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San Antonio Housing Market Was Red Hot in 2016

The housing market in San Antonio in 2016 was hot as home prices went to the highest levels ever. The local paper reported that 29,508 homes were sold, which was more than an eight percent increase from 2015.

The median price for San Antonio real estate increased six percent to $204,300. This was the very first time that the median sales price had been over $200,000 for an entire year, including the real estate boom years of a decade ago.

Also, the inventory of homes that are available dropped in December 2016 to only three months. this indicates there are more buyers than sellers in San Antonio.

So what does this mean for San Antonio real estate investors? Well in my experience, it means that real estate prices are going up, and buying homes for many people in San Antonio is becoming more difficult. For people who earn a good income of course, the homes in San Antonio are very reasonable.

But for people who earn $3000 per month and don’t have credit, buying a home with conventional financing is very difficult. That is the reason I focus my San Antonio investment strategy on owner financing.

Here is a good example of an under market value property that I am selling right now:

  • Finance Your Investment Properties
  • Address: 1319 S Hamilton St., San Antonio, TX 78207
  • Year Built: 1956
  • Description: San Antonio buy and hold investors and real estate investors  – Another Major cash flow opportunity, 30% instant equity under market value, almost cute cottage, needs minor help, booming San Antonio Market West of Downtown,  2 beds, 1 bath, 616 sqft, lot size: .05 acres, estimated repairs: 5K, clean/lawn maintenance/interior paint/front paint. Max After Repair Value: 69K
  • Cash Price on San Antonio Fixer Upper:  $42,000 CASH ONLY
  • Exit Strategy: Owner Finance with 5k in repairs: 5Kdown payment, $695.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 69K, see attached sold/rental comparables.
  • Sold and Rental Comps: Sold Comps 1301 S Hamiltonrental comps 1301 s hamilton

This property is only $42k cash, and with $5k in repairs, you can sell this with owner financing (you’re the bank), to a family with job and income but no credit. The major advantages of this type of deal are that you do not have repair expenses ongoing. Also, you can limit your initial out of pocket costs. If you were to rent this house out, you would have to do $20,000 in repairs, not $5000.

Owner financed homes is the backbone of my real estate investment portfolio in San Antonio. Each home earns at least 10% ROI with no expenses.  This type of buy and hold investing helps to support the working families of San Antonio as well, so it is a win win.

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15.8% Cap Rate Case Study – 1257 Saltillo St., San Antonio TX 78207

 

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This under market value property was purchased by a California cash investor in October 2016. We performed $2000 of  clean up and lawn maintenance.

The investor purchased it for $43,000, and the total investment was $45,000. He then owner financed the property for $695 per month, 10% interest, final price $69,900. It took us approximately 30 days to find a qualified buyer.

The total return on this San Antonio, under market value investment property is approximately 15.8%.

We currently recommend that most San Antonio property investors owner finance these fixer uppers, rather than rent them out. Owner financing them means that the end buyer that we find for you will finish any other needed repairs. This reduces your outlay of cash during renovations and increases your rate of return.

Below is more information about this property from the original listing:

Address: 1257 Saltillo St., San Antonio, TX 78207

Description: Investors, this is an under market value San Antonio buy and hold property for you! Only $2000 in repairs that we do for you, and then owner finance it for $695 per month!

Excellent cash flow opportunity with this San Antonio investment property, central AC/heat, 5 year old roof, booming San Antonio Market, very popular location west of downtown, 1257 Saltillo St., San Antonio, TX 78207, 2 beds, 1 bath, 960 sqft, lot size: .1 acres, estimated repairs: 2K, clean/lawn maintenance. After Repair Value: 69.9K, ,

Price: $43,000 firm – cash only

Exit Strategy:

Exit Strategy: Owner Finance with 2k in repairs: 3-5K down, $695 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 69.9K.

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Start Here To Invest in San Antonio Real Estate Today!

If you found our San Antonio real estate investing website, you probably are thinking about investing in real estate. Investing in under market value San Antonio properties can help you reach financial independence, and I can help.

m_P_1457494520381_thumb_IMG_5087_1024
A recent rehab that I did.

If you are thinking about investing in under market value properties, here is how the investing process goes:

Get Cash to Invest

  • The real estate investor, as of 2016, needs approximately $40,000 to $65,000 to invest in a first San Antonio real estate property. If you have more cash available than that, I recommend buying several properties at once so that you can build your portfolio faster.
  • The money can come from cash savings of course, or, a good second option is a line of credit on your personal residence. If you can get a 3-5% interest rate on the money, you can invest it into cash flowing real estate that earns at least 10% interest.
  • If you do not have this much cash to invest, you need to find a private source of capital that will loan you money at a reasonable rate. Or, we can help you to find investment property loans. 
  • If you borrowed the cash out of your home to invest, we will get your first property done and producing cash flow for year. Then you can pull cash out of your investment property and pay off your loan on your personal home.
  • Then you can pull the cash out of your home again and we can start the process again with another property.
  • Note – I prefer to invest in cash, but on some of our properties, you can do 20% down and get a mortgage. In that case, I look for at least $200 to $300 per month in cash flow after all expenses. I can recommend lenders for investment property financing, if you need it. 

Investing the Money

  • I mostly recommend buying and holding San Antonio  investment properties for cash flow. If you want to flip, I’m not doing many of those deals right now given the tight margins.
  • When you have capital to invest, I recommend purchasing an under market value property in the $40,000 to $65,000 wholesale range. I have properties on this site that I have scouted out personally and have judged to be in areas that will produce good cash flow for the investor.
  • You buy the property in cash, and title goes to you or your business entity.

Rehab Begins

  • I present you with a bid that lists all of the repairs that need to be completed. Right now, I usually recommend $5-10k in repairs and then owner financing the property instead of renting.
  • 50% of the repair bill is paid up front, and 50% upon completion.
  • I give you regular updates, with photos, as work is done.

Property Is Rented or Sold 

  • Once the rehab is completed, my team will work to get the home rented or sold. Homes are listed in MLS.
  • You can either rent the home out and my team will manage it for you. Or you can owner finance the home, usually with these terms – $5000 down, 10% interest, $595-$999 per month depending on property.
  • Expect an ROI after expenses of 10% or more. I am seeing 15-16% ROI on some houses as of Jan. 2017. However, have reasonable expectations on each property. I have done very well over 15 years by making 10%-12% on my San Antonio investment properties.

And that is how investing on your first property or properties in San Antonio goes! Here is a good one to get you started:

  • Address: 1319 S Hamilton St., San Antonio, TX 78207
  • Year Built: 1956
  • Description: San Antonio buy and hold investors and real estate investors  – Another Major cash flow opportunity, 30% instant equity under market value, almost cute cottage, needs minor help, booming San Antonio Market West of Downtown,  2 beds, 1 bath, 616 sqft, lot size: .05 acres, estimated repairs: 5K, clean/lawn maintenance/interior paint/front paint. Max After Repair Value: 69K
  • Cash Price on San Antonio Fixer Upper:  $42,000 CASH ONLY
  • Exit Strategy: Owner Finance with 5k in repairs: 5Kdown payment, $695.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 69K, see attached sold/rental comparables.
  • Sold and Rental Comps: Sold Comps 1301 S Hamiltonrental comps 1301 s hamilton
  • For more information, please contact us. 
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A Different Take on Buying and Holding Investment Properties Successfully

A lot of investors in San Antonio do a lot of flipping properties. Flipping homes has worked well for me in some cases in the last 15 years, but flipping San Antonio houses in the under $75,000 range can be challenging.

I deal mostly in affordable San Antonio properties, and with prices going up and construction costs going up, I have found that turning a profit of more than $3000 on a six month flip has been difficult.

Over the long term, I have been a big believe in buying and holding real estate – getting rich slowly rather than quickly. Taking a slower approach to getting wealthy in real estate might not be what you see on TV, but I think buying and holding San Antonio investment property is the key to long term wealth building, more than flips.

What Is Your Exit Strategy? 

Most of my under market value properties were bought under market value in San Antonio for $25,000 to $75,000. I usually buy and hold them for more than 10 years. Some of my properties I have held for 15 years!

Generally, I buy my houses in cash, do a few thousand in repairs, and then owner finance the homes instead of renting them out. With owner financing, I get a steady $500-$800 per month in cash flow and I have to do no repairs on the home once I have sold it.

Many buy and hold investors only consider renting out the property, and while I do have some rentals, I will usually prefer to owner finance them.

I also recommend San Antonio owner financing properties for the investor who still has a full time job. You don’t have to concern yourself with fixing leaking roofs or water heaters. The new property owner takes care of it and just pays you each month.

While I buy my homes in cash, you can get a mortgage on an investment property that is in decent condition, and then owner finance it just as you would if you bought it cash. This is called a wrap around mortgage. This is an option for people who do not have the cash to buy a bunch of houses for all cash. As long as you are able to clear $300 or so on the property, this can make sense.

The home I have for sale below would work great as an owner financed property to make you 11% or so per month with no repairs.

Only $5000 in repairs to get it sold.

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  • Address: 127 Hopkins St. San Antonio, TX 78221
  • Year Built: 1972
  • Description:  Location Location! Very popular neighborhood with extra-large back yard south of downtown. This is a high ROI, under market value San Antonio investment property ! – 3 beds 1 bath, 850 sqft, built: 1972, Lot Size: .16 acres, Yearly taxes: $1,052.00, Estimated yearly insurance $600.00, Estimated repairs: 5K, landscape tree removal, trash removal interior/exterior. ARV: 69.9K
  • Cash Price on San Antonio Fixer Upper:  $39,900
  • Exit Strategy: Owner Finance this San Antonio investment property with 5K in clean up: 5k down, $695.00 monthly P/I, 30 year amortization, 10% interest, Price: 69.9K.

 

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How Pulling Cash Out of Investment Properties Can Increase Your Portfolio

If you are like many San Antoni real estate investors, you only have so much cash to invest in your buy and hold properties.

When many of our investors started out, they only had 10k or 20k or their own money.  When you have limited investment capital like that, you have a few options before you:

  • Buy under market value properties and flip them for a profit
  • Buy and hold rental properties in cash and save the cash flow to buy more
  • Buy and hold rental properties with mortgages and buy more with cash flow

Both of those options for investing in properties can work well, and I have done both. Naturally, both of those strategies have downsides:

  • Flipping properties can be challenging to do profitably in some markets. For example, in 2016, flipping affordable homes in San Antonio for significant profit is more difficult as prices have risen the last two years, and construction costs have increased with the stronger economy. Finding under-market value properties that allow a flip profit have been hard as well. That’s why some flippers i know have been doing few deals lately.
  • I believe in buying and holding properties as rentals or with owner financing for cash flow. But it obviously takes a long time to save up cash flow to buy more properties. I prefer to buy my homes with all cash and it will take a long time to save up the capital for more, but you also can buy them with 3.5% or 5% down if you can qualify for the mortgages. That way you can buy more homes faster.

Another way to build up your portfolio of under market value San Antonio fixer upper properties is this:

  • Buy your first San Antonio investment property with all cash.
  • Rent it out after you fix it, and wait a year.
  • With property values rising, you should be able to do a cash out refinance of that property and get enough cash to at least do a down payment on another property.

Note that you will need to have considerable equity in the rental property; many lenders want 80% or lower loan to value to do a refinance.

Or, consider pulling equity out of your personal residence and buying rental properties, or owner financing them. If you are getting 3-4% interest and you put that money into a property that makes you 12% or 14% per year, you really cannot go wrong. You will need to work with an expert investor to show you how to do it, and you also need to buy the right property, but this is very doable in San Antonio right now, as prices on affordable homes are often under $50,000.

Here is a nice San Antonio investment property I have right now that will return 12-14% per year:

thumb_IMG_5926_1024

  • Address: 127 Hopkins St. San Antonio, TX 78221
  • Year Built: 1972
  • Description:  Location Location! Very popular neighborhood with extra-large back yard south of downtown. This is a high ROI, under market value San Antonio investment property ! – 3 beds 1 bath, 850 sqft, built: 1972, Lot Size: .16 acres, Yearly taxes: $1,052.00, Estimated yearly insurance $600.00, Estimated repairs: 5K, landscape tree removal, trash removal interior/exterior. ARV: 69.9K
  • Cash Price on San Antonio Fixer Upper:  $39,900
  • Exit Strategy: Owner Finance this San Antonio investment property with 5K in clean up: 5k down, $695.00 monthly P/I, 30 year amortization, 10% interest, Price: 69.9K.
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How to Avoid Buy and Hold Investing Trainwrecks

If you have considered investing in buy and hold real estate in San Antonio or another city, you probably have heard about the investing horror stories….major repair problems you didn’t anticipate, bad tenants, cash flow negative properties.

Most of the problems that investor run into in under market value fixer uppers can be avoided with proper planning and foresight. Here are a few areas that many San Antonio buy and hold investors get into trouble:

#1 Bad Location

You need to buy property where QUALITY buyers and tenants want to live. If no one you want to rent to or sell to wants to live there, you are going to have problems.

For many investors in fixer uppers in San Antonio, this problem comes down to wanting to buy the cheapest possible property, which usually means buying in a bad area. And that problem often comes down to not having enough money to really start investing.

I have seen this mistake time and time again – would be investors want to get started in buy and hold investing and really do not have the capital to do it right. Not having enough money means you end up buying cheap in bad areas, you get bad tenants, you don’t have cash reserves for repairs….pretty soon, you are in a very bad situation.

Personally, I buy in blue collar areas that are on the edge of wealthier neighborhoods. This property in Beacon Hill I sold to my father in law, which is an up and coming area on the edge of very expensive neighborhoods. This buy and hold deal worked out great for him:

hollywoodBefore Rehab – $50,000 cash purchase, zero rehab by investor, 90 DOM, resold for $80,000 owner finance, $804 per month, 14% ROI.
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After rehab, completed entirely by end buyer.

He just had the buyer pay him off, and he made nearly $48k on a $51k investment. Nice deal!

#2 Numbers Do Not Add Up

Another common problem new buy and hold investors get into is they find a nice looking property in a nice area and the rent sounds good, but when they add up the numbers, including repairs and vacancies, the expenses are greater than the cash flow.When you see this, you should always follow the numbers. Don’t listen to your heart. If there is not enough money in the deal, don’t do it. And be honest with yourself about what the expenses are, don’t fudge them to make them look good.There is nothing worse than buying a fixer upper buy and hold deal and having to put money INTO it to keep it out of foreclosure.

#3 The Property Is a Wreck

I deal with ugly properties that might scare many investors:

front 3
$20,000 cash purchase, $5000 in rehab, 65 DOM, sold for $39,900 owner finance (Fair Market Value), ROI 12%.

This is an example of our lower priced affordable home, but still an excellent investment in property. These houses will sell in our neighborhoods in San Antonio TX. It is a 4/1 on Colima Ave. in the 78207 zip code. It was purchased by the investor for $20,000 cash, which was well under market value. He had it repainted in and out and the door secured, and other minor fixes. That cost him $5000 total in repairs.

Houses in this range and location do not require major repairs and upgrades to resell.

We then sold the house with owner financing to a qualified end buyer. The buyer was qualified according to SAFE Act – documented income, tax returns, pay stubs, employment verified. All Dodd Frank underwriting rules were followed.

Terms:

  • $3000 down
  • $400 per month PI/TI
  • 30 year amortization
  • 10% interest
  • No prepayment penalty
  • No balloon
  • Final price: $39,900 (FMV)
  • ROI: 12%

That is the kind of house I deal with, but you as a new investor may want to steer clear of houses with major problems. If you get a truly ugly fixer upper, consider having an expert real estate investor/company run your investments for you.

Lastly, many buy and hold investors get into the business for passive income but find that they simply do not have the time and/or the money to do it right. That passive income dream can become a money sucking nightmare if you are not careful.

If you are looking for a good buy and hold investment property, I can help you with the below property and run the entire project for you.

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Address: 126 E Dullnig Ct., San Antonio, TX 78223
Year Built: 1919
Description: Major cash flow on this San Antonio fixer upper distressed property – 4 beds 1 bath, 1100 sqft, two large storage units in the back, Lot Size: .19 acres, Yearly taxes: $1,600.00, Estimated yearly insurance $700.00, Estimated repairs: 30K, includes interior paint, electrical/plumbing up to code, landscape, trash removal, kitchen/bath updates, central HVAC, flooring, 2 room conversions, foundation/roof repairs.
Max ARV: $109-$115k

Cash Price: $55,000

Exit Strategies:

  • Rent with 30K in repairs: $1150.00
  • Owner Finance San Antonio wholesale property with 20K repairs: 5k down, $995.00 monthly P/I, 30 year amortization, 10% interest, Price: 99K.

Our top real estate investors have done hundreds of rehabs on San Antonio investment property, so I know what I am doing on the rehab; my estimates are usually within 5-10% of the actual rehab number.

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My Best Tips for Successful Buy and Hold Investing in San Antonio

Investing in under market real estate in San Antonio has treated me well over the years. I firmly believe that investing in under market value fixer upper San Antonio properties for the long term is the best way to enjoy long term cash flow.

If you are on the fence and are about to dive into buy and hold investing, I have some simple tips to share, as a successful San Antonio property wholesaler:

  • Work with a real estate agent and investor

Most real estate agents just represent people who are buying or selling their personal residence at retail prices. The majority of agents do not invest in real estate themselves, so they are often unable to help you find a good under market value fixer upper that will produce good positive cash flow.

It can help to become an agent yourself so you can source your own deals, but it’s not essential at first.

  • Cash flow!

You need to get a San Antonio wholesale property under market value enough so that when you do the repairs and collect rent from the tenant, you will have enough to cover all of your expenses. These usually include mortgage, taxes, insurance, repairs and vacancies.

Right now, the San Antonio real estate market is pretty hot, and good fixer upper deals for affordable homes are harder to find. This is why working with a highly experienced real estate agent and investor is so important: She can help you find a good under market value deal that can produce cash flow. Also, if you work with an experienced investor agent, she will probably have a good rehab crew that can do the fix up work at a fair price.

Here is a nice wholesale property deal in San Antonio I just found that will produce $1150 per month in rental cash flow:

Front

Address: 126 E Dullnig Ct., San Antonio, TX 78223
Year Built: 1919
Description: Major cash flow on this San Antonio fixer upper distressed property – 4 beds 1 bath, 1100 sqft, two large storage units in the back, Lot Size: .19 acres, Yearly taxes: $1,600.00, Estimated yearly insurance $700.00, Estimated repairs: 30K, includes interior paint, electrical/plumbing up to code, landscape, trash removal, kitchen/bath updates, central HVAC, flooring, 2 room conversations, foundation/roof repairs.
Max ARV: $109-$115k

Cash Price: $55,000

If you do that San Antonio distressed property all cash, you should have about $700 left for positive cash flow – not bad! – after expenses.

  • Due diligence

You need to carefully consider if the wholesale property you want to buy will generate the cash flow you want.

A very common error for new fixer upper investors is to overdo the rehab or not be aware of all the things that have to be fixed.

  • Only invest if the cash flow is there

I never buy an under market value property based upon what I think the value of the house will be in a few years. That is real estate speculation and that is a great way to end up in the poor house. If after I run the numbers – property cost, rehab cost, all expenses – I generate positive cash flow of a few hundred dollars, I do the deal.

  • Don’t forget repairs and vacancies

I like to account for at least $50 per month for repairs on my fixer upper deals in San Antonio. Also, plan on a 5% loss for vacancies. However, I often do San Antonio Section 8 rentals, and I find that this type of rental income is quite solid and safe; I have Section 8 tenants who have been with me for 5 years or more.

Above all, after you find a good potential under market value property that will produce positive cash flow, do the deal. Don’t sit around thinking about it too long or you may never take action. Many people think about investing in San Antonio wholesale property, but the majority never do a deal because of fear.

If you do your due diligence as I outline, there should be no reason to not move forward on that property!

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San Antonio TX Economy Still Strong, Even With Oil and Gas Slowdown

Personal income growth since 2011 in Texas ranks #2 in the US, with only North Dakota ahead. Some San Antonio real estate investors think that crashing oil and natural gas prices would have slowed down the Texas economy, but the Lone Star State continues to do well. And San Antonio buy and hold properties continue to sell and rise in value.

Note: I don’t personally worry much about what the economy does in San Antonio anyway. In the 2007-9 crash, I bought and sold $2 million in real estate and still had my San Antonio buy and hold houses rented out with no problem. San Antonio affordable homes are always in demand. 

Economic experts in Texas this month stated that several areas of the Texas and San Antonio economies continue to keep job growth going and wages rising. For example, health care is very strong, and San Antonio has a very strong military presence with several Air Force and Army bases.

Even with low oil prices, Texas still created 1.7 million jobs from 2010-15, which is the best in the US. In the same time frame, the entire US economy lost 400,000 jobs.

The oil and gas slow down has had some impact in Houston, but San Antonio is continuing to see low unemployment and wage growth. San Antonio is seeing economic growth in the 3-4% range.

Even though oil prices are low for the time being, research shows that oil production has only dropped marginally in Texas. There are 2.5 million barrels per day produced in this state, down from 2.8 million two years ago. The small production decrease has come even though there are only 200 or so active rigs in the state, which is down from 900 two years ago.

This means good news for San Antonio buy and hold investors, and San Antonio flip investors. I continue to buy and sell real estate investments, although the prices are up 20% from two years ago.

I recommend doing Section 8 rental property for a good San Antonio buy and hold investment, as the rental market is very strong:

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  • Address: 804 S San Eduardo Ave, San  Antonio, TX
  • Year Built: 1949
  • Description: Fixer upper, under market value 4 beds 1 bath, 816 sqft, built: 1949, lot size: .1 acres, yearly taxes: $1,200.00, estimated yearly insurance: $750,
  • Estimated Repairs: 30K, roof, central hvac, windows, plumbing, electrical, kitchen/bath update, interior/exterior finish.
  • Cash Price: $48,000
  • Exit Strategies: Rent San Antonio investment property with 30K in repairs: $1,095.00 with section 8, no need to chase the monthly payment, San Antonio Housing Authority pays direct deposit to your account.
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Positives and Negatives of Section 8 Real Estate Investments in San Antonio

Section 8 rental property in San Antonio is a controversial topic in some quarters. Section 8 housing came to be during the Great Depression, when the federal government wanted to provide public housing for lower income people. Today, the purpose of section 8 is to offer subsidized housing to certain lower income citizens.

But is San Antonio section 8 property a good real estate investment? Generally, I say yes; I like to deal with the San Antonio Housing Authority and section 8 renters. That said, it depends on the property and a few other things. Let’s look at section 8 rental property pluses and minuses:

Pluses

  • Your income is stable and guaranteed each month. You receive your payment each month electronically. After a person applies and passes the background check and other screening, the section 8 voucher gives them up to 100% assistance for their rent.
  • Higher rent. You can reassess the rent you charge each year and increase it by up to 8%. So, if you rent your San Antonio investment property for $800 monthly, you could raise it to $1175 in five years.
  • Incentive to keep up the San Antonio rental property: There is an annual inspection, so if the renter trashes the house, they can lose their voucher. Note: I do serious rehab on the San Antonio fixer upper before I rent it, and pictures are taken. So if there is a lot of wear and tear, I can show the tenant did it.
  • Large number of possible tenants: The GoSection8.com website has thousands of prospective San Antonio renters and it is quite easy to get a house rented.
  • Long term rent: I find that most section 8 renters rent for many years, so you will have fewer vacancies with your San Antonio rental property.

Minuses

  • Government bureaucrats: You have to deal with the red tape of the Section 8 bureaucracy and this can cause some delays. However, I find that the San Antonio Housing Authority is pretty good to work with.
  • Slow payments: It can take longer than I like to get a renter in my San Antonio buy and hold property due to delays with the government. But, once the tenant is in, the rent comes in every 30 days on time.
  • Inspections: Section 8 has fairly strict inspections, but I do complete rehabs and I know what Section 8 looks for, so I do not have major problems here.
  • More repairs: The renter does not own the San Antonio property so it is possible that more wear can happen.
  • Late payments: I have had a few tenants over the years pay late, and reporting them can take some time.

Generally, I find section 8 rental property in San Antonio to be a good bet. I am able to get good renters into my investment properties by carefully screening potential renters.

Here is a good potential San Antonio section 8 rental property:

Front

Address: 4907 Waycross Ln., San Antonio, Texas 78220-1840
Year Built: 1971
Description: Under market value fixer upper 4 beds 2 bath, 1078 sqft,  lot size: .13 acres, yearly taxes: $1,200.00, estimated insurance: $750.00, estimated repairs: 30K; central hvac, flooring, update kitchen/bath, roof, interior/exterior finish.
Price: $49,000 Cash
ARV: 109-115K
Exit Strategy:

  • Owner Finance with 30K repairs: 5k down, $1,095.00 monthly P/I, 30 year amortization, 10% interest, Price: 109k
  • Rent with 30K in repairs: $1,095.00 with section 8, no need to chase the monthly payment, San Antonio Housing Authority pays direct deposit to your account.
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Why I Still Think Buying and Holding San Antonio Real Estate Is the Best Investment

We think that buying San Antonio investment properties with a buy and hold strategy is the best idea for real estate investing here.

Here are the five major advantages to buying and holding real estate investments in San Antonio, in our years of experience.

  • Income: Most investments you purchase offer a regular return, such as an annuity, or potential for appreciation in equity (stocks), but buy and hold real estate offers both of these. The best buy and hold real estate investments offset your expenses and debt, and also produce monthly positive cash flow of 5-10% per year. Meanwhile a typical annuity pays 3-4%.
  • Depreciation: Flipping houses in San Antonio is great and I have done my share, but the IRS is always going to get its piece of your real estate profits with flips. With buying and holding, you can write off the value of your San Antonio wholesale property over 27.5 years. This depreciation is negative income. However, it is only negative in a paper sense because your costs of upkeeping the property come out of your cash flow. So, depreciation losses reduce or remove your positive cash flow and reduce your taxes.
  • Building up equity: The cash flow from your San Antonio investment property allows you to pay your mortgage without spending your own money. Each month, also, part of your loan principle is paid off. About 15-25% of every loan payment will pay off the principle of your loan and add to your equity.
  • Appreciation: Your real estate investments can go up in value, and of course they can go down. The good news is that with properly cash flowing real estate properties, you are making profits regardless of what is going on in the market. My San Antonio properties did drop in value by 20% in the crash, but I was able to continue receiving income from them; in some cases, I even could increase the rents in the downturn.  As long as you have positive cash flow in downturns, you will be fine. I did great in the downturn five years ago with my San Antonio real estate investments. I bought and sold $2 million in real estate during the crash.
  • Leverage: If you put $25,000 into mutual funds, and it increases by 10%, you made $2500. If you put that same money into buy and hold real estate, you can buy a $75k property with a $60,000 mortgage loan. If it goes up 5%, you made around $3500, or a 20% or so return!! So, maybe the stock market has a better return on average but with buy and hold real estate, your returns are based upon a higher amount than your actual investment of principle.

As I said, I also flip houses, so this is not an either/or deal. But I like buying and holding affordable San Antonio properties because of the tax advantages, the passive cash flow, and the ability to scale. If I am holding 25 houses producing $500 of cash flow each, I have that each year, and as equity builds, I can refinance and buy more.

In summary, San Antonio buy and hold investing is the best ‘get rich slow’ scheme. You can over time create residual income, and also increase your equity exponentially as you pay down the principle, and also through appreciation and leverage.

If  you are looking for a good under market San Antonio investment property to buy and hold, here is a nice $48k deal:

Front

  • Address: 804 S San Eduardo Ave, San  Antonio, TX
  • Year Built: 1949
  • Description: Fixer upper, under market value 4 beds 1 bath, 816 sqft, built: 1949, lot size: .1 acres, yearly taxes: $1,200.00, estimated yearly insurance: $750.
  • Estimated Repairs: 30K, roof, central hvac, windows, plumbing, electrical, kitchen/bath update, interior/exterior finish. ARV $99k.
  • Cash Price: $48,000
  • Exit Strategies: Rent San Antonio investment property with 30K in repairs: $1,095.00 with section 8, no need to chase the monthly payment, San Antonio Housing Authority pays direct deposit to your account.

With this under market value San Antonio fixer upper, you can rent it section 8 for $1100 per month, and after 6 months, you can cash out refinance approximately $70,000 and do another rental property. Your cash flow on the above deal would still be approximately $250 to $300 per month.