So, To Make A Short Story Long...

I am sometimes asked why am I investing in Alabama. Depending upon who is asking, my answer ranges from a simple shrug to a more complicated answer that involves investor jargon.

Once upon a time, when loans were easy to get and down payments were low, Marty Sunshine and I bought our first rental property near our home. After the shock and the naivety wore off, we found it to be a decent endeavor, so we bought a few more in the general vicinity of Mesa Arizona. Some of these were with business partners. Some weren't.

The people who lived next door to the first rental home we bought moved to Alabama. When they got there they said they were having trouble finding a rental home, and would we be interested in buying one. They found one they liked for about $80,000.

At the time, real estate in the Phoenix area was selling for about $150,000 for something comparable--but probably closer to $200,0000. And, at the time, real estate was doing this thing you might have heard of called, "appreciating." Additionally, I found out I could rent that $80,000 home in Birmingham for $850, or roughly 1 percent of the home's purchase price. A particular metric Mr. Partner happens to like. And not a metric you are likely to find in the Phoenix area--even today.

A few months later, I got a call from the agent I used on the first transaction. She knew a family who was in a situation where they had the income, but couldn't qualify for the home they were looking at. My agent insisted these people were top-notch. Was I interested in helping them out? That family is still in my home, living happily. I have never personally met them.

I wasn't really planning on making Birmingham my main focus, but the market here in Phoenix started getting out of control. At the time, I couldn't buy homes in Phoenix for anything close to what I could buy them in Birmingham for and make any type of cash flow. We sold what we had here and bought over there.

I also found out how bad the shortage of rental homes happens to be in Birmingham. With the agent's permission, a few months later, on a lark, I put an ad in the paper one Sunday with the agent's phone number. The ad was supposed to run for a week. I advertised "rent to own, you find the house, we do the rest."

My agent called me around 11 a.m. Sunday morning to tell me her voice mail was full, her phone hadn't stopped ringing and, what exactly did I have in mind? "I don't know?" I said. I was expecting about three calls total. By the end of the day, she had over 100 calls.

First thing Monday, I pulled the ad. I immediately begged Bliz to keep my books, screened a few of the potential tenants, got my investors together and bought several homes. I still have the homes, most of the tenants have moved on or have sold their homes and all but Mr. Partner is left from my original three partnerships.

There was a time when I would have told you managing five homes long distance was a chore. Now that seems like nothing. I sort of miss having only five homes. As the market has changed, so have our challenges. But, like Marty Sunshine has reminded me, we would have challenges here too.