# 11% Builder Incentives on Alabama New Construction Rentals ## Метаданные - **Канал:** Rent To Retirement - **YouTube:** https://www.youtube.com/watch?v=8vL72iSVfeM - **Дата:** 10.06.2026 - **Длительность:** 25:28 - **Просмотры:** 169 - **Источник:** https://ekstraktznaniy.ru/video/53167 ## Описание This episode is sponsored by… NCH: Set up an LLC to protect your investments! – https://nchinc.com/rtr BLUPRINT HOME LOANS: Get pre-approved with one of RTR’s preferred lenders at https://bluprinthomeloans.com/renttoretirement/ Alabama new construction is getting serious attention from real estate investors — and in this episode of the Rent To Retirement Podcast, Matthew Seyoum and Tommy Brown are joined by Frank Merry to break down why. Frank shares what makes Alabama attractive for out-of-state investors, including lower property taxes, landlord-friendly laws, affordable new construction, strong rental demand, and major employment drivers across markets like Birmingham, Huntsville, Kimberly, Tuscaloosa, and Columbiana. 🏡 The biggest highlight? Select Alabama new construction rental properties are currently offering up to 11% of the purchase price in builder incentives, which may be used toward closing costs, rate buydowns, property management reserves, appliances, fencing, and ## Транскрипт ### Introduction to Alabama new construction [0:08] Hey renter retires, it's Matthew Sum here with another episode and today we're here to talk more about Alabama new construction with my very special guest Frank Mary. Frank, how are you sir? — Doing well today. Good to glad to be here. — Yeah, appreciate you joining us. Um you and I have uh been working together since I actually started at Retro Retirement years back. So, um, we have a long working history with helping investors out there in Alabama. Excited to have you on the podcast. Let's, uh, jump in a little bit. And before we get into the incentives, um, Tommy and myself, we were on a previous episode talking about 9% incentives, 11% incentives, which again is not normal by any means for real estate. — But before we even get to the incentives ### Why investors from expensive markets are looking at Alabama [0:51] incentives, — we have investors who are in some of those big ticket markets, right? So, Chicago, New York City, Los Angeles, um parts of maybe the m the Mountain West or places where you don't necessarily know a ton about Alabama, — right? — Can you speak to Alabama real estate in general right now and what you're seeing? — Sure. Alabama real estate to me ### Affordability, landlord-friendly laws, and low property taxes [1:12] has been and most of our investors are coming from those places you just mentioned. Um, probably one of the biggest reasons early on is your money can buy more of a house in Alabama than it can in say Los Angeles or New York. Um, so the money just goes further. You can get a nice three, four, five bedroom here between 250 and 350. Um, you know, two-car garage, yard, all the rest of that. Well, my impression is in some of those other bigger cities is like you're buying a studio or something like that. — Yeah. Um, so that's one of the reasons you just you get more bang for your buck here. Um, Alabama is a landlord friendly state. Um, some of those places you mentioned are probably more tenant friendly. Um, and obviously no investor ever wants to have to deal with a tenant that you need to evict for non-payment or for whatever reason. But if that happens here, the laws in Alabama tend to be a lot more sympathetic to landlords and the ability to get somebody out of a property if they're not paying or whatever. um property taxes here tend to be really low. Um I know one of the other um markets that you guys, you know, not to name them, but one of the other markets that y'all sell in um which is in the greater southeastern area, u but they their property taxes tend to be a lot higher. — So at the end of the day, this is all about cash flow, right? And you're trying to um you you've got your rent coming in, but then now you're paying your annual taxes, you're paying your insurance, etc. Uh I think we're one of the lowest property tax states. um out there too. So that kind of helps. ### Huntsville growth, NASA, Space Force, FBI, and tech jobs [2:46] But that's probably part of the overall picture of why people are choosing Alabama. Um if you think about the way we're divided is kind of in the north, you've got the greater Huntsville market. Um Huntsville, there's a lot of activity going on there. Um you've got the NASA presence is there. Space Force is relocating there. Um lot of engineering, a lot of technology. Um the FBI is building a second headquarters there. Um, I'll be honest right now, we've got homes in Huntsville that we can sell. Um, I don't think we've necessarily uploaded any to you guys recently. Um, but just so that you're if people are watching this video and they're like, "We love Huntsville, want to get there. " — Yeah. — My one and I own a I've got a rental in Huntsville, so I like the market. — Um, I think right now it may be a little overbuilt from a rental standpoint. So, if you're going as a long-term play, it's a fantastic location. And I think the upside to Huntsville is huge. You just have to realize you're in a lot of there's a lot of competition um because there's a lot of homes there. A lot of people are trying to rent homes. — So your lease up time may be just a little bit longer. Um and you may not be able to kind of increase rents quite as aggressively as you want to just because there's so much competition on the ground right now. That will dissipate over time. Um but that's the northern part of the state. ### Birmingham, Tuscaloosa, and Central Alabama rental demand [4:05] The center part of the state is where we're located. We're in Birmingham, Alabama. Um, so you've got Birmingham, greater Birmingham area, um, which is the largest city here. So roughly, let's say, 1. 5 million people in the greater metro area. — To the west of us is Tuscaloosa, uh, which is for anybody who's watching this who's a sports fan, they know that's where the University of Alabama is located. Um, Tuscaloosa is actually a great rental market and not so much because of the students who go to the university. Um, but there's like 12,000 faculty, staff, administration there. There's a huge Mercedes plant right outside of Tuscaloosa that employs about 6,000 people. Um, they've got a large medical center there. Um, rental demand in Tuscaloosa is fantastic. Um, like people don't tend to have extended vacancies there, so there's just a constant demand for rentals, but we're all here kind of in the center part of the state. And then down south, um, as you get down towards the Gulf, um, we've got properties that we can put people prices tend to go up a little bit more as you get closer to the coast. — Um, so we tend to focus mostly in the center in the northern part of the state. Um, just seems to be a stronger rental market um, for people. But that kind of answer give you kind of listen. That's amazing. I appreciate that and I'm sure our listeners do as well, right? Um, we've been, again, we've worked with so many investors who have loved and been surprised by to be honest, right? Things like you that you talked about, whether it's the property taxes or like, wait, I can get how much house for, you know, $275,000. They'll can always confirm with me, are you sure it's new construction? Like, it's brand new, right? It's like, yes, it is. — Right. — So, I love that. Thank you for that. ### Understanding Alabama’s suburban and driving lifestyle [5:51] Um, — well, let me jump one more thing, too, because a lot of times the buyers that are coming from the markets that you talk about, a lot of times they're used to and you've got to I'm sure y'all do a great job doing this. Encourage people to realize what I live in personally in say Los Angeles or in New York or Chicago or wherever is not what it looks like here on the ground. So, I'll get investors all the time that'll say, you know, well, um, let's talk about walkability because they're thinking in an urban context and I want to be able to walk to the grocery store and walk to my job or bicycle to this or that or the other. — And I kind of laugh, not to be mean to them, but it's just like we're a driving um community in Alabama. So, every if you go anywhere, you're hopping in your car to drive there. Um, and people are just used to that. So, like I live 30 minutes south of downtown Birmingham. Um most of the communities that we sell in the metro area are going to be on the outskirts. They're in the suburbs. — Yeah. — Um that's the way that people here, they're used to that. It's kind of like Yeah. You just hop in the car and you drive, you know, in LA you if you had like a 45minute commute, that means you're about three to five miles from work probably. Um here you can have a 45minute commute and you're literally 30 to 40 miles outside of town. And people like that. They like that small town feel but close enough proximity to be able to get into the metro area to whoever their employer is. So just to realize that as an investor that that's kind of the way the mindset is in Alabama that people aren't necessarily looking to be um right in the downtown area of any of these, you know, cities. They they like having a little bit of greenery, space. Like I said, I'm 30 minutes south of town. It's nice and quiet out here, which I enjoy. But I can get to anywhere in Birmingham, you know, with a reasonably short drive. — I love that. The cheapest way to form an LLC can become the most expensive mistake later. A lot of real estate investors use a bargain filing service, check the box, and assume they're protected. But when a tenant issue dispute or lawsuit comes up, that's when the structure and the guidance behind it really matters. If you're going to own a rental, this is not the place to cut corners. That's why Rentto Retirement partners with NCH. With more than 32 years of experience and over 250,000 businesses formed, NCH takes a done right the firsttime approach to business structuring asset protection. And with Premier LLC package, you can get more than just an LLC. You also get Premier coaching included at no extra cost. 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RTR coaches you on the right markets and properties. Blueprintomeloans handles the financing to help you scale. Visit blueprintomeloans. com/renretirement or call 888-3431043 to book your free strategy call. Don't wait. Well, then to that point, um maybe zooming in just a little bit, um where you're in multiple markets within Alabama, right? Um something that we talk to a lot of our investors about, and thank you for piggybacking on that a little bit. It's understanding, hey, it's where you live and where anyone would want to live in the United States is going to be different. One, and then two, um sometimes investors pigeon hole themselves, right? where they want to know the scores of the local uh the test elementary schools, right? And I'm not saying education is something to scoff at. I'm just saying that might make it too narrow of really good investments out there. Right. So, I'm talking to a couple of the markets you're in and we'll save one of my personal favorites for last, but um let's ### Kimberly, Alabama and why investors are watching this market [10:24] maybe pick one. So, let's talk about Kimberly, for example, right? Someone's like, "Oh, I've never heard of Kimberly, Alabama. " Is there something you can speak to that? Because um that is one of those properties that was increased to 11% in incentives, — right? — Total incentive. Then that's 11% of the purchase price towards incentives, right? — Pay down, cash back, uh the whole nine yards. So, can you talk to Kimberly Alabama a little bit? — Yeah. Um love Kimberly. Um, Birmingham, I would say most of the growth in Birmingham initially is it, you know, all cities, they tend to spread out along the spokes, the interstate spokes. — Sure. — So, I would say most of Birmingham's growth has been primarily to the south, east, and west. — Um, as those communities continue to get further and further away, — Yeah. — people have started looking to the north side of town. Um, so I65 runs the full length of Alabama. So all the way from Mobile down on the coast up to Huntsville in the north right before you get into Tennessee. Um so right the I65 corridor runs in between, you know, Mobile, McGomery, Birmingham, Huntsville. Okay. — Kimberly's right on that I65 corridor. So it's about 20 minutes north of downtown Birmingham. So it's closer than where I live personally on the south side. Um it's got the highest per capita income in Alabama. And I realize it's like once again it's Alabama. We understand. Um but it does kind of go to this is not necessarily like a little podunk — farming community or something like that. — Yeah. — Um it's growing. It's still small. Uh but the nice thing I like about that is one is proximity to downtown. Um — the just the like I said the per capita income is really high and I think there's not as many rentals there currently. So it's a great opportunity to get in. I think both from an appreciation standpoint that I think this is going to continue to go, prices will continue to go up, but also you don't have a whole lot of competition as far as rentals. When I talk to our rental management company, they're like, as soon as you put one of these under contract, we've got applicants. — I mean, they're lined up. They want to be in this community. So, it's kind it's still relatively small, still relatively new. Um the history of it is I mean, Kimberly itself has been around for a long time. used to be um coal mining in that part of the area. So, they quit mining there. I think back in the 40s or 50s or something like that. Um but it's that's just the direction that we're starting to see for Birmingham. People are communities are starting to pop up going north of town. — Um so once again, they're going to be closer there than where I am personally on the south side. — You brought up a good point that I want to touch on again. Uh so a lot we have some um properties on our inventory sheet that are leased, right? Great. There's a tenant already in place. There's specific reason why yours are ### Investor-owned rentals vs. primary homebuyer communities [13:13] vacant, right? And if I can and I'll let you kind of double down on what I want to mention, and this is probably a good pop quiz for me as I help my investors, but the way I understand it is you're also selling these properties to first-time home buyers, to local buyers who are living in as primary residences, right? So, you can have a rental right next to someone who's planning on living there for the next 10 years of their life, — right? So, you're not just entire builder rent communities. So, there is a value to that as well. Is that right? — Yes, it's right with one uh clarification. We're I'm not personally selling to first-time home buyers. Um like we work exclusively with investors. — Gotcha. Right. So, Robert, who's the other licensed agent on our team um along with Mike McBallen who owns our um agency. Um we only work with investors. So, I don't go out to show retail buyers, you know, show the homes and walk them through because they want to live in it personally. So, I'm only we exclusively work with investors, but to your point, yes, the builder has got retail agents on the ground in those neighborhoods. And ironically, that's who we compete with. So, we're, you know, they're out there trying. So, we as we head into every weekend, I'm always kind of like, — you know, what's because the weekend's a big retail sales time and it's kind of like, man, I'm hoping everything on our list is still there when we get here Monday. Um, which we don't know, you know. So we anytime I get a contract request, we have to immediately go to the sales manager and say, "Hey, is it still available because I want to write a contract? " — Um, and he'll tell us that. But to your point of it being a mix, yes, I would say the vast majority of these communities that we're selling in, the majority of people are going to be primary home buyers um and not renters. So it's kind of like but they all permit rentals. So it's not Dr. important. You know, we we've kind of got I wouldn't say it's an exclusive with them, but um in Alabama, we're probably the major real estate company that is selling to investors, you know, of their inventory. Um so, it's kind of it is a nice mix though. You you've got a lot of primary home buyers and like I said, I every time I send in a contract request, it's kind of like fingers crossed that you know, we get response back, yes, it's still available because we never know until — I mean, that's a good problem to have, right? that most that a lot of people like the properties that you guys are offering. So, and then our investors have had the same experience. So, um then pivoting back to the markets really quickly, I wanted to touch on one of my personal favorites, which is Tuscaloosa. ### Why Tuscaloosa has consistent rental demand [15:33] Um I have investors that top of the year, I'm expecting a text message, hey, we're looking for another one in Tuscaloosa. Um I and a lot of the listeners already know this, I personally started investing in 2017 outside of a major university here in Utah. So, I love that play um both as the immediate vacancy uh mitigation and for the long term just because you have major universities that are consistently bringing in new lifeblood, right? So, I'm originally from the DC area. I moved here for school and here we are, you know, a wife, two kids, and 10 years later or 15 years later, I still living in Utah. And so that same thing I've seen happen, you know, outside of University of Alabama where you have faculty, staff like you mentioned, but then also people that are coming and kind of building a life in that area that they ended up going to school in. Um can you speak to maybe a little bit more to the why u with the vacancy? I know that there is a huge there are huge hospital systems, there are huge um automobile manufacturing plants actually n statewide with Alabama, right, which is a good thing to consider um in terms of job security. But can you speak to just h why the vacancy rates are just so low in Tuscaloosa consistently. — I think Tuscaloosa as a community for whatever reason um and this isn't specifically students um rentals. Um there there's more people per capita that rent in Tuscaloosa than I think almost any of our other communities. And I don't know if it's because like say the Mercedes plant which is right outside of town. Um, if those workers know they're coming in and they're, you know, this is they're going to be at this facility for a year or two or three or whatever and then move to some somewhere else with Mercedes. Um, faculty and staff and administration, I mean, there's some turnover there. U, but it's just um the medical establishment, you know, nurses are constantly coming in and out, you know, as far as that goes. So, it's just it's always a very dependable rental market. I mean, I love Tuscaloosa. If I wasn't married to an Auburn grad and have both my boys go to Auburn, I would buy one there, but for those of you who live outside of the state, it's a blood thing here. So, um, — I my wife would never approve me um, putting any of our investment money into Tuscaloosa. So, — no business reason whatsoever. Uh, completely emotional. I love that. Well, thank you for that because the clarity is important, right? Um, now I think lastly before we let you go, I wanted to maybe talk more about the numbers, right? Obviously that's what a lot of our investors are here for. And the nice thing about it is a lot of our investors are essentially market agnostic, right? They're really looking for where ### Breaking down the 11% builder incentive opportunity [18:13] it's most advantageous. And I can't think of something more advantageous than 11% of the purchase price. I think that's — outstanding. Um Tommy and I, we joked back and forth that it feels like one of those things that people are getting used to and then two years from now think, "Oh, I'm so glad I got $4,000 towards closing cost, but man, I could have gotten in earlier. " Right? So, I'm looking here at obviously the sheet the inventory on renterretirement. com. Um if you're listening to this again, renterretirement. com and you can see our whole inventory sheet there. But I mean, Tuscaloosa, Colombana, Kimberly, um, all of these markets have 11% of the purchase price. And to be clear, and confirm if I'm incorrect, Frank, but that can be used however they'd like. It can go toward their closing cost, that can go towards their buy down, that can um assist them with paying back paying themselves back for their down payment postclosing, right? Um what have you seen investors use and been successful with these large of incentives? — Um yeah, you're absolutely right. ### How investors can use incentives for closing costs and rate buydowns [19:19] The 11% and we've got probably about 17 18 properties right now. They have to close in June. So that's the caveat with this 11%. Um but they can use it towards their lender buying the rate down. closing cost. Um, sometimes investors will come in, like I had one just the other day who's like, I really want to build a fence because I want to have this be pet friendly, you know, for prospective tenants. And was like, fine, you've got 11% of the purchase price that's available. You 100% can use part of that money. Um, probably will do it. The builder doesn't build fences. So, what we'll what we talked about doing is having the rental management company. Um, will basically they will hire a vendor to go in and put a fence in, you know, once the home closes. — Yeah. Um, so you know, put a fridge in. Some investors will put a washer and dryer. I don't generally encourage it because I think most tenants here won't come in expecting it. — Yeah. ### Conventional vs. DSCR loan incentive limits [20:15] — Washer dryers tend to have a little bit more mechanical issues in a relatively short period of time. So, um, but if you wanted to do that, you've got money available to do it. The way it works is depending on whether you're doing a conventional loan or DSCR loan. With a conventional, you can only use 2% towards your towards lender cost and closing costs. Um, with a DSCR, you can use up to six%. But whatever the balance is of that 11% at closing, um, the rental management company invoices the balance. And so, it goes into your account with at the rental management company. um probably within the first let's I don't want to overcommit them but let's say within the first 60 days once you've got a tenant in place you've covered any kind of lease up fees or any kind of let's say you're building fence and so anything like that you're spending money on you will get to the monthly dispersement and anything that's in a balance beyond say what you want in reserve for your maintenance gets dispersed to you so um they can't I think by mortgage law or real estate law. Um the builder can't give you the money at closing, but the builder can they put the dollar amount into the contract and as long as it goes towards closing costs, rate buy down, rental management or any other kind of vendor purchases, you all of that money can get used and it winds up in the rental management account, whatever the balance is. — Thank you for clarifying that. It's helpful, right? Because the investor is sometimes concerned, well, how am I going to get my money? It is an owner's draw. You can that is good as cash. You can do whatever you'd like with those funds. I mean, to reiterate something you mentioned, right, we do have investors that split that up however they see fit once the investment actually stabilizes. So, you got people that are leaving some in for, you know, incidentals or what have you or paying the entire thing out for a fence, right? So, it just and I will have people who ask like, can the title company just cut me a check at closing? It's like, no, they can't. — It's that's what there's legalities that are tied to that. You will get the money, — so you don't have to worry about that. But it it we just have to do it legally along the avenues that are approved and in the contract. ### Why timing matters for investors on the fence [22:21] — Absolutely. That's amazing. Okay. Well, then in closing, um we have a lot of investors who might be listening to this and they're for one reason or another just not jumping in yet, right? And they've loved Alabama. They've been researching it and now this just feels really advantageous. I mean, it feels like a good time. What is something you would tell the investor that is concerned? Maybe they don't have their first property or they only have one and they're trying to gear up for the second. And what would you say to that investor right there? — Um I would say none of us knows the future. Um but I think we have seen a rise in interest rates where obviously it is pushed where it's a challenge. You know looking at cash flow models. Um I think rates go up and rates come down. So obviously those who have been doing this for a few years remember when they were getting 3% 4% loans. Um those were good times, you know. Yeah. Now that we've been up in the six, seven7 range, I think it's going to slowly drift down, but 11% back from a builder is kind of we haven't seen this. This is the first time we've seen this amount of money. Um, now they're the reason they're doing it, just to clarify for your viewers, is every builder goes through, they've got finished inventory that they want to clear out. Think about like with a car dealer. you know, the car dealer when they've got cars that are delivered, they wind up paying if that sits on their lot. So, they end of month, end of quarter, end of year, they get really motivated to move those cars. Same thing with builders. Builders once they finish a house, they don't want to have it sitting there. It's costing them money to keep it on the ground. So, they get really motivated um especially at the end of a quarter. And that's what's happened. Like, we we've had the last two months, we've had 9% that we could offer to your investors um to use for the month of June. and then it has to close in June. — Um they're giving 11% back. So it's kind of we haven't seen that um this amount of cash back. So if nothing else for somebody who's kind of on the fence today, you know, we've got plenty of time. I think most of y'all's lenders are committed to like a three-week close. Um, so we can get this in before the end of the month, but it's when you're thinking about a huge chunk of cash back to help cover all these costs and then you you get dispersed the remainder of it. It's it it's a pretty sweet deal. — Yeah, it's definitely hard to pass up. Thank you so much, Frank, for jumping on this episode. We appreciate it. Um, we wanted to have you here at the top of the month because of the timelines being tight. Um, but it's also exciting ### Final thoughts on Alabama real estate investing [24:49] right? It's not just all nerves and anxiety. It's exciting to have a kind of an in. It feels like the 11% incentive is someone putting their foot in the door and kind of let cracking it leaving it cracked open for you to start your investing journey. Uh and this is a great springboard for that. So, um I appreciate that a ton. Um Frank, thank you for taking the time to talk with us today and thank you all out there for joining us to get yourself educated. We'll talk to you on the next episode. Thanks. — Thanks for watching the Renttoret Retirement YouTube channel. Check out some of our other videos like this one or this one here.