May 2021 – We are in the process of adding new under market deals to our site. Please contact jmpickett@gmail.com or 210-865-0742 to be added to our buyers’ list.
House Prices Soaring In San Antonio in 2021
The spring selling season has started in San Antonio, and home buyers and investors looking for properties should expect to pay more, no matter if you’re buying a $50,000 under market value property or a $1 million mansion.
A recent study revealed the annual appreciation of homes in San Antonio is between 7-8% as of February, compared to a year ago.
Lower-priced homes in San Antonio saw an 8% rise, with a typical price of $153,000. For homes up to $226,000, the rate was 8%. Home values in more expensive homes above $366,000 grew 7.3%.
Also, the median price of sold homes in San Antonio increased 12% in March 2021 to $268,000, with the average of 45 days on the market, which is down 35% from last year.
We’re seen such an increase in prices this year that some worry we might be looking at a housing bubble like 2008. But this doesn’t seem likely; the conditions causing the increase this time are different, so we’re probably in for a steady rise for the foreseeable future.
Excess lending is largely what drove the 2006 and 2007 bubble. But lending standards are tighter now. Most buyers need higher FICO scores and down payments, and debt to income ratios are tighter.
Also, there still is a shortage of homes in San Antonio; the inventory dropped to only 1.3 months in March 2021. That’s well below the typical six month supply that is thought to be a good balance between buyers and sellers.
Another factor reducing supply – and this is something that should concern investors looking for San Antonio wholesale properties – is high material costs. Prices have tripled since 2020 with the average cost of a new San Antonio home almost $400,000.
Available land is scarce and more expensive, and the permitting process is taking longer.
More people are moving into Texas from more expensive areas, drawn to the lower real estate and living costs. Real estate investors are buying up a lot of under market value real estate properties in San Antonio, too. This increases prices.
But while you will pay more for San Antonio wholesale properties, you can charge a higher price when you owner finance or rent it. Many of our investors are attracted to the owner finance model in 2021 because you can charge a substantially higher price to the buyer.
Also, the economy is strong and recovering from the pandemic. There are more jobs available than workers, so there are many blue collar, middle class workers who want a house of their own but can’t get a traditional mortgage.
Here at Texascashflow.com, we’re currently searching for new deals that meet our criteria. Don’t worry – we’ll have our listings updated soon with more fantastic wholesale investment properties.
Why Seller Financing Often Makes Sense in San Antonio
As successful under-market value real estate investors in San Antonio, our investors own plenty of rental properties and owner finance properties. Depending upon market conditions, we may do one investment property type more often than the other, but we always strongly believe in the San Antonio owner finance market as a way to grow your wealth.
Some real estate investors are afraid of owner financing a property. Why would you want to be the bank? Most investors want to put down 20% on a property and rent it out. Or they want to flip the house and move on to the next real estate investment deal. But there is a lot of money to be made by owning the property in cash and owner financing it. You also can have a mortgage on the home and do a wraparound mortgage as well as you like, but that is a topic for another blog post.
The major benefit of owner financing a property is that you enjoy having checks mailed to you each month for the mortgage payments, and you do not have to do anything else. Owner-financed property is a nice fit for the weary landlord, tired of the repairs and hassles of rental property. That is a major reason why owner-financed houses in San Antonio became our investors’
Offering seller financing on a fixer-upper will open up many opportunities to make a lot of money with your investments. Many potential buyers of a home do not qualify for a traditional mortgage. In San Antonio, we have millions of Hispanic renters who want to own their own home. But they have bad credit or no credit; many deal only in cash. These potential buyers need someone to give them financing if they are ever going to buy. This is a great opportunity for you to make a good ROI on your home. You can ask for a higher price for the home and get a good rate of return.
For example, check out the following San Antonio property:
Booming south side market, 318 Elks Dr. San Antonio Texas 78211, lot size: .12 acres, 3 beds 1 bath, estimated rehab 7K, paint interior/exterior, plumbing/electrical up to code, Max ARV: 85K, Asking Price: 49K, sold comps are excellent in this neighborhood.Max ARV: $85,000Asking Price: $49,000
Exit strategy: owner finance, 5k down payment, 85K sales price, $850 monthly PI/TI, 30 year amortization, 10% interest or rent $850 monthly.
This home is $49k and needs only $7k of rehab to sell it, in my opinion. Thus you are in at $66,000 and can sell it for $85,000 (ARV) and charge 10% interest and make $850 per month.
Those terms are pretty typical for this type of house, but as the bank, you can charge whatever you want. If you ask too much, you may take months to sell it. But if you negotiate lower terms, you can sell it faster.
We strongly recommend as a real estate investor having at least some of your real estate portfolio as owner-financed properties, especially in San Antonio.
Vital Investing Details Below
- What: San Antonio investment property
- Investment Type: Single Family Home Distressed, Fixer Upper Homes
- Investment Strategy: Long Term Buy and Hold Cash Flow – owner finance or rent
- Price Range: $50,000-$100,000
- % Under Market Value: 15%
- Repairs of Below Market Value Property: $10,000 – $50,000
- Rehab Time: 45 days
- Exit Strategy: Owner finance (10% interest, 30 year note, we find the qualified buyer for investor); OR flip for a 30%~ profit (certain properties only).
- Closing: ~14 Days
- ROI: ~10% (CAN be higher but we never over-promise)
- Monthly Real Estate Cash Flow: ~$1000-$2500 per month
- Full Investor Prospectus/Overview