that we see a lot of out of state investors interested in.
Bryan: Well, it’s high, that’s for sure. We have a good amount of institutional buyers in the Birmingham area, and also a relatively large turnkey provider.
There has been a spin-off of that turnkey provider, and there’s another group that is starting to do it now. There are other groups starting to serve as turnkey providers as well.
With that being said, we are seeing the prices of these house go up a considerable amount.
Spencer: Over the course of what period of time?
Bryan: We started buying again in 2014 and we had some institutional buyers then that were paying numbers we couldn’t believe they were paying.
Even though we thought they were spending a lot of money, they were able to sell and they made money.
There are a lot of people that do what I do, trying to find dirt cheap properties.
Spencer: We started seeing 2013, 2014, these institutional investors coming in, and spent a lot of money buying houses.
I primarily saw them buying houses in Center Point. Is that correct?
Bryan: Yes, you are correct. The Center Point, the Roebuck, Huffman area, that 35215 ZIP code.
Spencer: And the prices went up.
Bryan: Oh, tremendously.
Spencer: So now what I’m seeing, and, Bryan, you probably are too, is out of state investors paying upwards of $100,000 for a turnkey property in those areas.
Whereas before, we wouldn’t pay $30,000 or $40,000 for a good Center Point home back in the day.
Bryan: We just recently bought one and we paid $45,000 prior to the rehab. So we just did roughly about a $26,000 rehab job to it, and it’ll sell for $100,000.
Spencer: On the retail market to the investor?
Bryan: Oh, no. On a turnkey house. Tenant went in, she has Section 8 at $1,022 a month.
Spencer: Wow. So Section 8 has changed as well. Section 8 prices have gone up in the past 10-15 years. We used to get probably an average of $700 a month.
Bryan: Three-bedroom voucher.
Spencer: And now the three-bedroom voucher is what?
Bryan: Over in the western part of town, Ensley, Green Acres, Midfield, we just rented six houses over there for as little as $850, three-bedroom voucher.
Spencer: What about the Center Point, Roebuck, Huffman area?
Bryan: I would still tell you that with Section 8 if it’s a three-bedroom voucher, you can pull $950 over there.
I probably would not take less than $950 in the Huffman, Roebuck, Center Point area.
Spencer: So I will say this, this is what I know about Bryan’s properties, the rehab is phenomenal. You can look at some of his houses on investbirmingham.com.
It is not a rental grade remodel. It is very well done, with new appliances, new flooring, fresh paint everywhere. The end up being very good looking houses.
With that being said, if you think you can come in and kind of throw something together and get $950 a month, that’s not going to happen. The demand is there for your properties based on how nice they are.
Bryan: Also something to mention is if you are a turnkey provider, there are a lot of other investors doing very good jobs with these houses. So you will want to be able to compete with them.
There is a limited number of Section 8 vouchers, if that is what you are looking for. So, you have to do everything you can to go after that particular tenant. Remodeling is one thing you can do.
Spencer: So why don’t you maybe give us a little bit of a tip?
When I talk to out of state real estate investors about Birmingham Real Estate Investing, most of them ask about Center Point. I tell them if they can find a deal, they can buy a house there and be successful.
Are there any other areas of Birmingham that don’t get as much publicity. Areas that are just as good or maybe up-and-coming that people are not aware of?
Bryan: Well, my first area would be East Lake. We are now actually recounting houses in East Lake that I would not have five or so years ago.
We are seeing such a change in East Lake. This little house that we just did on the south side is probably on the retail market at $80,000, $85,000 house. One right around the corner just sold for $160,000 low.
So we love East Lake. It is still a part of town where you can have a good block and then the next block and be rough.
Spencer: Just as Bryan said, it can change from block to block. You have to be aware of where you are buying houses.
If you are an out of state investor, you most definitely need to come to the city of Birmingham to see the area you are investing in.
You should know exactly what you are buying, the neighborhood, the block. If you are unable to come see it yourself, you need to have somebody very knowledgable on the ground who can advise you.
Bryan: Absolutely. I would tell any person interested in Real Estate Investing in Birmingham to come to the city and see what you are buying before you buy.
Spencer: So, after describing East Lake, give me one more market that people may not be aware of.
Bryan: Well, I will always love the western part of town. You know, our Towns or Pleasant Groves, those are great areas.
I am still a huge fan of certain areas of Ensley, one is called the Green Acres area, I love it.
We just retailed a house in Green Acres, little three-bedroom, one and a half bath. It sold for $74,900.
We have investors going in and changing the neighborhood and it is phenomenal.
Spencer: Well, that’s all great information from Bryan who is seeing this firsthand.
If you are an out of state investor and wanted to potentially buy a turnkey property, I would say Bryan would provide you with a very solid house.
I know his work; you can come and see it. There are other good turnkey providers like you mentioned.
We manage houses for different turnkey companies in the city.
Anyway, so thanks for taking your time to talk with us about the Real Estate Investing In Birmingham.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.