The State of Alabama presents a unique set of opportunities for house flippers. The cost of living is low and the average home price is considerably lower than the US average. Both of these conditions are favourable for investors hoping to break into the property market.
The only slight drawback is that the after repair value is somewhat limited by the overall market conditions. In other words, while the risks are limited, so are the rewards. Now let’s take a more detailed look at how to flip houses in Alabama.
Alabama House Flipping Stats
Median Purchase Price
Median Resale Price
Price Per Square Foot
Alabama Population Size
Median Household Income
High School Graduation
Travel Time To Work
Best Cities for Flipping Houses In Alabama
Safest Areas in Alabama
- Vestavia Hills – Safety Score: 87.25
- Daphne – Safety Score: 82.16
- Pelham – Safety Score: 82.10
- Alabaster – Safety Score: 81.91
- Madison – Safety Score: 81.86
Please note – All the statistics in this article are based on 2020 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In Alabama
- Find a property in Alabama that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
How To Find Houses To Flip In Alabama
1. Use FlipScout By New Silver
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in Alabama.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in Alabama, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
Alabama Housing Market Analysis
House Flippers Are Concentrating on Mid-Range Houses: The median resale value of house flips in Alabama ($166,850) is actually higher than the median home value ($157,406). This indicates that property investors are generally focusing on the mid-to-upper end of the market where they may be more likely to fetch a high resale value.
Home Values Have Appreciated By 8.5%:According to Zillow, home values in Alabama appreciated by 8.5% over the last year. Moreover, property prices have been steadily increasing since late 2012.
Despite taking a small dip when covid-19 first arrived in the US, the Alabama real estate market has responded well since then. Historically low interest rates have increased demand for homes, while the supply of houses hasn’t increased proportionally. This is a recipe for continued home appreciation, at least in the short term.
Foreclosures Are More Common Than Other States: Another important feature of the Alabama real estate market is the foreclosure rate. Where the national average is 1.2 foreclosures per 10,000 homes, this jumps up to 1.6 foreclosures per 10,000 homes in Alabama. In other words, the Foreclosure rate in Alabama is 33% higher than the national average.
Again, this is actually good news for house flippers. Foreclosures are known to attract property investors, because these houses are often sold below their market value. The reason they are sold below market value is because the primary objective of the bank or lender is to recoup their losses. This means selling the property as quickly as possible, for an acceptable price rather than maximum possible price.
Home Are Generally Very Affordable In Alabama: We have already pointed out that the median home value in Alabama is $157,406. This is significantly cheaper than the US average of $266,222. As a result, Alabama can be an inviting area for first time buyers hoping to take their first step on the property ladder.
The lower cost of homes in Alabama is good news for first time flippers, because it reduces the amount of capital needed for a down payment and the total loan amount needed to purchase the property. In other words, the barrier to entry in Alabama is quite low, and this bodes well for beginners.
Apply For An Investment Property Loan
If you’re ready to start your house flipping journey, New Silver Lending can provide the capital you need to fund your first flip. We offer ultra fast hard money loans with competitive interest rates and quick closing times. The entire application can be completed in less than 10 minutes.
If you’re committed to flipping houses in Alabama, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.
Property Flipping Resources
Hard Money Loan Calculator: Analyze the costs of your next flip in detail with our hard money calculator.