Investing in Centerpoint, Alabama

Rob Drum · Posted on

Many people are interested in investing in Centerpoint, Alabama. For good reason. Stable homes and a stable tenant base make it extremely attractive for rental property investors.

Because this area is soo attractive for investment, I decided to do a deep dive into this market niche. I tore through piles of data, and found some interesting facts to share with y’all.

Two main data sets were used. Property tax data from June 2015 to June 2018, and MLS data from the same time period. The property tax records showed 3180 total transactions.

I organized my research around these questions:

  • Who’s buying?
  • What state do the owners live in?
  • Who’s selling?
  • What does the average house look like?
  • How does tax roll data compare to MLS Data?
Who’s buying?

The top buyers for this time period were all large funds. Single family rentals are quickly becoming a popular asset class for Wall Street. Since the 2008 crash, multiple wall street firms have entered the market. Homes in Centerpoint fit the economic model most of these firms use, so they’ve been buying in bulk.

Here are the top five funds:

  1. Main Street Renewal (Amhearst)
  2. Ovation Properties LLC
  3. Reven Housing Alabama
  4. Conrex
  5. Spartan Invest LLC
What state do the owners live in?

I was surprised to find 46 states represented in the ownership records. With such broad interest, I was curious what states were most represented.

Here are the top 5 states for owners:

  1. AL 61.9%
  2. TX 8.7%
  3. SC 7%
  4. CA 5.8%
  5. FL 2.6%
Who’s selling?

This data can be misleading because investors often transfer ownership between LLC’s they own. Regardless, this is another measure of what firms are most active in this market.

The top 5 firms listed as seller in tax records:

  1. Sayco Equity Fund
  2. Spartan Invest LLC
  3. Main Street Street Renewal (Amherst)
  4. Conrex
  5. Rising Tide Homes
What does the average house look like?
  • Year built = 1967
  • Beds = 3
  • Baths = 1.5
  • Lot size = .39 acres
  • Square feet = 1358
  • Fireplace in 45% of homes
  • The average (normal) transaction price was 59,796 over the 3 year period
How does this compare to MLS Data?

When I compared tax roll data to MLS data there were some interesting differences

  • 1526 transactions over the same time period
    • There were about half as many transactions represented. MLS data doesn’t include foreclosure auctions, or off market sales.
  • 2377 Homes listed, which means 64.2% of homes listed sold
    • This compares to 68.6% for our MLS as a whole.
  • Average price was $80,484 over the same 3 year period.
    • This is about $20,000 higher than tax roll data for sales in the same period.
    • I would assume that this is because MLS doesn’t cover foreclosure auctions or or off market transactions.
Interesting Graphs Courtesy of MLS

1. Average Monthly Prices For The Three Year Period.

Average Monthly Prices For The Three Year Period

Vs The Ten Year Period.

Average Monthly Prices For The Three Year Period

2. Monthly absorption rate for three year period. (higher = buyers market, lower = sellers market)2. Monthly absorption rate for 3 year period. (higher = buyers market, lower = sellers market)

Vs the ten year period.

Vs the 10 year period.

Here’s my summary of the Birmingham, Alabama Market as a whole.

Thanks for reading! To get my weekly post sent directly to your email Click Here!