I have made my real estate investing career in buying and selling under market value properties in San Antonio TX.
I like to lovingly refer to my properties as ‘junk houses.’ I love that most investors see them as ‘junk’ and run away from them. I have made millions off of ‘junk houses’ that other investors are scared of.
The smart investor just has to look beyond the exterior ugliness and see the potential of the house and the neighborhood.
I just had yet another under market value success story I wanted to share with you. My out of state investment property investor bought this ‘junk’ house for $25,000 in November:
It had sat empty for years and was part of an estate sale. Now this house was ugly, no question about it. But it is located in an up and coming neighborhood in 78207, where the city of San Antonio has spent millions of dollars putting in running trails, parks, shopping plazas, green space and so on. This ‘junk’ house is only 2 miles from downtown and all the tourist attractions of the city.
Yet this under market value house sat for months and no investor wanted it. I grabbed it and quickly resold it to an out of state investment property investor.
Right next door to this ‘junk’ house were these owner occupied homes:
Those houses right next door are worth more than $100,000, but no one wants my under market value ‘junk’ house because it’s temporarily ugly:
The conventional investor wanting real estate cash flow cannot see past the ugliness, but I saw the potential here because of the neighborhood revitalization and the nice houses around it.
So, I sold this house for $25,000 to an out of state investment property investor who did $27,000 in rehab (which I did for him in 30 days), which included:
- Electrical update
- New flooring (float new floor over that minor foundation issue after it’s repaired)
- Clean out
- Update bath and kitchen with tile and granite
- New light fixtures
- Paint in and out
- Finish second bedroom
Note that I own a construction company, and my rehabs are typically 2/3 of the price of most companies’ rehabs.
Note that this is a seller financed property, not a rental property.
Below are the after rehab pics of this San Antonio investment property:
The ARV on this below market value property is $79,900. We just finished the rehab in the middle of January 2016. And, by early February, we already had an owner finance buyer for it: $5000 down, $800 per month, $79,000 final price, 10% interest, 30 year note.
The house was on the market for less than a month. So on a $52,000 investment, the out of state property investor will earn about 15% ROI with no more repairs because we owner financed the house.
This is the kind of under market value investing I do – I buy ‘junk’ houses that other investors reject and turn them into little gold mines.
Most of my investors wanting real estate cash flow usually buy Seattle investment property California investment property, San Diego investment property, Los Angeles investment property, or San Francisco investment property, and are shocked at the type of returns you can get here in San Antonio TX with San Antonio investment property – with no repairs!