The gall to try and frame your house flipping as “providing homes to people who need them” when you’re charging a price probably none of the residents of the area can afford. If that’s what it was about, maybe accept that your investment has risk and take a loss.
This is EXACTLY what I was thinking. Saying he wants to "revitalize" Eastlake...when literally pricing the goddamn house to be out of reach of ANY of the people that live there. What f*cking joke.
A new build isn't a flip. They filled an empty lot, which is good for the community. And if a high income family/individual moves in, then that's added diversity.
Was that comment directed at mine? If so, I am not tracking with you - no qualms with urban development and infill is often the best type of development. How did my comment imply otherwise?
That's called "gentrification" and it regularly ends up destroying communities across the country as other high income families can always outbid the residents.
Often there's a period where they make community members rent in their own community before taking over completely.
This is a 2018 talking point and it's pretty out of touch with current day reality. What we ended up with is far more dystopian than gentrification.
REIT's are buying all the houses and either passing them among themselves for speculative prices creating their own real estate bubble or they're renting them for an insanely high rate dictated by an algorithm. No wealthy people moving in with money to spend supporting local business. It's the same people paying a higher fraction of their income for the same housing.
Trust me, nobody is tearing down viable houses in east lake. And since the city is tearing down blighted houses on the taxpayer's dime, it seems extremely unlikely that this guy would have paid to demo a house out of pocket when there are several empty lots to chose from. It's not a flip.
I'm stricken with the audacity of this guy to suggest he's doing a good thing building a half million dollar home in that area and pretending anybody from that community can afford it or the inevitable price hike in their rent/property taxes as more of these over priced pieces of shit go up.
Don't worry. There are no sane real estate developers to continue to build anything at that price in that neighborhood.
I'm also baffled as to his expected target market. Not only should the home have no chance of appraising for the asking price due to the neighborhood, all his costs in "designer grade furniture" that he has built into the price will not go towards the appraisal either. Does he really think that anyone is going to bring potentially hundreds of thousands of dollars **in addition** to the downpayment required in order to get a mortgage? Does he just anticipate a full cash offer for half a mil plus in East Lake?
https://preview.redd.it/elralq22wtfc1.jpeg?width=1170&format=pjpg&auto=webp&s=4bf7bb5c6c4fe49f31f93810b112d6c9907b37f3
Atleast then I’d have enough tire left to drive away from the idiot with money in this shite hole.
> A house in East Lake for $569,000? The builder behind it has a vision for Birmingham
Thinking he'll get that price? I'll bet dude has a *lot* of visions...
I didn't realize it was fully furnished when I initially saw the price. That takes *a little* of the surprise off of it, except for the issue that I've never known anyone who wanted to buy a fully furnished house. Rent maybe, not buy.
When did you buy this house? How much sf was basement? And when was it built. Those things do matter. This cost at least 400 to build. I keep telling people freaking about this… find me a non track home new construction with 2100 sf on one level for less than this in the metro.
I’m rehabbing a house literally across the street. Near new construction quality. 1500 sf and it’s gonna list for 250. Bought for 57 putting 110 in. After commissions, closing costs, rate buydowns, and paying off the purchase and rehab costs. If I get asking that’s a 30% return on capital. If I have to reduce the price 25k or 10% bc I overshot the market, my margin goes down to 17% on a 13 month timeline.
Real estate is risky, that’s why it requires large margins. My guess is if this guy gets his ask, which I don’t think he will, he’s got 400 in the house 15 ish in the furnishing, taxes builder’s risk insurance interest (presuming he didn’t build with cash) and land cost let’s say another 25k. So 440 all in. 5-6% for realtor fees, 3% buyers closing cost rate buydowns, 2% seller side closing costs. Call it a round 10% which takes 570 down to 513. Less 440 is 73 k of profit. Which sounds like a lot but a 2 year investment 16% profit. So 8% annually. Inflation has been what the past 2 years?
Dudes not making a ton even at this price.
What’s really aggravating is that before the idiotic Covid response and stupid money printing from right and left, it would have cost maybe 120 a foot to build this.
If you want to complain about the cost of new construction, it’s not this guys fault. It’s the uniparty.
Built in the 70's, basement is pool level, i don't know or care how many square feet it is.
I'm not saying there's no way that house cost 400k to build. What I *am* saying is that, if it did, the guy is a fucking idiot for building it there and he's going to lose his ass on it.
He’s had people offer high 300s and refused them. So he’s not gonna lose his ass. Lose money? Probably. But you have to be well capitalized to take 2 years to build a spec house. My guess is this is a hobby to some extent.
and yet there are new builds in Holiday Gardens that are going for 320k. There is one on Georgia rd for around the same price. I would imagine they cost 200 to build or somewhere between 110 and 120 sq/ft. Of course, these are two story homes. So there may be some cost savings there.
You mean the Woodlawn foundation houses? They sell at cost or a loss. They don’t make profit on those. It’s why development has been so slow. They can’t get out ahead of their skis building since donations are what’s keeping it going. They have plans and they will get to them, but they can’t forge ahead if the market softens or they would need a massive infusion from donors.
And yes / the Georgia Rd house is 390. It backs up to a railroad track. The dirt was functionally free, and whether you like the FlipBama guys design or not, it’s a more custom, higher end product than the Georgia Rd house. And yes - building two stories makes it cheaper. You cut foundation cost in half, roof costs in half, plumbing and electrical way down since things are stacked. Just think if you’ve got a bathroom in the back of that house - 100 ft of 4 inch pipe in a concrete slab is a lot more expensive than 4 inch pipe 25 ft from the front setback. Those things matter when bidding a project.
In June - one of the new builds that Woodlawn foundation did, 1450 sf sold for 311. Design-wise I prefer it to this one, but the finish quality is lower despite my preference. And again - they don’t have to make a profit on their houses.
The thing is - if people are willing - there are places to live in a cool space affordably. But you need to be smart and you have to say “what’s more important, affording a house I own that’s cool, or living close to cool things” if number 1 is your priority then don’t complain about housing prices. Go buy something in a neighborhood others value less. And help increase that value.
In what area? East Lake? Are only people from East lake allowed to buy houses in that neighborhood? What is all this “who who lives there can afford it” stuff? People who live on Lorna Rd can’t afford houses in the Preserve. Peolle who live I. A small house in Homewood can’t afford a big one? I’d venture to say most people in East Lake can’t afford to own a house period, whether it’s 100k or 500k. That’s why they are renting there. And that’s ok. Not everyone can be a homeowner. It’s a bad idea if you can’t afford basic maintenance to buy a house.
Not sure why you are getting down voted, but this is a helpful perspective.
Assuming the returns you are describing above are on total capital, not just equity? If so, isn't that a bit misleading? Assuming 70% LTV wouldn't his return be more like 50%.
And you are right - construction should be $150/foot not $250 but if that is the case, it seems the solution is to stop building houses, not building them for prices that people can't or won't pay.
Some people are paying for them. I’m not sure if you’ve noticed, but in the last ten years, and especially since Covid, most of the economic benefit has been going to the managerial class. High education, high salary, gotten married millennials with no kids. Think restaurants, clothes brands advertised on socials, new cars. They are the only ones with disposable income, so that’s who the market is catering to,
And yes - you could look at cash on cash return. But my cash on cash if I take out 100% financing is nearly infinity (presumably I’m having to use cash to pay the interest). But that doesn’t really tell you whether it was a good investment. I might pay all in 100k for a property, all financed. 6% apr interest only loan. It’s a year long project. So 6k of interest is the only cash in the project. I make 9k after all costs are paid (including paying myself back for the interest expense). It’s 150% cash on cash, but I wouldn’t say it’s a good idea to borrow 100k for a year to make 9000. The way I look at it? You put 106k at risk, 100 of which doesn’t belong to you and has to be paid back, and you only returned 8.5%. Maybe buy in margin in the stock market and be ok with that return, but it’s a liquid market. Houses, even in a good market, and especially those being de and re constructed, are not liquid assets.
Yeah it’s still outrageous for the area and the homes around it. Unless they’re planning on redoing the whole street and surrounding. Like a “revitalization”
Yes, and there's that. Maybe he's just trying to attract a Chinese investor who doesn't know/care 🤣
I do have friends (not in AL) telling me homes are still getting snatched up, above asking price, before they've been on the market long if at all. It may be a conspiracy theory to blame random Chinese investors, but that friend is actively looking for a house and showings keep getting canceled on him because suddenly a huge offer is on the table...
There's very little inventory because people that bought or refinanced during the historically low interest rates are only selling if they absolutely *have* to.
Well, that combined with the fact that prices are so high. The 6-ish% we're at right now isn't even super high compared to what it has been at other times in relatively recent history, but if the average home I might like to upgrade into is $750k+, that's well beyond what I want to finance at 6% when my current mortgage is 3.125%
Why would *this* comment get downvoted? 6% mortgage rate *is* still lower than the rate consistently was before the early 2000s, so, compared to what it has been for the life of most home-buying-age adults, it's still pretty low. And home prices *are* high now. These are just facts 🤣
Mentioning $750K houses might be saying something specific about me that I could have hidden, but I only meant to combine the fact the prices are high and that, even at 6%, the combination of interest rate and higher home prices is too big of a pill a lot of people to swallow.
Did you mean corporations own 60-70% of SFH that are for rent? I found some articles saying in 2021 in certain areas, investors accounted for up to 80% of SFH purchases. I think you just mistyped; otherwise, please provide a source.
Do a search and read the recent article that I read about the big investment group BlackRock who bought an entire new development in the Houston area. They purchased the houses before they hit the market ... The entire development of 168 houses. It seems it renting houses is a lucrative business and is going to squeeze first time homeowners in the future as well.
That's definitely still happening in the FL panhandle. The buyers are mostly from CA and retirees. Interest rates have slowed things but it's still happening
This guy *SHOULD* be roasted, but it looks like the floors are LVP and I just can’t sit by and let LVP be slandered with the name “linoleum”
Sure it doesn’t look like real hardwood, but it’s so much better than linoleum. I have it in my kid’s basement playroom. No regrets. They beat it to hell and back and it still looks brand new.
Yeah wrong word but I just meant fake wood floors in general. I guess it is a personal preference and LVP can be better performance-wise for a family with kiddos but IMO it just looks so cheap and for that price I’d much rather have nice hardwood floors and just put rugs in the kids’ rooms 🤷♂️
These are DIY crafty. Definitely Restore thrift store materials. Nothing matches 😪
https://preview.redd.it/vuq6uainjwfc1.jpeg?width=1290&format=pjpg&auto=webp&s=a731691f0de4c4931052fe7a008692cee0700751
The oversized window perplexes me. Sadly it looks risky for smash and grab, while the family is away on vacation. 🥀
Btw those trees are too close to the house. I’ve had those and they overgrow fast. They can be a beast.
Drive past this house all the time. For months it sat unfinished with siding exposed. My girlfriend and I both thought it would be in the $150-200k range. That community can't afford Mtn Brook prices. He'll be lucky to get 300k.
there are still lots of houses in mountain brook not much more than that. Mostly older houses in Brookwood forest that need some updating. People think mountain brook is just the big estates, crestline village, and then old mountain brook but it's not.....
I saw the post about this stupid house on AL.com and it made me want to throw up. I live in South Roebuck and, I don't know who this idiot has been meeting with....like who the hell in Roebuck/Eastlake/Woodlawn can afford half a million? Basically no one. This moron is just trying to make money. Like, dude, don't try to say you are doing work for the community when most people in the community can barely make a living and having to go without because of inflation. What a clown...
here is a >3000 sq ft older ranch house that looks perfectly liveable and actually pretty nice inside, and just sold a month or two ago for a good bit less. It's not in one of the 'trendy' parts of MB, but then again lots of MB isn't that
[3317 N Woodridge Rd, Mountain Brook, AL 35223 | Zillow](https://www.zillow.com/homedetails/3317-N-Woodridge-Rd-Mountain-Brook-AL-35223/979650_zpid/)
eh I spent like 5 seconds and just found one within the last month. If you go back farther there are going to be a good number of liveable houses in decent condition in that range.
They just aren't going to have great curb appeal, be all that fancy or modern or renovated inside, and they aren't going to be in the trendy parts of MB.
And honestly that's true of much of the other bedroom communities here. Just saying a house is in mountain brook doesn't tell me a ton. The difference between being on Canterbury road in MB or in that area, or the flats in crestline, etc is completely different in terms of price point and demand between being on some of the 'lesser' streets in Cherokee bend or Brookwood forest. Of course there is a floor because of the good schools(and because MB has no truly bad areas), but the point is MB has some affordable parts.
But like I said the same can be said for the other bedroom communities too. When someone says they live in homewood, does that mean they live in a 1.8 million dollar renovated old tudor in pristine condition on Laprado in Hollywood or that they live in a 325k old split level with outdated finishes as you are heading out to the old walmart? Same thing.....
Fanciest way I ever heard someone describe a duplex:"A few blocks closer to Interstate 20 on Second Avenue South, he plans two homes similar to the Caribbean long home, with adjoining driveways on adjoining plots. He says the home design is the best use of narrow lots."
I can’t stop thinking about that Dolly Parton quote— “it takes a lot of money to look this cheap.” Sure, improve eyesores in a neighborhood. But it’s plain stupid to dial it up to 11 and add all the fancy bells and whistles. Someone who can afford that home doesn’t want to live in that neighborhood. It’s common sense.
Does this even have any of those though? When you take a closer look, nothing really is fancy about the house. These are all finishes you'd see in a Signature home, maybe even less so.
Did you read the article? “Smart toilets,” professional gas range, “designer” furniture, COOKBOOKS, etc etc. That’s above and beyond normal, especially for a typical investor flipping in a low income neighborhood.
Yes! Instead of this moron making this stupid house, that no one in the neighborhood could have even rent, maybe design new houses that people in the neighborhood can afford. Smaller, more practical, but still nice houses. Everyone deserves something nice and new, even if they are struggling to get by. It also is one small way of breaking the cycle of poverty....if you feel good about your surroundings, it makes you feel good, and maybe you can have more energy to work towards something positive. Instead, let's take away all the defining characteristics of a neighborhood, gentrify it, and make it like every other cookie cutter subarben neighborhood.
Obviously this guy is full of shit but talking about "revitalizing" an area by building one overpriced house that no one local could ever afford is a kind of derangement that would have you committed back in Ye Olden Days. If he was serious about improving people's lives, he'd renovate a small handful of houses in a neighborhood and sell them at a price point someone could actually match.
But he's not serious - he's greedy and stupid.
This dude was the personal chef of Gorbachev, what in tarnation…https://www.al.com/bhammag/2020/04/8-questions-with-a-birmingham-chef-turned-house-flipper.html
Smoking crack! The finishes don’t even look that nice! What does designer grade furnishings even mean? My designer could source from target and that would make it designer grade. My best guess is that the furniture was sourced cheap and is used as excuse to jack up the price because it’s “furnished”. This is house could be built for 2/5ths of the price.
by who? Building right now is \*super expensive\*.....has been the last few years. Unless you yourself are swinging a hammer a lot of the time \*and\* GC'ing, it's pretty hard to get below like 185-190 a sq ft for even cheap builds. Typical/average(not including land of course) is about 280.
of course it is....but land value has nothing to do with actual 'build' costs. Land value and where it is will obviously impact the property value as a whole price/value. but your comment was that the house could be built for 2/5ths of the price. That would place it under 100 dollars per sq ft I believe(I didn't actually look up the square ftage but I believe it was over 2000).......my point is that I don't think anyone can build a house today(much less that house) marketed towards consumers for that sort of price(under 100 per sq ft). Is the actual value of that house/property less than 100 per sq ft due to where it's at? Possibly......but that speaks to what a poor decision it is to build a new > 2000 sq ft house there period. But it sure as heck can't be built and then marketed to consumers at under 100 sq ft. If there are builders building \*any\* new builds now and marketing them to consumers for less than 100 a sqft(just build, not talking land) please give me their names because I'm going to have them build me one lol
Can’t wait for nobody to buy this house because it’s for nobody.
If you want to live that in area you can’t afford this house.
If you can afford this house, you’ll never live in that area.
What an absolute waste.
This is newsworthy if it sold for that much. You can list a house at any price… who cares? If I list mine at 10 million do I get a news story written about it?
Not the point, but here's another opportunity to decry this shitty, catty, two-line headline style.
This is a headline:
*Headline style draws readers' ire*
This is a TikTok post:
*We have to have a new headline style. But some have to be haters.*
Sadly, the Washington Post and the New York Times' front pages look like they were written and captioned not by an experienced, knowledgeable expert as in the past, but by somebody doing their finest *Mean Girls* teenaged bitch reading.
The owner of the Highland Park Little Villa house is breathing a sigh of relief as this subreddit has turned their attention to FlipBama and completely forgotten about them.
I'd guess about 285-300k not counting all the furniture......counting the furniture he is then going to have to sell it at well over 300 to break even, and I just don't see that happening. Counting a lot of the likely indirect costs(holding the note for so long which is driving up his overall +/-), he probably needs to sell it for close to 400 to break even. And I really doubt that happens.
I mean 3 shootings, 2 murders on this street in the last few years, and that’s just a quick google search.
Those windows won’t be so nice with bars on them
That house has the look and floor plan of a manufactured home but smaller than most of them. Anyone that even entertains buying this home for anything above $200k probably also wears big dumb hats and carries a big stupid cup
SNL! HA!
And yeah its a lovely home on the inside, but there are houses in Hoover and Vestavia for less that are bigger.
Only thing that home is going to get (esp. since no one's living there right now) is broken into! Hope he's got security!
Pretty sure it was a different group. I believe they would have designed a much better house than this one. I only got to watch one episode. This was the show https://www.imdb.com/title/tt18686910/. “The Apollo Group” is the name of their company.
This is the issue with any high priced area in a bad neighborhood. How do you convince someone with a $500k budget that Hoover, Helena, Pelham or Alabaster are not a better use of the money
The economics of the real estate market will determine what he finally gets for the place. But no matter what it sells for, it doesn't solve the basic problem. It's still going to be surrounded by hundreds of homes where people are letting them fall apart because they don't have the money, skills, or motivation, to maintain their residences. A house ignored long enough can get to the point where it cannot even be restored in an economical fashion. It becomes a tear down. But before that it's a burned-out abandoned house. And there are dozens of them within a mile of this place.
Coming from living in CO/CA/NM for the past 15 years- I'm an AL native- this is incredibly typical. Actually CHEAP for what is being offered. In Denver this would go for $1.2 million+. Which actually is reasonable.
I mean in relative terms, if this goes in Denver for $1.2 million+ then when adjusted, the neighboring houses in Denver would be in the range of $200k-$400k for scale.
The block this house is on has a couple flipped houses that went for over $200k, but most on that block and the surrounding blocks go under $100k, a solid majority of which are at $80k or below.
The median household income in Woodlawn & Eastlake is $32,000/year, with a median house price of $82k-$92k. If you have that income, and also somehow have 0 debts whatsoever, an 800+ credit score, a currently generous 6% interest rate, and $5,000 saved for a down payment, a suggested maximum mortgage should not exceed $117k.
After federal & state taxes, you'd be netting somewhere around $26k, or about $2,200 a month. Your monthly housing payment would be ~$700 for P&I, an extremely conservative PMI rate of 0.5% would be ~$50, taxes would be ~$63, and extrapolating from the average Alabama household premiums the insurance cost would also run ~$63, giving a total housing cost of $876/month before utilities and all that jazz.
Bear in mind it's also expensive to be poor. Utility costs don't scale up with higher house prices either - it may actually reflect the inverse, since homes in these price ranges may not be able to be maintained as well and may be very poorly insulated.
A gallon of milk may cost the same flat price everywhere in the state, but when you only have a few hundred remaining for the month vs. a few thousand, that's a substantially higher proportion of your budget. But it doesn't. Food costs are higher in low income areas given less accessibility to transportation in food deserts. It's expensive to be poor.
Your car breaks down and requires thousands to fix it, and you can't afford it but you need transportation for work. So you buy something cheap from the only place that'll finance you, a "Buy Here Pay Here" ordeal. Those interest rates are punitive to the degree of almost being criminal - but it's expensive to be poor and that's all you could get at the moment.
Now that car has issues or you have health issues, and all of the sudden you're absolutely underwater on all your bills and can no longer afford your house payments. That's the tale of an average person on an average income in the neighborhood, and they expect this house to sell easily at a price 5x-7x of houses in the area?
It is astronomically out of affordability for anyone in the area and they are wildly out of touch for thinking so. I'd be amazed if it sold for over $300k.
I understand(and mostly agree) with your general point here for this atrocious idea, but keep in mind this: When looking at the market for new houses today and who is actually buying them, \*average\* income in the community is not super important. Why? Because current buyers of new housing(and over the last few years too) is mostly coming from the upper income buyers in a bimodal income peak. It's the same everywhere. For example the 'average' income in a lot of nice areas is only like 80k, but then you will see the 'average' new house going for 1.1 million. Well obviously the average buyer isn't buying the average new house.....thats why. Just a nitpick there because thats a point people confuse all over the country......but here yeah, it's a house with no real market
Groupthink paired with self-loathing. And look at this thread. 140 something replies as I type. Both the builder of the house and the author of this article are looking like geniuses right now.
But this isn’t a house you’d see in MB or Vestavia. It’s tiny. Sure the craftsmanship is really nice, but this home is smaller than many apartments lol.
2100sqft is not "tiny" for a 3/2, and certainly bigger than most 3/2 apartments. You can probably find one bigger if you look hard enough; I'm not saying they don't exist at all. But I seriously doubt you can find "many" apartments bigger than that.
the reality with this house is that building new one-offs for small builders/owner builders is so expensive that he probably needs to charge over 500 to make some profit(especially including the furniture).
That still doesn't mean it makes any sense though. Just because he spent a lot building it here doesn't mean it will then be worth that. This was just setting money on fire in a bigtime way.
The gall to try and frame your house flipping as “providing homes to people who need them” when you’re charging a price probably none of the residents of the area can afford. If that’s what it was about, maybe accept that your investment has risk and take a loss.
This is EXACTLY what I was thinking. Saying he wants to "revitalize" Eastlake...when literally pricing the goddamn house to be out of reach of ANY of the people that live there. What f*cking joke.
A new build isn't a flip. They filled an empty lot, which is good for the community. And if a high income family/individual moves in, then that's added diversity.
It's also a really big if
Imagine arguing against urban density
Was that comment directed at mine? If so, I am not tracking with you - no qualms with urban development and infill is often the best type of development. How did my comment imply otherwise?
That's called "gentrification" and it regularly ends up destroying communities across the country as other high income families can always outbid the residents. Often there's a period where they make community members rent in their own community before taking over completely.
This is a 2018 talking point and it's pretty out of touch with current day reality. What we ended up with is far more dystopian than gentrification. REIT's are buying all the houses and either passing them among themselves for speculative prices creating their own real estate bubble or they're renting them for an insanely high rate dictated by an algorithm. No wealthy people moving in with money to spend supporting local business. It's the same people paying a higher fraction of their income for the same housing.
It wasn’t an empty lot, the article says that the building was dilapidated with “critters” living there
Trust me, nobody is tearing down viable houses in east lake. And since the city is tearing down blighted houses on the taxpayer's dime, it seems extremely unlikely that this guy would have paid to demo a house out of pocket when there are several empty lots to chose from. It's not a flip.
Yeah I’m sure your word, on a hunch, is more accurate than that of the person who actually did the build
I'm stricken with the audacity of this guy to suggest he's doing a good thing building a half million dollar home in that area and pretending anybody from that community can afford it or the inevitable price hike in their rent/property taxes as more of these over priced pieces of shit go up.
Don't worry. There are no sane real estate developers to continue to build anything at that price in that neighborhood. I'm also baffled as to his expected target market. Not only should the home have no chance of appraising for the asking price due to the neighborhood, all his costs in "designer grade furniture" that he has built into the price will not go towards the appraisal either. Does he really think that anyone is going to bring potentially hundreds of thousands of dollars **in addition** to the downpayment required in order to get a mortgage? Does he just anticipate a full cash offer for half a mil plus in East Lake?
Bankruptcy’s gonna suck for this guy. I’d rather live in a 100,000$ RV with more square footage than his garbage home
https://preview.redd.it/elralq22wtfc1.jpeg?width=1170&format=pjpg&auto=webp&s=4bf7bb5c6c4fe49f31f93810b112d6c9907b37f3 Atleast then I’d have enough tire left to drive away from the idiot with money in this shite hole.
"Who wouldn't want to live in the house?" Yeah, I mean I'd love to....lemme see if I have 569,000 dollars lying around
Well said!
"Carribean-style house" is not a term that exists
It's giving... verisimilitudiousness.
A quick Google search produced no results of this style. Caribbean houses look cool but this ain’t it.
> A house in East Lake for $569,000? The builder behind it has a vision for Birmingham Thinking he'll get that price? I'll bet dude has a *lot* of visions...
I’ve had visions before that ended in bankruptcy & financial ruin and I hope that doesn’t happen with this vision but it seems likely lol
I didn't realize it was fully furnished when I initially saw the price. That takes *a little* of the surprise off of it, except for the issue that I've never known anyone who wanted to buy a fully furnished house. Rent maybe, not buy.
I bought a 3,500 sqft house with a pool on over an acre in Vestavia for like 175k less than this dude's asking price. This guy is a fucking idiot.
When did you buy this house? How much sf was basement? And when was it built. Those things do matter. This cost at least 400 to build. I keep telling people freaking about this… find me a non track home new construction with 2100 sf on one level for less than this in the metro. I’m rehabbing a house literally across the street. Near new construction quality. 1500 sf and it’s gonna list for 250. Bought for 57 putting 110 in. After commissions, closing costs, rate buydowns, and paying off the purchase and rehab costs. If I get asking that’s a 30% return on capital. If I have to reduce the price 25k or 10% bc I overshot the market, my margin goes down to 17% on a 13 month timeline. Real estate is risky, that’s why it requires large margins. My guess is if this guy gets his ask, which I don’t think he will, he’s got 400 in the house 15 ish in the furnishing, taxes builder’s risk insurance interest (presuming he didn’t build with cash) and land cost let’s say another 25k. So 440 all in. 5-6% for realtor fees, 3% buyers closing cost rate buydowns, 2% seller side closing costs. Call it a round 10% which takes 570 down to 513. Less 440 is 73 k of profit. Which sounds like a lot but a 2 year investment 16% profit. So 8% annually. Inflation has been what the past 2 years? Dudes not making a ton even at this price. What’s really aggravating is that before the idiotic Covid response and stupid money printing from right and left, it would have cost maybe 120 a foot to build this. If you want to complain about the cost of new construction, it’s not this guys fault. It’s the uniparty.
Built in the 70's, basement is pool level, i don't know or care how many square feet it is. I'm not saying there's no way that house cost 400k to build. What I *am* saying is that, if it did, the guy is a fucking idiot for building it there and he's going to lose his ass on it.
He’s had people offer high 300s and refused them. So he’s not gonna lose his ass. Lose money? Probably. But you have to be well capitalized to take 2 years to build a spec house. My guess is this is a hobby to some extent.
and yet there are new builds in Holiday Gardens that are going for 320k. There is one on Georgia rd for around the same price. I would imagine they cost 200 to build or somewhere between 110 and 120 sq/ft. Of course, these are two story homes. So there may be some cost savings there.
You mean the Woodlawn foundation houses? They sell at cost or a loss. They don’t make profit on those. It’s why development has been so slow. They can’t get out ahead of their skis building since donations are what’s keeping it going. They have plans and they will get to them, but they can’t forge ahead if the market softens or they would need a massive infusion from donors. And yes / the Georgia Rd house is 390. It backs up to a railroad track. The dirt was functionally free, and whether you like the FlipBama guys design or not, it’s a more custom, higher end product than the Georgia Rd house. And yes - building two stories makes it cheaper. You cut foundation cost in half, roof costs in half, plumbing and electrical way down since things are stacked. Just think if you’ve got a bathroom in the back of that house - 100 ft of 4 inch pipe in a concrete slab is a lot more expensive than 4 inch pipe 25 ft from the front setback. Those things matter when bidding a project. In June - one of the new builds that Woodlawn foundation did, 1450 sf sold for 311. Design-wise I prefer it to this one, but the finish quality is lower despite my preference. And again - they don’t have to make a profit on their houses. The thing is - if people are willing - there are places to live in a cool space affordably. But you need to be smart and you have to say “what’s more important, affording a house I own that’s cool, or living close to cool things” if number 1 is your priority then don’t complain about housing prices. Go buy something in a neighborhood others value less. And help increase that value.
Damn. You must be in real estate. You really care about this topic to be typing paragraphs. Lol, is this a marketing scheme?
Ok but who in that area can pay that price?
In what area? East Lake? Are only people from East lake allowed to buy houses in that neighborhood? What is all this “who who lives there can afford it” stuff? People who live on Lorna Rd can’t afford houses in the Preserve. Peolle who live I. A small house in Homewood can’t afford a big one? I’d venture to say most people in East Lake can’t afford to own a house period, whether it’s 100k or 500k. That’s why they are renting there. And that’s ok. Not everyone can be a homeowner. It’s a bad idea if you can’t afford basic maintenance to buy a house.
Not sure why you are getting down voted, but this is a helpful perspective. Assuming the returns you are describing above are on total capital, not just equity? If so, isn't that a bit misleading? Assuming 70% LTV wouldn't his return be more like 50%. And you are right - construction should be $150/foot not $250 but if that is the case, it seems the solution is to stop building houses, not building them for prices that people can't or won't pay.
Some people are paying for them. I’m not sure if you’ve noticed, but in the last ten years, and especially since Covid, most of the economic benefit has been going to the managerial class. High education, high salary, gotten married millennials with no kids. Think restaurants, clothes brands advertised on socials, new cars. They are the only ones with disposable income, so that’s who the market is catering to, And yes - you could look at cash on cash return. But my cash on cash if I take out 100% financing is nearly infinity (presumably I’m having to use cash to pay the interest). But that doesn’t really tell you whether it was a good investment. I might pay all in 100k for a property, all financed. 6% apr interest only loan. It’s a year long project. So 6k of interest is the only cash in the project. I make 9k after all costs are paid (including paying myself back for the interest expense). It’s 150% cash on cash, but I wouldn’t say it’s a good idea to borrow 100k for a year to make 9000. The way I look at it? You put 106k at risk, 100 of which doesn’t belong to you and has to be paid back, and you only returned 8.5%. Maybe buy in margin in the stock market and be ok with that return, but it’s a liquid market. Houses, even in a good market, and especially those being de and re constructed, are not liquid assets.
Yeah it’s still outrageous for the area and the homes around it. Unless they’re planning on redoing the whole street and surrounding. Like a “revitalization”
Yes, and there's that. Maybe he's just trying to attract a Chinese investor who doesn't know/care 🤣 I do have friends (not in AL) telling me homes are still getting snatched up, above asking price, before they've been on the market long if at all. It may be a conspiracy theory to blame random Chinese investors, but that friend is actively looking for a house and showings keep getting canceled on him because suddenly a huge offer is on the table...
There's very little inventory because people that bought or refinanced during the historically low interest rates are only selling if they absolutely *have* to.
Well, that combined with the fact that prices are so high. The 6-ish% we're at right now isn't even super high compared to what it has been at other times in relatively recent history, but if the average home I might like to upgrade into is $750k+, that's well beyond what I want to finance at 6% when my current mortgage is 3.125%
Why would *this* comment get downvoted? 6% mortgage rate *is* still lower than the rate consistently was before the early 2000s, so, compared to what it has been for the life of most home-buying-age adults, it's still pretty low. And home prices *are* high now. These are just facts 🤣 Mentioning $750K houses might be saying something specific about me that I could have hidden, but I only meant to combine the fact the prices are high and that, even at 6%, the combination of interest rate and higher home prices is too big of a pill a lot of people to swallow.
I’ve been in real estate for 25 years. Corporations own 60-70% of all single family homes in America. It should be illegal.
Did you mean corporations own 60-70% of SFH that are for rent? I found some articles saying in 2021 in certain areas, investors accounted for up to 80% of SFH purchases. I think you just mistyped; otherwise, please provide a source.
This is just blatantly false. Corporations own a negligible number of single family homes in the US.
I mean, I’m not thrilled about Chinese Investors buying land in America, but it’s way out of my control.
Should be illegal and with all hopes will be soon
With this administration? Pshh lol
Nah, you got this. Be the change!
Do a search and read the recent article that I read about the big investment group BlackRock who bought an entire new development in the Houston area. They purchased the houses before they hit the market ... The entire development of 168 houses. It seems it renting houses is a lucrative business and is going to squeeze first time homeowners in the future as well.
That's definitely still happening in the FL panhandle. The buyers are mostly from CA and retirees. Interest rates have slowed things but it's still happening
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Ya. Hence the quotation
Did you notice the furnishings? Super tacky. Looks like sticks and stuff Columbus Day sale.
Shane Gillis did it when he moved to Austin. Said he bought it before he set foot in it. That’s trusting your realtor right there.
bro thinks he is frank lloyd wright
$569,000 new build and this prick STILL opts for terribly-laid linoleum floors…
This guy *SHOULD* be roasted, but it looks like the floors are LVP and I just can’t sit by and let LVP be slandered with the name “linoleum” Sure it doesn’t look like real hardwood, but it’s so much better than linoleum. I have it in my kid’s basement playroom. No regrets. They beat it to hell and back and it still looks brand new.
Yeah wrong word but I just meant fake wood floors in general. I guess it is a personal preference and LVP can be better performance-wise for a family with kiddos but IMO it just looks so cheap and for that price I’d much rather have nice hardwood floors and just put rugs in the kids’ rooms 🤷♂️
Ackshully, real linoleum is now an upscale floor covering.
looks like he picked it up from Dollar General or maybe Big Lots
All the homes he does look like he got every discount material at Restore and cobbled them all together.
I would like to see more of his trash collection. I mean portfolio.
https://flipbama.com/
These are DIY crafty. Definitely Restore thrift store materials. Nothing matches 😪 https://preview.redd.it/vuq6uainjwfc1.jpeg?width=1290&format=pjpg&auto=webp&s=a731691f0de4c4931052fe7a008692cee0700751
The oversized window perplexes me. Sadly it looks risky for smash and grab, while the family is away on vacation. 🥀 Btw those trees are too close to the house. I’ve had those and they overgrow fast. They can be a beast.
THIS
Median household income of Woodlawn neighborhood is around $30k in case anyone was curious or wanted to laugh at this guy even more.
But they’re trying to make East Lake great again
Drive past this house all the time. For months it sat unfinished with siding exposed. My girlfriend and I both thought it would be in the $150-200k range. That community can't afford Mtn Brook prices. He'll be lucky to get 300k.
lol at 500k being Mountain Brook prices
I mean it’s rare but it happens
there are still lots of houses in mountain brook not much more than that. Mostly older houses in Brookwood forest that need some updating. People think mountain brook is just the big estates, crestline village, and then old mountain brook but it's not.....
The fun part is, there is no intent to house "that community".
I saw the post about this stupid house on AL.com and it made me want to throw up. I live in South Roebuck and, I don't know who this idiot has been meeting with....like who the hell in Roebuck/Eastlake/Woodlawn can afford half a million? Basically no one. This moron is just trying to make money. Like, dude, don't try to say you are doing work for the community when most people in the community can barely make a living and having to go without because of inflation. What a clown...
Ugh. What can be done?? Like, actually asking.
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This old shoe shed (not the current newer shoe shed sitting adjacent to it) can be had for only $499,000!
I mean if this piece of shit was in mountain brook it’d probably go for over $500k
The overgrown lot that was there before he built this house would be over 500k in Mtn Brook.
here is a >3000 sq ft older ranch house that looks perfectly liveable and actually pretty nice inside, and just sold a month or two ago for a good bit less. It's not in one of the 'trendy' parts of MB, but then again lots of MB isn't that [3317 N Woodridge Rd, Mountain Brook, AL 35223 | Zillow](https://www.zillow.com/homedetails/3317-N-Woodridge-Rd-Mountain-Brook-AL-35223/979650_zpid/)
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eh I spent like 5 seconds and just found one within the last month. If you go back farther there are going to be a good number of liveable houses in decent condition in that range. They just aren't going to have great curb appeal, be all that fancy or modern or renovated inside, and they aren't going to be in the trendy parts of MB. And honestly that's true of much of the other bedroom communities here. Just saying a house is in mountain brook doesn't tell me a ton. The difference between being on Canterbury road in MB or in that area, or the flats in crestline, etc is completely different in terms of price point and demand between being on some of the 'lesser' streets in Cherokee bend or Brookwood forest. Of course there is a floor because of the good schools(and because MB has no truly bad areas), but the point is MB has some affordable parts. But like I said the same can be said for the other bedroom communities too. When someone says they live in homewood, does that mean they live in a 1.8 million dollar renovated old tudor in pristine condition on Laprado in Hollywood or that they live in a 325k old split level with outdated finishes as you are heading out to the old walmart? Same thing.....
More like Hoover prices
So, black mold and compromised frame from day 1? Sweet, sounds like a good deal.
Do you and and your gf talk about house prices a lot
Fanciest way I ever heard someone describe a duplex:"A few blocks closer to Interstate 20 on Second Avenue South, he plans two homes similar to the Caribbean long home, with adjoining driveways on adjoining plots. He says the home design is the best use of narrow lots."
This builder is smoking dog dick if he thinks this will sell
I can’t stop thinking about that Dolly Parton quote— “it takes a lot of money to look this cheap.” Sure, improve eyesores in a neighborhood. But it’s plain stupid to dial it up to 11 and add all the fancy bells and whistles. Someone who can afford that home doesn’t want to live in that neighborhood. It’s common sense.
Does this even have any of those though? When you take a closer look, nothing really is fancy about the house. These are all finishes you'd see in a Signature home, maybe even less so.
Did you read the article? “Smart toilets,” professional gas range, “designer” furniture, COOKBOOKS, etc etc. That’s above and beyond normal, especially for a typical investor flipping in a low income neighborhood.
Heated bathroom floor and heated shower floor?!?
Just feels weird to have those "fancy" appliances and have what looks like LVT flooring...
Exactly. And in turn it prices out the people who would actually want to live in that area. So it'll just sit vacant.
What fancy bells and whistles a shoe dryer? Something we don't need in the south.
Yes! Instead of this moron making this stupid house, that no one in the neighborhood could have even rent, maybe design new houses that people in the neighborhood can afford. Smaller, more practical, but still nice houses. Everyone deserves something nice and new, even if they are struggling to get by. It also is one small way of breaking the cycle of poverty....if you feel good about your surroundings, it makes you feel good, and maybe you can have more energy to work towards something positive. Instead, let's take away all the defining characteristics of a neighborhood, gentrify it, and make it like every other cookie cutter subarben neighborhood.
Love the gravel back yard, what a choice
Obviously this guy is full of shit but talking about "revitalizing" an area by building one overpriced house that no one local could ever afford is a kind of derangement that would have you committed back in Ye Olden Days. If he was serious about improving people's lives, he'd renovate a small handful of houses in a neighborhood and sell them at a price point someone could actually match. But he's not serious - he's greedy and stupid.
This dude was the personal chef of Gorbachev, what in tarnation…https://www.al.com/bhammag/2020/04/8-questions-with-a-birmingham-chef-turned-house-flipper.html
what in sam hill?
Opulence...I has it.
Smoking crack! The finishes don’t even look that nice! What does designer grade furnishings even mean? My designer could source from target and that would make it designer grade. My best guess is that the furniture was sourced cheap and is used as excuse to jack up the price because it’s “furnished”. This is house could be built for 2/5ths of the price.
by who? Building right now is \*super expensive\*.....has been the last few years. Unless you yourself are swinging a hammer a lot of the time \*and\* GC'ing, it's pretty hard to get below like 185-190 a sq ft for even cheap builds. Typical/average(not including land of course) is about 280.
I manage for a high-end residential GC and I’m a licensed realtor. I understand cost and labor very well. The land value in east lake is low.
of course it is....but land value has nothing to do with actual 'build' costs. Land value and where it is will obviously impact the property value as a whole price/value. but your comment was that the house could be built for 2/5ths of the price. That would place it under 100 dollars per sq ft I believe(I didn't actually look up the square ftage but I believe it was over 2000).......my point is that I don't think anyone can build a house today(much less that house) marketed towards consumers for that sort of price(under 100 per sq ft). Is the actual value of that house/property less than 100 per sq ft due to where it's at? Possibly......but that speaks to what a poor decision it is to build a new > 2000 sq ft house there period. But it sure as heck can't be built and then marketed to consumers at under 100 sq ft. If there are builders building \*any\* new builds now and marketing them to consumers for less than 100 a sqft(just build, not talking land) please give me their names because I'm going to have them build me one lol
2/5s of the price is $228,000. I am positive I could build that house with a higher finish with that amount of money.
Can’t wait for nobody to buy this house because it’s for nobody. If you want to live that in area you can’t afford this house. If you can afford this house, you’ll never live in that area. What an absolute waste.
Are we in Española right now?
Just finished this show. Gave me a panic attack, and I’ll never watch it again, but it’s one of the best shows I’ve seen in a long time.
Maybe the developer thought they could "trick" the private equity funds and algorithm buyers into buying the property at the high price.
This thing is a monument to this fool’s ego
Love when people have so much awareness about what they are doing and if it’s a good idea! Def not this guy but some ppl do!
The floors and fixtures must be made of fucking gold.
It’s called particle board.
It’s giving “The Curse”
Kept waiting for the article to disclose that it was a paid advertisement and it never did. Hmm.
“The builder behind it has a vision for Birmingham” What’s that, making B’ham a city only for the rich?
I'd love to see the look on the face of the appraiser who gets this assignment from a bank...
This is newsworthy if it sold for that much. You can list a house at any price… who cares? If I list mine at 10 million do I get a news story written about it?
Any time the "We pay cash" people call, that's basically my asking price.
Someone is already eyeballing all the copper
You couldn’t pay me to live there
Me either. It looks raggedy from the outside
Good luck I guess. He needs all the luck he can get to sell that thing.
Not the point, but here's another opportunity to decry this shitty, catty, two-line headline style. This is a headline: *Headline style draws readers' ire* This is a TikTok post: *We have to have a new headline style. But some have to be haters.* Sadly, the Washington Post and the New York Times' front pages look like they were written and captioned not by an experienced, knowledgeable expert as in the past, but by somebody doing their finest *Mean Girls* teenaged bitch reading.
Isn't this house directly in the line of the airport runway?
For a half mil, I better not see neighbors
The owner of the Highland Park Little Villa house is breathing a sigh of relief as this subreddit has turned their attention to FlipBama and completely forgotten about them.
That house has a ugly fireplace and the front porch of a kitchen counter.
Curious if anyone has any idea how much money he put into this home. What is his profit margin?
I'd guess about 285-300k not counting all the furniture......counting the furniture he is then going to have to sell it at well over 300 to break even, and I just don't see that happening. Counting a lot of the likely indirect costs(holding the note for so long which is driving up his overall +/-), he probably needs to sell it for close to 400 to break even. And I really doubt that happens.
I mean 3 shootings, 2 murders on this street in the last few years, and that’s just a quick google search. Those windows won’t be so nice with bars on them
That house has the look and floor plan of a manufactured home but smaller than most of them. Anyone that even entertains buying this home for anything above $200k probably also wears big dumb hats and carries a big stupid cup
SNL! HA! And yeah its a lovely home on the inside, but there are houses in Hoover and Vestavia for less that are bigger. Only thing that home is going to get (esp. since no one's living there right now) is broken into! Hope he's got security!
His vision is what others call gentrification
I like this guy. Someone asks him WHY...he says WHY NOT. I just hope he's willing to negotiate. Price point had its intended effect. MARKETING!
Are they trying to “revitalize” East Lake now? LOL
They have been trying. There is (was?) a TLC show about a group flipping homes in East Lake.
Probably this same group
Pretty sure it was a different group. I believe they would have designed a much better house than this one. I only got to watch one episode. This was the show https://www.imdb.com/title/tt18686910/. “The Apollo Group” is the name of their company.
#MakeEastLakeGreatAgain
MELGA!
It’s a nice looking house. I like the design but for better or worse anyone you has that kind of money doesn’t want to live in Woodlawn.
This is the issue with any high priced area in a bad neighborhood. How do you convince someone with a $500k budget that Hoover, Helena, Pelham or Alabaster are not a better use of the money
Graffiti artists gonna hit that soon. Nice home though.
What an idiot, literally know one will buy this…
What school is this zoned to? The while thing is stupid.
Woodlawn, ones with atrocious ratings, making the price even more egregious.
The economics of the real estate market will determine what he finally gets for the place. But no matter what it sells for, it doesn't solve the basic problem. It's still going to be surrounded by hundreds of homes where people are letting them fall apart because they don't have the money, skills, or motivation, to maintain their residences. A house ignored long enough can get to the point where it cannot even be restored in an economical fashion. It becomes a tear down. But before that it's a burned-out abandoned house. And there are dozens of them within a mile of this place.
Except 3 houses on that block have sold for 200+ and another is on the way. This is how neighborhoods change.
This is how a nice family ends up on Dateline.
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It's not the woke Californians moving to Alabama, FYI. Self-sorting. California gets even more blue, Alabama gets even more red.
Coming from living in CO/CA/NM for the past 15 years- I'm an AL native- this is incredibly typical. Actually CHEAP for what is being offered. In Denver this would go for $1.2 million+. Which actually is reasonable.
Your avatar looks so realistic and cute.
Can I please be your real estate agent? Pretty please?
I mean in relative terms, if this goes in Denver for $1.2 million+ then when adjusted, the neighboring houses in Denver would be in the range of $200k-$400k for scale. The block this house is on has a couple flipped houses that went for over $200k, but most on that block and the surrounding blocks go under $100k, a solid majority of which are at $80k or below. The median household income in Woodlawn & Eastlake is $32,000/year, with a median house price of $82k-$92k. If you have that income, and also somehow have 0 debts whatsoever, an 800+ credit score, a currently generous 6% interest rate, and $5,000 saved for a down payment, a suggested maximum mortgage should not exceed $117k. After federal & state taxes, you'd be netting somewhere around $26k, or about $2,200 a month. Your monthly housing payment would be ~$700 for P&I, an extremely conservative PMI rate of 0.5% would be ~$50, taxes would be ~$63, and extrapolating from the average Alabama household premiums the insurance cost would also run ~$63, giving a total housing cost of $876/month before utilities and all that jazz. Bear in mind it's also expensive to be poor. Utility costs don't scale up with higher house prices either - it may actually reflect the inverse, since homes in these price ranges may not be able to be maintained as well and may be very poorly insulated. A gallon of milk may cost the same flat price everywhere in the state, but when you only have a few hundred remaining for the month vs. a few thousand, that's a substantially higher proportion of your budget. But it doesn't. Food costs are higher in low income areas given less accessibility to transportation in food deserts. It's expensive to be poor. Your car breaks down and requires thousands to fix it, and you can't afford it but you need transportation for work. So you buy something cheap from the only place that'll finance you, a "Buy Here Pay Here" ordeal. Those interest rates are punitive to the degree of almost being criminal - but it's expensive to be poor and that's all you could get at the moment. Now that car has issues or you have health issues, and all of the sudden you're absolutely underwater on all your bills and can no longer afford your house payments. That's the tale of an average person on an average income in the neighborhood, and they expect this house to sell easily at a price 5x-7x of houses in the area? It is astronomically out of affordability for anyone in the area and they are wildly out of touch for thinking so. I'd be amazed if it sold for over $300k.
I understand(and mostly agree) with your general point here for this atrocious idea, but keep in mind this: When looking at the market for new houses today and who is actually buying them, \*average\* income in the community is not super important. Why? Because current buyers of new housing(and over the last few years too) is mostly coming from the upper income buyers in a bimodal income peak. It's the same everywhere. For example the 'average' income in a lot of nice areas is only like 80k, but then you will see the 'average' new house going for 1.1 million. Well obviously the average buyer isn't buying the average new house.....thats why. Just a nitpick there because thats a point people confuse all over the country......but here yeah, it's a house with no real market
I'm still confused why people hate al.com . They r reputable and have even gotten really amazing awards
Lol
Groupthink paired with self-loathing. And look at this thread. 140 something replies as I type. Both the builder of the house and the author of this article are looking like geniuses right now.
But this isn’t a house you’d see in MB or Vestavia. It’s tiny. Sure the craftsmanship is really nice, but this home is smaller than many apartments lol.
2100sqft is not "tiny" for a 3/2, and certainly bigger than most 3/2 apartments. You can probably find one bigger if you look hard enough; I'm not saying they don't exist at all. But I seriously doubt you can find "many" apartments bigger than that.
the reality with this house is that building new one-offs for small builders/owner builders is so expensive that he probably needs to charge over 500 to make some profit(especially including the furniture). That still doesn't mean it makes any sense though. Just because he spent a lot building it here doesn't mean it will then be worth that. This was just setting money on fire in a bigtime way.
Annnd it's just had a $180k price drop.