lystn

In this episode, Michael Atkins with Harris & Atkins Real Estate tells us what we should know about investing in the Montgomery market. Learn about the particularities of the market, return metrics, the school zones, taxes, common problems, and what you need to do to win in this rising market. Michael Atkins 334-318-0570

---

Transcript

 

Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor Podcast is for informational purposes only, and is not intended as investment advice. The views, opinions, and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.

 

Michael:

Hey, everyone, welcome to another episode of the remote real estate investor. I'm Michael Albaum, and today I'm joined by my co host, Mark Woodling. And we're going to be talking to our certified agent, one of our certified agents out in Montgomery, Alabama, Michael Atkins, and he's going to walk us through everything our buyers need to be aware of when they're investing in Montgomery. So let's get into it.

 

Michael Atkins, thanks so much for taking the time out of I know you're very busy schedule to join us today. Really appreciate it.

 

Michael A:

Yeah, yeah. It's nice talk to you guys.

 

Michael:

And you are down in Montgomery, Alabama, right?

 

Michael A:

Yes, sir.

 

Michael:

Fantastic. And I know that Mark, and I know a little bit about your background, but for all of our listeners who are new to would love to hear a little bit about who you are, where you're come from, and what your background is in real estate.

 

Michael A:

Yeah, so um, I got my real estate license pretty much as early as I could. And so I've been practicing for about 15 years. But when I started, I had a lots of hair, looked like a kid, no wrinkles on my forehead. And, you know, out there trying to advise people on buying and selling real estate and so that here's this kid trying to tell us what to do just didn't go over very well.

 

Michael:

I know how that goes.

 

Michael A:

Didn't have a whole lot of clients. You know, I ran across these folks that have owned about 20 houses. And they were looking for a new property manager. And they're like, Hey, you know, if you'll manage our properties, we'll buy houses through you. And I was a, I guess they found a great sucker for that. Sounds like a great deal.

 

And so I had no training, no experience, no, no, property management software, I just got like a box of keys. And, you know, hey, go have at it. And it didn't take very long for me to figure out like, Hey, I gotta figure out some some kind of system. And so I started operating with -inaudible- was buying them more properties, picked up some more investors. And this was kind of at a time when, you know, probably everybody that's buying a house right now would love to about bought everything on the market at that time. Most investors I ran across, didn't know what an Excel spreadsheet was, you know, the house looks great. Yeah, I'll pay cash. Let's just buy it.

 

And we're negotiating 5-10 $20,000 under list price. And there was no real strategic math problem that we're doing about purchasing properties, what we can rent it for. It was it was just kind of hey house looks nice, good bones, rent it for around this number. Sure. It sounds great. You know, so got up to about 80 properties, I was managing about 80 by myself. And it was a, it was a lot to do then it just felt like I was going from one emergency to the next of you know, hey, these people haven't paid rent, we got to start the eviction process. Oh, by the way, $1.38 over on this account, so it means I made a mistake someplace else. So I need to spend the next three hours figuring out what went wrong where and then, you know, now we got a bunch of vacancies. So I had to supervisees guys remodeling the houses, so I can get it back for rent. And now my phone's exploding because I have, you know, so many properties vacant need to rent.

 

And it was really like, oh, man, I'm, I'm, I'm at my, my peak of what I can handle. And, you know, I ran across another guy, Blake Lawley, he's my business partner with the property management company. And he was really passionate about property management. And we decided to team up and we grew it from, you know, he had 100 properties he could bring home. And that made us to 180. And we kept growing and we've been together for about three years now. And we're up to about 680 properties.

 

And so we have a whole team and staff to help take care of the different aspects of property management. I don't I don't have a whole lot of responsibilities in property management now. But um, you know, I've definitely been in the trenches, showing the rentals, meeting the people very familiar with most of the neighborhoods and Montgomery can go street by street and say I know that house I've been in that house I've been in one across the street. I've sold that one for that this one rents for this, very familiar with the market. That's kind of my background. That's that's how I lost my hair.

 

Michael:

And did you grew up in Montgomery?

 

Michael A:

Yeah, yeah, yeah. I grew up in Montgomery, went to Hooper Academy, a little bit south of town. And, you know, went to Auburn University, Montgomery, got my bachelor's degree there, and been practicing real estate here ever since.

 

Michael:

Awesome.

 

Mark:

That's awesome. Hey, Michael. And one of the things that you told me that really impressed me when we first started talking about bringing you on as a certified agent, is you knew every agent in town. So anytime an offers presented, you can make a phone call and really get that little bit of extra information that helps our buyers know where they need to be when making an offer. So I was always impressed with just your your ability to communicate. So being from the area and down in the trenches as an investor and property manager. That's, that's rock solid. And what we're looking for, for our buyers.

 

Michael A:

Yeah, is due to the volume of transactions that do that really allows me to interact with other agents. And, you know, I'm looking at the market every day. I mean, part of my routine in the morning is look at what properties just came on the market. And I'm looking at the agent, I'm looking at agent notes, and I'm trying to say, Hey, is this a deal? Do I have somebody interested in this? Would this be a good investment property? And, you know, that's, that's just part of my daily routine. Of course, I'm not looking at every house on the market, there's not a bunch of 300 $400 million investors out there.

 

But you know, the properties that are basically, you know, under 200,000, those are the ones I'm looking at trying to figure out, hey, would this be a good property for an investor to pick up add to their portfolio?

 

Michael:

And Michael, I'm curious, are you an investor yourself? Or having seen the industry? Are you so like turned off by it?

 

Michael A:

Oh, no, no, I'm, you know, it listening to your podcast is about maybe a way to budget money and save money, I would say that that's part of what is a move me to be a, an investor, because I didn't want to be reliant upon only my commission. So I felt like that could be a little bit of conflict of interest. So like, if I had a buyer that's looking to buy a house, and I really want them to purchase this house, because I got a car payment coming due.

 

So I sell real estate because I like to, I'm at the point where I'll enough investment property, so I don't have to go out there and work every day, I have income coming in from our rental properties in so you know, I'm indifferent. Whether you buy this property or not, the commission isn't something that is going to make or break this month for me. It's, I'm really passionate about real estate, and helping people get properties, investment properties or personal homes, because of the actual, you know, helping them. It's not so much about the Commission, the commission is part of the equation. But if I don't sell, you don't need to send me a thank you letter for. So I can pay my rent this month or payment make my mortgage payment.

 

Michael:

That's such an interesting point, I talk I asked this question of every agent, every property manager we speak to, and often get feedback and pushback from a lot of our listeners or other buyers and say, Well, if that property manager, that agent is also investing in real estate, why would they give a deal to me? Or why wouldn't they handle their own vacancies? First? And the answer that I've always given is, well, they understand the business there, if they're an ethical person, they're going to be treating you right. But I've never heard that answer before, from the sales side is, Hey, you know, I don't really need this commission, I don't have to sell this property to you to help, you know, feed my family or make my my payments. So I love that. And I think that's an even even more of a reason to work with folks that are investing and also either managing or selling properties. That's great, man, I love that.

 

Michael A:

So when I'm talking to a buyer, and I can feel that anxiety, or the nervousness, and you know, it is natural, I mean, you should have a little bit of anxiety or nervousness. And, you know, when I hear that or fill it, I want to go ahead and get to the point like hey, what, what, sir, where are we nervous about? You know, and so if there's something that's given them anxiety, we need to go ahead and air it out, figure out what the problem is, and see if we can't work around it or, or, you know, sometimes it can be super simple. You know, hey, I'm worried about this AC going out next year. Well, you know, while we get a home warranty, or let's go ahead and have an AC man, go out there and service it and check it out. Give us an estimated lifespan.

 

Those are just things that are kind of You know, it's not one of those things that I want the sale to happen so bad that I'm trying to overlook the little points of anxiety. So if we have anxiety, let's go ahead and talk about it, get it out there, get it figured out, you know, at the end of the day, if the sale is not, you know, if it's something you're not comfortable with, we don't need to do the deal.

 

Michael:

Now, it's great. That's great.

 

Mark:

Another thing that Michael and I had talked about when when we brought him on board was the having the property management background is such a key part of who he is, and how he fits into the model. He's not just selling you on a property, but he wants to see a long term relationship Go on, and potentially be the property manager for you. So he's not just gonna put you in a property just for the sake of the sale, like he's saying, but that property management piece is also an accountability piece where, you know, you're gonna be talking as often as you need, because this, this relationship could go on for a few years. So yeah, that's where we saw that the lack of pressure that Michael was putting on, but he's got his sales skill down, as you can hear, but it's not so much where it's a pressure situation. So that, although you know, people need to move quickly, and you got to put a little pressure on him in that instance, but maybe not so much about the pricing part.

 

Michael A:

Yeah, there's always a sense of urgency. So I mean, it's, it's almost, the transactions just have a natural progression, and you're trying to push it along, make sure we meet the estimated closed date, I think that if I wanted to convey something is that I don't need this commission. And I'm not pushing you to buy this house. So I can make commission, I'm pushing you to buy this house, because I think it's a good investment for you, or it's meeting the goals that you have.

 

Michael:

Now, I love it. And Mark, you bring up such a great point. And one of my personal biases, and preferences, frankly, is to work with agents who are property managers, or property managers who are agents, because let's just call a spade a spade agents get paid when they sell. That's how they make their money and property managers get paid when they manage. So if I can hitch my cart, to the property manager, and an agent, I know that that agents not going to sell me a lemon. Because if the agents only an agent sell me a lemon, they move on, well, they got their commission, they can call it a day. But if the agents a property manager also, and they sell me a lemon, well, now you just sold me a headache, and you just sold yourself a headache.

 

So I love the duality of that. So for any other agents listening out there, I encourage you all to look into the property management side of the business to because I think it is such a beautiful marriage. And it can often be so symbiotic. You get the short term commission aspect, and then you have that long term relationship as well, which, as Mark, you mentioned, can be so powerful.

 

Michael A:

Yeah, I mean, the last thing I want to do is sell your product that we're gonna have weekly discussions about the problems in property, and and yeah, yeah. You didn't notice this? Well, no, I guess not. It's one of those things, I'm really trying to find you something a good solid property. You know, there's a million different aspects to single family rental, but um, you know, trying to catch the big ones.

 

And then there's a, so I looked into property the other day, and it had several large pine trees in the backyard. And the pine trees don't bother me so much. But one of them was leaning over the neighbor's house, and it was a strong link, it was a very noticeable lane. And, you know, I was thinking, I was like, man, gravity is going to work eventually, you know, that it's not going to go away. And so it's one of these properties where, you know, that tree needs to be addressed. And, you know, it might slip through a home inspection, or, you know, somebody may look at it, not notice it, when I'm there and I'm seeing it, it's one of those things that, you know, we could argue over which insurance company is going to take care of it, but it that's a headache for somebody coming down the line.

 

And it's better to go ahead, talk about it, figure it out. Now, on the front end, instead of, you know, having a very frantic tenant, and, you know, lawyers and insurance agents calling you in six months about this tree.

 

Mark:

Oh, I was just going to suggest, you know, moving into kind of the market areas, because that's the part where I'm really interested. The properties are, you know, really going to come and go on the Roofstock. But part of what I was gonna say is, you know, we've found Michael after we found Montgomery, so sorry, Michael. Yeah, we had had to research the market first. And then we found you as one of the better agents in the area. So we reached out but, you know, one of the big things about looking at markets with Roofstock is, you know, we're looking for economic trends and a lot of really, you know, really sweet spots in markets that maybe there isn't a large institutional investor presence or ibuyers active and we found Montgomery. But what I want to say also is that it It's actually the third capital that we've done a podcast on in just the last, you know, few podcasts.

 

So we started off in Columbia, South Carolina, we just talked about Jackson, Mississippi. And now we're talking about the capital of Alabama, which is Montgomery. So, you know, part of the research I did was, hey, it's the second largest city in the state, you have, you know, government institutions, you have, you know, military presence, you have Hyundai as a major manufacturing facility. And all those things are flashy to us. But going a step deeper, maybe, Michael, this is a good opportunity for you to give us a little little information about, you know, what's happening in Montgomery that you think is really leading to the growth leading to job opportunities, or just the overall kind of investor sentiment that our buyers would want to hear about.

 

Michael A:

So we are home to the state government, that's one of our largest employers in in the city. We also have Maxwell Gunner Air Force Base. And part of that is their air war college. A lot of military guys who get stationed here for a year or two, and that's kind of important because they just, they're coming down for a short period of time. And it may be, it's probably not long enough for them to consider bying so they're part of our tenant base, and they'll come in every year. They'll be here for about a year, and then they leave. And usually they're great tenants. And they usually like the nicer rentals.

 

We also have a Hyundai manufacturing plant in town. And they employ a lot of employees in you know, not only does Hyundai but some of their tier two and tier three manufacturers as well. You know, I feel like those are our major employers right there. We have a couple of universities like Troy State University, Auburn University at Montgomery, Alabama State University, I was looking over some of the Census Bureau statistics, and I think 33% of our population has a college degree. I thought that was kind of high, maybe wrong. That's kind of the demographics to the city.

 

One of the things that we're known for is our property taxes are one of the lowest property taxes in areas for the country. I think why is known for it, but I imagine the prices, they're pretty, pretty expensive for why we have low property taxes. One of the things, a negative thing we hear about often is the school systems. The schools in Montgomery usually don't are in the red side of the level on Zillow. They're they're not, they're not going to have the five star schools for the most part.

 

But I think one of the, you know, the things to, to look out for that is they just passed a property tax increase. So it just talked about how low that property taxes we're in, I'm telling you about the increase in property taxes, well, they they passed, I think is a 10 mil increase. And so on average, that should be about about a $12 increase per month for the average house in the Montgomery area. And in doing that, they're going to raise several million dollars. So it's going to go towards the school. I think it's 33 million annually. And that's a, I think that's going to go a long way. And I think when they passed that bill, it came with some checks and balances to kind of hold the school system accountable to try to make sure that that produces results to increase the schools.

 

And so, you know, some of the investors that come to town ride around and, you know, the feedback I get from them is like, hey, Montgomery feels like this city, they exploded, you know, you know, a couple years ago, and it seems like you're on the cusp of that. And so I think there's several things that we have going on that that should lead to a productive and good, you know, positive manner moving forward.

 

Michael:

That's great.

 

Mark:

One of the things real quick, Michael is I studied the census as well, just before this call, and I saw that in the state of Alabama 68% of the population are homeowners and then looking at Jefferson County, which is Birmingham. It's 63% but Montgomery is 58%. So I think exactly to your point about the military base. You do have a revolving door of people coming and going all the time. So that will lower that but these are very high. They're just high quality renters that you're getting in that are looking to that higher price point.

 

So that's really interesting and makes makes me feel more comfortable in not going after those, you know, eight 9-10 percent cap rates but really feeling comfortable one, you know better neighborhood area scoring areas, with a little bit lower of a cap rate but still getting the solid return With the low tax base, and so forth, so all those things together add up, and definitely are reasons why we wanted to come to your market.

 

Michael A:

Yeah, and I'd say there's also influx for people from out of state as well, on just helping retail buyers find the house for them to live in. I've run across from a lot of people from out west, like Washington, Oregon, Colorado, and they're moving this way, they've sold their house, and they have a lot of equity that they built up over the years, and they're moving here. I've talked to people from Florida, have somebody from Boston right now. And, you know, since COVID, you have a lot of people that are working remote, so it allows them live anywhere in the world, I have a lot of low cost of living here, lower property taxes, and they can come to Montgomery and buy an amazing house for a reasonable price. And, you know, I'm seeing that a lot, as well.

 

Michael:

And, Michael, I'm curious to know, and for all of our listeners, kind of a couple different questions. So one, what is a typical purchase price, if you had to describe it for, say, a three, two single family? What would that property rent for? And then the third part of that is how should someone be calculating their property taxes as an investor, go?

 

Michael A:

Okay, um, so like a three-two brick ranch, you know, usually we're looking at anywhere from probably 79,000 to 130-140,000. And the rent range, for the most part, it's going to be around, you know, 850 to 1100. And most of its gonna come right in there, you know, maybe in the property manager, I want, I want to tell you that 995, I want that $5, under 1000, just because it sounds good, I don't know.

 

So, um, but, you know, Montgomery East is a little neighborhood that's pretty popular, those those houses are three twos, probably 12 to 1600, square feet, and situate, they're built in the 70s, and 80s. And they're gonna sell from anywhere from, you know, 80, to 120,000. And they're just great little, great little areas, they rent pretty darn quick. The price is the first metric you're looking at. And so, you know, there's things like renovating the kitchens, just putting in stainless steel appliances, or maybe, hey, let's go redo the tile in the bathroom, change it from this baby blue, green, to maybe a nice, clean, white looking tile in there. And that that changes a lot. And those things can usually be done within a few $1,000. And that may increase your rent 100 $200 a month.

 

Property taxes, the county revenue side is probably a really good asset for that. But whenever I'm putting these properties in, I'm trying to put the property taxes in there. And so, you know, a lot of times the property taxes are, you know, 2-3-400 dollars. And so usually, you know, even if they doubled, it probably wouldn't be a large metric for you to mess up your equation. The property taxes is generally a lower amount. I've had people from Florida, tell me that they pay $1,000 a month in property taxes and just could not take my word that this is the property taxes for the house.

 

Mark:

It looks like what you charge on a monthly basis in most states. So yeah,

 

Michael A:

Yeah. Yeah. So um, the smallest metric that you're gonna have to look at when you're trying to plug your equation in of what my are gonna be. And so on. Roofstock, I'm plugging that information in, I'm checking it, I'm verifying it, it's a number that you can be relatively, you know, deem it reliable.

 

Michael:

Okay.

 

Mark:

So I think that's a that was a great way to cover, you know, the basic everyday, you know, properties that you run into. But tell us a little bit about maybe two two things, one's caveat mtorr. Really, which is unique to Alabama and few other states. But also what are the most common issues that you run into, because I think we could paint a pretty rosy picture for everybody, but it's always good to see the things that you see most commonly come up that aren't a deal killer. They're things that you see all the time. So maybe you can you talk a little bit about those two things.

 

Michael:

Mark, do you speak Latin?

 

Mark:

For one sentence? Yeah, that's when you need to remember I'm an auctioneer. So as is where is those? Those are all things that are written in stone.

 

Michael:

You get burned once and you learn the hard way. You never do it again.

 

Mark:

That's all right. So that's it.

 

Michael A:

It basically means buyer beware. And so, you know, it's, I think that any buyer looking to spend this amount of money is going to take a certain level of precautions, and check out the house to a certain level. So you know, it's just basically saying that this sellers selling it as is. And so, there's a lot of facets to a house, and you're gonna have a home inspection, you know, most of the time, you're, you're already checking these things out.

 

So it is pay, I mean, it's telling you, buyer beware. But these are things that you're already gonna do. You know, if you're in California, New York, or Texas, Mississippi, in your buying and investment property, you're likely having it inspected, you're likely kicking the tires, you're having a professional look at a house and tell you what to be aware of, you know, in other states, you may have to disclose certain things or write a seller's disclosure here is not required. And it just kind of puts the burden on you to go over there and make sure the house is, you know, is what it is. And that's part of the reason why an inspection period is important and having an inspector go out and do a thorough job. And check it out. trying to think of anything.

 

So you know, it is kind of funny, a lot of the houses I bought, I don't get a home inspection. Yet, because I'm buying the most terrible house I could find it's, it needs a roof, it needs an air conditioning, it needs everything is what if something's wrong? Well, I already know it's wrong, it is broken, the whole house is broken.

 

Michael:

I want it to be wrong.

 

Michael A:

There's no need. Yeah, the home inspector is not going to tell me something I don't already know. Because I know that I'm gonna have to redo the electrical, redo the roof, probably gonna go in there and have some plumbing problems I had to figure out. And so, you know, that would be an instance where I'm taking all the risk, but I kind of already know that I'm at risk, because, you know, the house needs a ton of work, obviously. So

 

Mark:

So for the everyday buyer, maybe buying a more turnkey property or something that is rent ready, what are the most common issues that you would run into that, you know, really are common for, let's say, Alabama, you know, in Mississippi, we're talking about being kind of a little bit of swamp land. So foundation issues could be occurring a bit more often. But you know, is there anything that you see in the inspections for these more rent ready properties that you would just say is part par for the course?

 

Michael A:

Yeah, so the houses are, I call them the junky houses, because they're, they're in terrible shape, I would never put those on Roofstock. Because it's, if somebody wanted to buy this remotely, I would just insist on them flying here, like, you got to come look here, I don't like you need to see this in person, or you need to look at it. And then the second part of it, it's just not practical for them to buy something that they're gonna have to run contractors and make sure that works done because the purchase price is such a small basis compared to what will need to be spent to get it into a livable condition.

 

You know, the average property I'm going to put on Roofstock or putting forth to investors doesn't need much work. I assume that all properties need work in normally why I say it is, hey, you can come to the house I live in is in pretty good shape. But I think I could spend $1,000 right now today on fixing normal wear and tear. And so when we're looking for properties, put on Roofstock, I'm looking for the ones that need you know, not much work, you know, no capital repairs that is apparent, and then we'll rent well, and those are the main things I'm looking to identify when I'm looking for a good property for an investor.

 

And as far as the local areas kind of pitfalls look for, you know, we're in a subtropical environment is really humid here. We do have some, some of that gumbo soil where the ground will, will shift and move there different parts of our city that has different types of soil. Some of its more stable and you hardly ever seen any kind of foundation problems. Then other parts were you're driving up and down the road. And I remember talking to an inspector is Hey, look out there at road you see how it shifts and moves and it's kind of bumpy. So yeah, and he's like, it's doing the same thing underneath these houses. And so it's like it makes it real apparent where you might have foundation problems.

 

And some of the older homes that are constructed, you know, 70 100 years ago, you hardly any of We're on a slab, there on a crawlspace pure foundation, you can get up under the house, if the foundation moves, you can jack up up here and level out the house. Those don't concern me so much, because it's something that's easily fixable, you can get under the house and kind of level out the foundation or add a pier if necessary. A lot of movement that you notice in those houses might have came from where there was a water leak at some plumbing leak at some time, and is saturated ground appear sock and now the the foundation isn't exactly plumb.

 

And then, you know, there's areas of the city that has slab foundations, and there's a lot of movement. And you know, I'm going to veer away from those, you know, it's not so much about whether the tenant can live with a crack in the wall. It's almost that, hey, we go in there, we renovate the house, we paint it. And then six months later, we have more cracks, or all of a sudden we have a pipe that's broken into slab because the foundations moved in.

 

So those are things that I'm kind of nervous about. You know, I've also run into it where maybe somebody added on a house, I mean not house added an addition on to the house. And so they've had that addition in, but they didn't, you know the foundation wasn't set at the same time the original house was or they tied the bricks in, in. So now you see cracks in the bricks, or the addition is settled. Now I suggested the main house a little bit, you know, I'd go case by case on those because sometimes you can get a deal, you know that, that there's been some settlement there, but I don't think that it's going to affect the plumbing, or the house is gonna fall down, or there's any structural thing that's gonna make the house collapse.

 

But again, that's just my opinion, it ultimately it'd be up to the buyer. But it's one of those things that if I see any kind of cracks, or any kind of foundation moving, I want to air it out, I want to talk about it and say, Hey, this is what I'm seeing. And do you feel comfortable? Do we need to get a structural engineer out here to check it out. But, you know, the foundation is something that I look at it is very common in the Montgomery area. And, you know, it's a house by house, street by street thing. So I don't want to point out to one specific area and say, hey, these houses over here are all bad. It's one of those things that you just kind of have to be on the lookout for and check it out.

 

You know, something else that I think doesn't get a lot of attention is, you know, trees on the fence line, you know, those things can be expensive, they can be a few $1,000 to take those things down. Um, you know, whenever we're turning over property, that's one of the things that I try to pay attention to, and especially on my personal properties, like, hey, if there's any trees have grown up along the fence line, maybe my tenant hasn't paid attention to it is, you know, heck, maybe they like the tree, I don't know. But now it's the size of my arm, but it's gonna grow the size of a, you know, become a big problem eventually. So why don't we go ahead and trim that cut it back while it's a small inconvenience, rather than let it grow into a big problem.

 

Wood rot around the facial soffit or the brick molding around the doors. Those are pretty common. I mean, I think if we looked at 10 houses, I can find, you know, a little bit of wood rot on the face, or soffit or brick molding somewhere on none of those 10 houses. And so those are the things that aren't real scary, but it's almost one of those things that I just want to set your expectation, hey, just just because there's a little bit of wood right there, that doesn't mean the house is bad or the house is gonna fall down. It's just one of those things that we need to go ahead and address it.

 

Termites we have termites here. Some of the older houses for whatever reason, they don't tend to get termites that often. I don't know if they are they use some kind of strong chemical when they used to treat the older houses.

 

Mark:

Asbestos and lead maybe.

 

Michael A:

Yeah, you might not get termites, but you might get cancer. Um, but uh, you know, it wouldn't be uncommon for us to go look at a house and find termites and during the wood infestation report, and that's basically a past guy going out there. He's licensed by the state, and he's looking around and your home inspector. Oh, most of the time. They say they don't look, but they're looking you know, if it's, if it's something sizable they're going to tell you about or notate it. The pest guy when he goes out there, he's looking at the sheet rock. He has a little flashlight and he's doing a much thorough, much more thorough inspection looking specifically for wood eating organisms.

 

You know, it's scary to say, hey, my house has termites. And it's one of those things where you may have a square foot of this, you know, 1300 square foot house that has a portion of termites there, where it's gotten into a exterior utility calls it right there around the door. So pretty commonplace. In you know, you treat it and the termites are done, it doesn't mean your house is structurally unsound or going to fall down. So I feel like I've run across a lot of buyers that have anxiety about termites. And it's one of those things again, there's just kind of know what you're up against, or what you would expect if if you were to have.

 

Michael:

That's great. I think it's so important, because I know it's so market specific around the kind of nuances around common issues. And for some people, termites is a deal killer, but in the Montgomery Alabama market, it sounds like it maybe isn't such a big deal. And so I always recommend, hey, go quantify the issue, whatever it is, go figure out how much it's gonna cost to fix it, and then figure out if you should be scared and run? Because it sounds like you know, even if there is termites, it's a it's a relatively simple fix.

 

Michael A:

Yeah, I mean, I mean, sometimes it's the better thing that could happen because the termite Gao go out there, it will treat it, he's done most of the expensive things to get rid of the termites, and you can get a bond at a discounted rate. And the bond insures the house for against, you know, any damage caused by termites in the future. And so, you know, it's just this extra form of insurance that sorry, to unpaid for that point.

 

Michael:

That's great.

 

Mark:

So I think you've paid painted a really good picture on, you know, the things to look out for, and thank goodness, we have inspectors that you know, can be the boots on the ground, and, you know, you will go out there and visit the properties, but talk about maybe a little bit of strategy, what are the things that, you know, whenever you speak with a buyer, you wish they had this in mind, before they made the offer, because a lot of the times, you know, a buyer will make an offer on our website, and then we connect you with that buyer.

 

So where are the things that you really wish that you could get that message across, just to help them really strategize a little bit better, or come in and have expectations that are probably going to be met?

 

Michael:

Whew, um, you know, I guess I probably sound like a little bit of a negative Nancy, but it's really just trying to think of all the things that can go wrong. And, and lay those out there. On the front end, that way, the buyer knows what to expect.

 

I think the thing is just have an open mind, you know, if we're meeting the metrics that you're looking to get your returns, and, you know, all of a sudden we discover some problems. What do we need to do to get that solved? And instead of just saying, hey, this deal is, is dead, this is bad. I'd rather go back to that seller and say, Hey, can you fix this up? Can Can you fix this or resolve it? Rather than just saying, Hey, I'm not buying this house is a bad deal. I don't like it, which is fine, acceptable. It's just that if we're really looking to get a certain return, and now we've had an inspection report, and you know, there, there's x y&z wrong, how can we resolve x y&z and still, you know, get the return that we're looking to get.

 

So I've run across a lot of buyers that just after, after we have the inspection report and list out what repairs seem to be necessary. They just said, No, I don't want this house instead of trying to work through and figure out you know, how can we how can we fix this and move forward? And I think there's been several good deals that have been left on the table, just because they just got freaked out by the report. Rather than looking at like, Hey, I got a hurdle. How can I? How can I move it out my way?

 

Mark:

Right. And a lot of buyers are are making offers in markets where there is no room for negotiation, right? It's such a competitive market. And so I think going into a market like Montgomery, and hearing that from you, means, hey, you have negotiating power now. Now you can go back to that seller and possibly talk them down a little bit or get them to repair those items. So I think that's a great point that these things shouldn't freak you out in the inspection, they're there to be addressed. And if you get them, get them repaired, you know, when the repairs were done on those items, and now you have a timestamp, you know, on when those things were repaired? And, you know, hopefully there's gonna be a number of years before it has to happen again.

 

Michael A:

Yeah, I mean, it's one of those things that when you go under contract, that seller is a bit committed to you too, because they're basically saying, Hey, I'm not gonna sell this house to anybody else. And I'm also you. And so, after your inspection, you you present this inspection report to them, there might be repairs on there that they don't even know about. And so, you know, I've seen some people people are very particular that, hey, I'm so sorry, this house had this wrong with it. I didn't know about it, and we're going to fix it. You know that that's not not that's not everybody, but I've seen some people, they were very particular about their house. And if something was wrong with it, they want to know, so that they could fix it.

 

At the very least, if you're staring down the barrel of saying, hey, this needs to be fixed, or I need to walk away from the deal. At least let's go present that to the seller and say, Hey, we got to give them the option to say no, I won't do this. Because more often than not, they'll, they'll say, yeah, I'll fix, you know, half the items or, or all the items or some variants of that. And that at least gives you the option to move forward and continue with an investment that might be a great a great deal. Instead of just saying, hey, these things wrong with it, and I need to get out get away from this deal. I don't like it because there's a you know, $1,000 rotten wood around the facia? Hey, let's let's fix the facial. Let's paint it let's caulk it you know that there's some maintenance issues that should have been resolved, we can present it to the seller, see if they're willing to do it.

 

Michael:

Yeah. Makes tons of sense. Awesome.

 

Mark:

I'm enjoying the wisdom of Michael Adkins. This is a, this is pretty in depth. I love it. Because I agree, you're not being a Debbie Downer, you're just say, hey, this, this is the reality of owning real estate, you're going to run into issues, you're not going to buy the perfect property, even turnkey homes that you just renovated. have things that come up. So I think outlining this in a way you have where it's Hey, this is expected is a great approach.

 

Michael A:

Yeah, I just really believe in real estate. I mean, there's a lot of thought or trying to figure out how can I generate income, just in general. And, you know, real estate is one of the few things where I think you can buy it. And as long as you keep it in reasonably good shape, you could expect to receive an income from it perpetually.

 

You know, some of these other companies will well, Exxon Mobil can go invest in them, they got a pretty good dividend. Will they be around in 50 years? I don't know. You know? So it's just some of those things, look at how can you invest your money in general, beyond real estate and find something that's going to give you a return. And that's one of the things that I think are really attracted to real estate is that you have a little bit of control over it. And you know, people are gonna have to live somewhere, they're not making any more real estate. It's a finite asset. So it's not, it's not gonna disappear as long as you take reasonably good care of it.

 

That, I think that's part of the things that makes me passionate about real estate.

 

Michael:

I think you're in good company there, Michael. Man, that's awesome. Yeah. Any any final questions?

 

Mark:

So Michael, my last question is, why should our buyers be interested in Montgomery? What do you see being there that others don't?

 

Michael A:

Yeah, um, so I mean, I think we're a market known for our cash flow. We do have some really solidly constructed houses, there's a lot of three, two brick branches, they're probably 1214 1600 square feet. We have a lot of jobs here that'll maintain that population and make sure we have a good tenant base to rent those houses long term. And, you know, there's a lot of opportunity going forward with the, with the city.

 

Michael:

Can you share with folks the name of your brokerage and property management company, and then let folks know what the best way to get ahold of us?

 

Michael A:

Yeah, yeah. So my brokerage is Harrison & Atkins Real Estate. And my property management company is BMB property management. And, you know, my preferred method of contact is probably to call me on my cell phone 334-318-0570. Or, if you have a lengthy question, probably probably shoot to my email, Atkins.realtor@gmail.com.

 

Michael:

Fantastic. Well, Michael, thank you so much, again, for taking the time to chat with us today. Really looking forward to seeing how Montgomery continues to grow.

 

Michael A:

Yeah, yeah. Thanks, guys. Y'all have a great day.

 

Mark:

Awesome. Thank you.

 

Michael:

Alrighty, everybody, that was our episode for today. I hope you enjoyed it. I know I got a lot of value out of it. Tons and tons and tons of great wisdom information about the Montgomery market and what investors should be thinking about at they are going to be investing there. If you'd like the episode, please feel free to give us a rating or review whoever it is, is your podcast. If you caught this on YouTube, feel free to subscribe and give us a like, and as always, we would love to hear from you about future episode topics or ideas And things that you want to hear more about. Thanks again for listening. Happy investing.