Blog Posts – Page 9 – TexasCashFlow.com

February 9, 2016May 16, 2021

Under Market Value Real Estate Investing Prospectus

Is investing in under market value distressed homes in San Antonio, TX right for you? Make a decision after you review our full Investment Prospectus or Manual below.

This document tells you exactly who we are, what we do, how we do it, and proof of our success.

You can read the entire prospectus on this page, or download it as a PDF:

Investor Prospectus – TexasCashFlow.com V 2.05

Also, please view our Investor Guidelines, or “I Just Bought a House. Now What?!”

Once you are finished with your due diligence, please:

Contact us with questions
Review under market value San Antonio properties for sale

Thank you for your interest in our under market value properties, which often make good out of state investment property.

TexasCashFlow.com Investment Prospectus – Affordable Home Investing – San Antonio TX

Address: 604 West Hollywood Ave., San Antonio TX 78212

Before: $51,000 Purchase Price

After – 12% ROI, $125,000 Market Value

I. Strategy – Invest in Below Market Value Affordable Homes in San Antonio, TX USA
TexasCashFlow.com is a Texas real estate investment company that buys, sells, rehabs and markets affordable homes in San Antonio TX. These are positive real estate cash flow property investments, and are excellent San Antonio investment properties.

Highlights:

Strategy is long term buy and hold of affordable homes 20-30% under market value ($40,000-$80,000 wholesale), with owner financing and no maintenance expenses. Superior cash flow.
The under market value property investor owner finances the property to a qualified buyer we find for them – 30 year term, 10% interest, full amortization, no pre-payment penalty.
Typical annual ROI will be ~10%. with no additional maintenance expenses.
We prioritize positive real estate cash flow over property appreciation in distressed houses. Unlike Seattle investment property and San Francisco investment property, real estate cash flow is our goal.
Our neighborhoods and end buyers are mostly blue collar, Hispanic families who work hard and earn $3000-$6000 per month. They are family oriented and have a strong work ethic.
Most live their whole lives in these neighborhoods and have strong family ties there.
These affordable houses are strong performers in real estate downturns (see page 3 for more details).
Active in San Antonio market since 2001, nearly 1000 transactions completed and more than 300 rehabs. We have dozens of cash investors around the US and the world (references available for serious investors with POF).

We Understand the San Antonio TX Real Estate Market
Since 2001, we have developed a deep grasp of the metro San Antonio area. The affordable homes that we transform are well known for their value and investor return.

These affordable, under market value distressed homes with positive cash flow are available to us under market value for several reasons; the most common source is estate sales. .

San Antonio TX USA — An Excellent, Long Term, Stable Growth Market

San Antonio TX is a fast-growing, booming city, recently cited by Forbes magazine as the fastest-growing city in the US for millennials (ages 20-29). The Alamo City is blessed with a diverse industrial base, hard working immigrant population, low real estate costs, no state income tax, good weather, and a generally pro-business regulatory environment. It also was ranked #3 by Forbes in 2013 in fastest-growing tech spots in the US.

Many out of state investment property investors invest with us, especially investors who have bought Seattle investment property and San Francisco investment property in the past.

About the 2007-10 Real Estate Downturn

While the most recent real estate downturn affected San Antonio as it did most areas, the impact was less pronounced here. In fact, the Brookings Institution ranked San Antonio in 2009 as the top economic performer in the US after the recession. This confirms our experience as investors here. The city’s real estate prices tend to be stable and less volatile than many other metro areas of the USA.

We noticed that the primary negative effect of the recession in San Antonio was in the higher end, consumer retail real estate market, particularly homes from $200,000+. Buying wholesale, under market value – what we advocate – offers protection in a downturn.

It is true that during the height of the downturn, RETAIL buyers were harder to find for a time for our houses, but the owner finance market (our major focus) was unaffected. And, the values of our existing housing portfolio didn’t decline at all. We also found that for a time, we were able to buy some affordable homes for 30% less than before the downturn. This was actually a very profitable time for buying our affordable homes.

Bottom line – our portfolio saw little depreciation in the downturn. And monthly cash flow on owner finance properties was unaffected.

Also, we have at our disposal many competitive hard money lenders that we have work with for more than a decade. Please inquire with us if you need a hard money loan.

III. Our Values

As noted above, we invest in under market value homes in San Antonio TX. The main purpose of this is to provide a superior rate of return for our investors.

However, it is vital to note that we view our affordable housing model as a philanthropic enterprise, as well. Using our owner finance model, we are privileged to offer affordable homes in our area to hard-working, blue collar workers with steady work history and documented income. You can feel satisfied that not only are you earning an excellent ROI – you are contributing to the revitalization of our city and helping a family live the American Dream.

Our company has contributed to this process by rehabbing and reselling hundreds of houses with owner financing to hardworking families. This increases the tax revenues flowing into the city, which in turn is used to build new infrastructure in our neighborhoods. We are thrilled and honored to be a part of this revitalization process.

IV. Our Process

Our real estate investing company handles the entire cash real estate investment process for you with fixer upper properties. All you need to do is to purchase the property, and enjoy the return. We handle all of the details:

Property acquisition (title is guaranteed to be lien-free and clear at closing)
Property rehab (you receive a detailed, itemized bid; 30 day or less completion)
Resale – whether owner finance or retail
All closings are handled by West & West Attorneys at Law, P. C., 2929 Mossrock, Suite 204, San Antonio, TX 78230.
Closing documents can be Docusigned by email or delivered by mail.
We are available to manage your owner finance or rental portfolio. Please inquire.
Investor is regularly updated weekly on rehab and resale progress (includes photos).
Houses are marketed on MLS, Craig’s List, word of mouth, and with signs posted in the neighborhoods.

About Rehab

We use a full time construction company, and all contractors are highly experienced, licensed and insured. We handle the entire rehab project in 21-45 days maximum. All required permits and engineering reports are included in your rehab price. Your detailed rehab bid will be sent to you after closing.
Rehab costs rarely exceed the stated budget; however, if something unexpected arises during the project, we will contact you to discuss options.

Most of our properties have ‘foundation’ problems, but the vast majority are minor and can be fixed for $5000 or less. Most are pier and beam foundations and are quite easy to fix.

V. Record and Returns

Over the last 10 years, we have bought and sold approximately 75 houses per year, the vast majority of which have been owner financed by the investor with ROI ~10%. The rest were either flipped for a 20-30% return or rented out for a 10% rate of return. Several of these projects are located later in this prospectus.

We are able to achieve these returns primarily through the following ways in our fixer upper homes with positive cash flow.

Buying affordable homes for 20-30% under market value. We never purchase houses at market value. This offers you better returns, and safety in a downturn.
Performing property rehabs at wholesale prices, saving the investor thousands of dollars off of traditional rehab costs.
The expert knowledge of John Majalca in our neighborhoods – knowing how much rehab to complete. The common error in rehabbing affordable homes is spending too much. We do not.
Our goal is to complete just enough rehab to resell the house.
Our end buyers complete the rehab at their expense.
Please see specific deal returns at the end of this prospectus.

VI. Fees

Our real estate investing company is a large volume wholesaler, and our fees are reasonable. Our only profits are standard real estate commissions and a small management fee on rehabs in our investment properties.

When we sell the investor a property, we earn a standard real estate commission of 3%. The house usually is under contract (we don’t own it), so it has not been marked up to make us a profit on the front end. When we facilitate the sale of the house to an owner finance buyer, we also earn a 3% commission.

Also, our construction company will perform your rehab of $5000-$20,000 done in less than 21 days in most cases. There is a project management fee of 10%.

Closing Costs

Closing costs on these houses are approximately 3-4%% of the wholesale price, and of the final price on the owner finance resale. On the latter, the closing costs normally are paid out of the buyer’s down payment.

Foreclosures

Vacancies are part of the rental property business, as are repairs and damages by tenants. And in owner finance, foreclosures are part of the business (but repairs and damages expenses are not).

Foreclosures are rare but they do happen. In five years, we may get 10-20% of our houses back. Total foreclosure costs are $1000 to $1500. The house is vacated in 60 days or less and resold. You also get $5000 down again. Foreclosures are usually quite profitable for the investor. We have a real estate attorney available to handle this for you if it ever occurs. We will help you to find a new buyer.

Below are completed projects that are now generating positive cash flow for our investors. Wholesale and end buyer prices are supported by sold and rental comps (available upon request). For new, available projects, please visit our new website, www.TexasCashFlow.com, or contact Joseph Pickett (210) 816-4280, jmpickett@gmail.com.

Buy and Hold – 604 West Hollywood, San Antonio TX 78212

This distressed sale property was done in March 2014, and is a two bedroom, one bath affordable home located in a hot area north of downtown San Antonio called Beacon Hill. It is 900 square feet, on .15 of an acre built in 1945. It was an estate sale, and as the original photos show below, it was in rough shape. The house was not rehabbed, and was resold with owner financing to a blue collar worker with two good jobs.

Before Buyer Rehab:

Wholesale Price: $51,000 cash
Rehab cost: Zero
Owner Finance Price: $80,000
Down Payment: $5,000
DOM: 60
Monthly Payment: $806
ROI: 12%

After Buyer Rehab:

Buy and Hold – 1629 Santa Anna St., San Antonio TX 78201

This property investment was completed in spring 2015. It also is located north of downtown in an in demand, revitalizing area, only about 10 easy minutes from downtown. It is a three bedroom, 1.5 bath (the extra half bath is unusual in this price range), 1074 square feet, built in 1946, hot Los Angeles Heights subdivision. The house had $10,000 of rehab completed in three weeks: paint in and out, flooring, minor foundation repair. It was resold with owner financing to a two income family.

Wholesale Price: $62,000
Rehab Cost: $10,000
Owner Finance Price: $89,900
Down Payment: $5,000
DOM: 45
Monthly Payment: $937
ROI: 10%

Before Rehab:

After Rehab:

Buy and Hold – 1622 Alametos, San Antonio TX 78201

This positive cash flow fixer upper home was completed in September 2015. It is a lovely home centrally located north of downtown, near I-10, with brand new roof and granite counter tops. It was a two bedroom, one bath, which was converted by our team into a three bedroom. It has .14 acres, built in 1947, 966 square feet, Los Angeles Heights subdivision, a hot area. It had $10,000 of rehab completed in three weeks: central heat and air, carpet removed, interior paint, light fixtures, front bedroom leveled, third bedroom conversion. It was sold with owner financing to a teacher with a steady job.

Wholesale Price: $65,000 cash
Rehab Cost: $10,000
Owner Finance Price: $99,900
Down Payment: $5000
DOM: 7
Monthly Payment: $1041
ROI: 11%

Before Rehab:

After Rehab:

Buy and Hold – 3711 Southport Drive, San Antonio TX 78223

This distressed property sale was completed in fall 2014. This three bedroom, one bath affordable home has a one car garage, .15 acres, and was built in 1957. It is located on the south side of San Antonio, which is rapidly growing and being revitalized. Central air was added, inside paint, and kitchen and bath rehabbed. It was owner financed to a working family.

Wholesale Price: $49,500 cash
Rehab Cost: $11,000
Owner Finance Price: $89,900
Down Payment: $5,000
DOM: 120
Monthly Payment: $895
ROI: 10%

Before Rehab:

After Rehab:

Flip – 503 Lovera Blvd., San Antonio TX 78212

This positive cash flow property investment was completed in June 2015. It is a three bedroom, one bath north of downtown in a very in demand area. It was built in 1951 and was completely rehabbed. Rehab included paint in and out, kitchen granite, electric fixtures, new flooring, new deck, bathroom upgrades, old deck removal, concrete stain, new sod and deck stain. It was sold retail.

Wholesale Price: $72,000 Cash
Rehab Cost: $18,000
Retail Price: $125,000
Down Payment: $25,000
DOM: 120
Investor Profit: $15,000

Before Rehab:

After Rehab:

Note: The following two projects are our more value-priced deals under $40,000 wholesale. They may not appear to be houses that will sell quickly, given the limited rehab. But these houses do sell and produce good cash flow in 90 days or less.

Houses with affordably payments under $600 such as these are in demand in our areas, regardless of how they may look personally to the investor. The house payment is comparable to area rents. These houses are great opportunities for lower income, blue collar contractors to own a home affordably and repair it themselves.

Buy and Hold – 415 Frio City Rd., San Antonio TX 78207

This distressed sale was completed in October 2015. It is a small two bedroom, one bath west of downtown in a revitalizing area. It has 648 square feet, built 1950, only a few minutes from the San Antonio Riverwalk. This is one of our lower priced homes that had minimal repairs: paint, touched up flooring, cleaned. This is a good example of how we do not over rehab a home. This area is in less demand and has a lower income than areas, say, north of downtown. So less rehab is required. It is a good value investment, and the new owners are delighted with their first home.

Wholesale Price: $35,000 cash Rehab Cost: $1000 Owner
Finance Price: $54,000
Down Payment: $5,000
DOM: 45
Monthly Payment: $550
ROI: 11%

Pictures: Simple Clean Out, Minor Touch Ups Only

Buy and Hold – 1219 Perez, San Antonio TX 78207

This distressed property sale was completed in June 2015. This is a three bedroom, one bath house of 950 square feet located at the end of a quiet street near an elementary school, west of downtown. It is approximately three miles from the Riverwalk and Alamo. This house also is a good example of a lower cost house in a lower cost area but one that is still rising. This house did not require high quality finish work to resell it, such as granite and tile and flooring. Instead, the rehab budget of $10,000 was spent on leveling the foundation, inside and outside paint, painting the floor (rather than adding new flooring), finishing the plumbing and clearing trash.

Wholesale Price: $30,000 cash
Rehab Cost: $10,000
Owner Finance Price: $55,000
Down Payment: $3000
DOM: 90
Monthly Payment: $550
ROI: 11%

Pictures:

Flip – 650 Canyon Springs Drive, Canyon Lake TX 78133

This investment in property was completed in August 2015. It is a two bed room, one bath manufactured home just a few minutes from Canyon Lake, 1114 square feet and built in 1979. It is about 30 miles north of San Antonio.
The home was purchased by a team of rehabbers in San Antonio. They fixed up the house per our recommendations and flipped it for a very nice profit. They upgraded kitchen, HVAC, painted in and out, upgraded floors and bathroom, added new appliances, repaired deck and added new windows.

Wholesale Price: $50,000 cash
Rehab Cost: $25,000
Resale Price: $99,970
Total Profit: $18,000
DOM: 160

Before Rehab:

After Rehab:

For current fixer upper homes and cash investor references, kindly contact Joseph Pickett (210) 816-4280, or use our Contact Us form. www.TexasCashFlow.com.

Remember, these San Antonio investment properties offer real estate cash flow of 10-15% per year without repairs or maintenance, once the rehab is completed. They are an ideal out of state investment property, especially for people used to buying California investment property and other states investment properties that are sold at over market value.

February 8, 2016February 10, 2016

How I Generate $30,000+ Per Month in Real Estate Cash Flow

I have been investing in under market value properties in San Antonio TX for more than 15 years. Unlike many real estate investors, I did not start off with much cash, nor did I have a rich aunt who would loan me money at 8%.

After I finished college, I tried to buy Boston investment property, Seattle investment property and San Francisco investment property, among others, but it was too expensive.

So I returned to Texas and started to invest in below market value properties that cost $20,000 to $30,000. I was amazed when I discovered San Antonio TX, and how one could generate substantial real estate cash flow each month on such inexpensive distressed properties.

I did make some money in the stock market, so in 2001, I was able to purchased my first under market value Texas property for only $30,000 cash. After I spend $5000 on rehab, I then made real estate cash flow of $600 per month on it as I rented it out. That was my first San Antonio investment property.

After that first under market value investment property, I didn’t have much capital left. So, I had to hunt for private money to borrow. It took a lot of phone calls, but I eventually tracked down an investor allowed me to borrow more than $1.5 million over three years to rehab and rent out under market value properties.

I would borrow $30,000 to $50,000 from my investor every few months to do a new deal, and I made about 10% in real estate cash flow on those deals.

After about five years, I was doing very well and had more than $10,000 per month in real estate cash flow, but I was getting weary of doing full rehabs and maintaining properties. That is when I started to use my current under market value investment model:

I buy $30,000 to $60,000 below market value San Antonio investment property for cash.
I do $10,000 to $30,000 in rehab (sometimes I will not repair the house at all).
I resell the property to a blue collar worker with a $5000 down payment and a steady job.
Typical terms on the below market value property are $5000 down, $800 per month PITI, $79,900 final price, 10% interest.

Investing in this way gives me real estate cash flow of 12% per year or more without doing the typical landlord repairs that most investors deal with.

I also give my end buyers the opportunity to own their own home. This type of investing has been my main method for almost 10 years. It is by buying under market value properties for cash in this way, and then owner financing them, that i have been able to generate more than $30,000 per month in real estate cash flow.

To give you a good example of how I do these types of under market value deals with San Antonio investment property, here is a great case study we just completed:

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.

Below are the after rehab pics:

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, $850 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 16% 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.

This type of property is great for real estate cash flow, and is far superior to what is available to most investors looking for Seattle investment property or San Francisco investment property. That’s probably why most of my out of state investors are from Seattle and San Francisco! I also have many former buyers of California investment property generally who only buy my San Antonio investment property now.

February 6, 2016February 16, 2016

A $25,000 ‘Junk House’ Case Study – 15% ROI for Out of State Investor

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:

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!

February 5, 2016February 10, 2016

Why It Is So Hard to Find Affordable San Francisco Investment Property?

Many of my out of state property investors come to San Antonio TX from San Francisco. They find it is very difficult to find affordable San Francisco investment property that will produce passive cash flow.

According to Forbes, 2016 is an excellent time to pick up under market value properties for cash flow in many undervalued markets. One of the most undervalued investor markets is San Antonio, which comes in at #6 on their list with a median price of only $189,000. It also is rated as their #4 boom town.

sa2 — San Antonio is a much more affordable place than San Francisco to buy under market value properties.

San Antonio is where I have bought hundreds of under market value properties since 2000. I have made millions of dollars off of below market value, $50,000 houses that many investors would laugh at.

It’s much easier to make real estate cash flow on investment properties in the undervalued market of San Antonio. It is IMHO one of the best cities to invest in real estate given its growing population, affordable real estate, low taxes, and strong economy.

San Francisco Investment Property Hugely Overvalued = No Cash Flow

Meanwhile, San Francisco houses and San Francisco investment property is among the most overvalued in the US, according to Forbes. That magazine states that five of the most overvalued investment property markets are in California: San Francisco, San Diego, San Jose, and Los Angeles.

What is driving the lack of affordable investment property in San Francisco? There simply is not enough supply of market value properties for home buyers, which means that California investment property is just too expensive to produce real estate cash flow.

One of the reasons for that, Forbes says, is that many Chinese buyers have come into San Francisco and bought up San Francisco investment properties, paying full cash offers.

Another source says that San Francisco price to rent and price to income ratios have gone up by 25% from 2012 until 2015. The median price for a San Francisco house is $548,000 and is up 24% from a year ago.

In fact, San Francisco investment property houses are getting near to levels that were during the bubble years of 2006 and 2007. That was when prices in San Francisco were near $665,000.

I do not know how San Francisco investment property buyers can survive in that market, or California investment property generally. If you buy for appreciation, maybe you can do well, but that is far too risky for me.

I am an under market value, buy and hold, real estate cash flow investor.

A Good Example of Under Market Value, Cash Flow Property

Like I said earlier, I buy and sell under market value properties that many wealthy investors laugh at.

For example, this below market value San Antonio investment property was sold to my investor for only $25,000:

No one wanted this ‘junk house.’ I did! I saw the $100,000 houses next door lived in by the owners, and all of the revitalization going on in this area of San Antonio on the near west side.

Many out of state investment property buyers looking for real estate cash flow would never buy this house. My investor did for $25k, and then I did $27k in rehab:

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

The ARV on this below market value property is $79,900. We just finished the rehab in the middle of January 2016. And guess what? By early February, we already had an owner finance buyer for it: $5000 down, $850 per month, $79,000 final price, 10% interest, 30 year note.

That is what you can do with investment properties in an under valued market here with San Antonio investment property. Anyone who buys San Francisco investment property or Los Angeles investment property or Seattle investment property will never see these types of returns or prices.

February 5, 2016February 10, 2016

Looking for Real Estate Cash Flow in Under Market Value Property in Seattle? Good Luck!

Many home buyers and under market value property investors in the Seattle WA area have been looking for the last couple of years for affordable homes not too far away from downtown. But Seattle real estate is out of reach for many investors.

I have been reading that it is very tough going. According to Redfin’s Real Time Housing Market Tracker, it is very difficult to find under market value investment property in and around Seattle. In fact, you will have a hard time buying anything under market value within 50 miles of the city.

Redfin reported last year that Seattle actually pulled even with housing-starved San Francisco for the first time in history. Also, Seattle was reported to have the lowest home inventory ever, making it hard to find affordable Seattle investment property.

The nationwide view for housing generally was better in 2015, with prices going up an average of 10% overall. Only 18% of houses were sold above market value around the US.

But in Seattle….ouch. Last March, the median sales price in Seattle was $380,000. This was an 11% rise from the year before. The Seattle cash buyer does not know where to go for cash flow!

If you are an under market property Seattle investor, you are going to have a very difficult time producing passive cash flow a Seattle investment property.

Welcome To Texas, New Seattle Out of State Investment Property Investors!

I sold this ‘junk’ house for $25k, rehabbed it for 27k, and resold it for a 12% ROI for the investor in just one month. It sold for $89,900.

This year, I have actually picked up two near out of state property investors from the Seattle area looking for real estate cash flow. As it turns out, both of them were having an impossible time finding affordable properties that could generate cash flow.

As is often the case, these out of state investors have good jobs that make them $200,000 or more per year, but they must work 50 hours or more per week, and travel for 1/4 of the year or more. They want passive cash flow on below market value property, and that is what I do in San Antonio TX.

Usually, when a new investor comes in from out of state, such as California or Washington, I will put them into a nicer under market value property in a hot area. North of downtown San Antonio in 78201 is especially hot. Lots of young professionals are moving in there as it is so near downtown and all of the nightlife and tourist activities.

In many cases, I resell these below market value houses after rehab of 10-25k in days or weeks for 12%+ real estate cash flow. Here’s a great San Antonio investment property:

Address: 2229 W Hermosa Dr. San Antonio, TX 78201
Year Built: 1948
Description: Under market value property sale in hot north of downtown neighborhood, 2 beds 1 bath, 769 sqft, built: 1948, lot size: .14 acres yearly taxes: $1,200.00, estimated yearly insurance: $800.00, estimated repairs on this distressed sale: 35K, includes new HVAC, converting to 3 BR, updated kitchen, flooring, paint in/out, exterior skirt, roof, room addition, appliances, paint out door storage exterior, trash, lawn maintenance.
Max After Repair Value: $129,000.00 with owner financing, comps are for 3/1.
Cash Price: $69,900 firm.
Exit Strategy: Owner finance this out of state investment property with positive cash flow with $35,000 in repairs, $1295 per month, 10% interest rate, $5000 down, 30 year note. Or, do $15k rehab – HVAC, paint in and out, flooring, resell for $105,000, $1050 per month.

These San Antonio investment properties are reselling fast right now; in fact, I just rehabbed and resold this under market value house in a few weeks after rehab was done.

February 3, 2016February 7, 2016

A $25,000 “Junk” Under Market Value House Success Story in San Antonio

I have made my real estate investing career in buying and selling under market value properties in San Antonio TX that most investors are afraid of.

The under market value properties for real estate cash flow that I buy are scary looking, but you just have 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:

Yet this under market value house sat for months and no investor wanted it. I grabbed it and now my investor has excellent real estate cash flow.

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 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 $20,000 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

Below are the after rehab pics:

The ARV on this below market value property is $65,000. We just finished the rehab in the middle of January 2016. And guess what? By early February, we already had an owner finance buyer for it: $5000 down, $650 per month, $65,000 final price, 10% interest, 30 year note.

The house was on the market for less than a month. So on a $45,000 investment, the out of state property investor will earn about 12% 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 with steady, no maintenance real estate cash flow.

January 30, 2016February 16, 2016

How $29,900 ‘Junk,’ Under Market Value Properties Can Make You Wealthy

I buy and sell wholesale properties in San Antonio TX every week that most investors say I should have just torn down. ‘Why would anybody buy an out of state investment property that looks like THAT?’

LOL! I have made millions of dollars in my 15 year, under market value property investing career, and most of it was on cheap, ‘junk’ houses selling for well below market value. Ugly houses that typical investors run screaming from.

I own dozens of previously ‘junk’ houses that I bought under market value that looked very rough, such as the distressed property you see below for real estate cash flow.

Take a hard look at that photo. Does that photo make you want to run away and hide? If so, sorry, but you are making a serious mistake. You can purchase under market value properties just like that one for $29,900. Then, you do not rent it.

No. Instead, you owner finance it to a blue collar, hard working buyer that we qualify for you. As long as the buyer can prove they are working steadily and have $5000 down payment, they can buy this house.

Here is where it gets even better for the below market value property investor: You can often sell a house such as the one below AS IS to an owner finance buyer. You might spend $1000 or $2000 to clean it up, but other than that, you often can sell the house as is.

Front — I just sold this house with NO REPAIRS with owner financing in Jan. 2016, $500 per month, $5000 down.

So, if you buy ‘junk’ houses such as the one below for $29,900 and do no repairs, and then owner finance it for about $49,900, $500 per month. You can enjoy at least 12% ROI and never do any repairs! Not bad for excellent real estate cash flow.

Or, do $30k in rehab and resell it for $5000 down, $895 per month, $89,900 final price.

Either way, you are making an outstanding rate of return on an under market value investment property that most investors foolishly avoid.

If you want to get really wealthy with an out of state investment property, buy a dozen or more of these little, ‘junk’ distressed, San Antonio investment properties and owner finance them as I did. You will get $500 to $600 per month on each if you do no repairs, or $800 to $900 per month if you do the rehab. It’s up to you!

Address: 228 Yucca, San Antonio, Texas 78207
Year Built: 1950
Description: Booming San Antonio Market, very popular location west of downtown, this is a 2/1 that has a lot of potential, perfect for a young family. This is a great location and wholesale property, only a few minutes west of downtown and the Riverwalk. Property sits on a beautiful large lot, plenty of room for growth or a wonderful playground and garden.
Max After Repair Value: $89,900
Cash Price: $29,900 firm.
Exit Strategy: Owner Finance with 35K repairs: 5-10k down, $895 monthly P/I, or owner finance as is, $500 per month, 30 year amortization, 10% interest, Price: 89.9K, can sell note after 1 year; or rent: $900 monthly with 38K in repairs.
Notes: We recommend that you owner finance this house because you will have no maintenance expenses.

The majority of my buyers for real estate cash flow are former buyers of California investment property, San Francisco investment property, Los Angeles investment property and San Diego investment property. San Antonio investment properties are hard to beat for cash flow and low cost, especially when you do not have to do maintenance on them.

But remember, this is seller financed property, not a rental property.

January 29, 2016February 7, 2016

Should I Buy An Out of State Investment Property?

If you are a real estate investor in California or another high-cost area, you probably are considering an out-of-state investment property. In the costly cities of San Francisco and Los Angeles, many real estate investors are priced out of the market.

This recent graphic of San Francisco housing prices tells the tale:

Investing in a market like that is brutal unless your closets are full of cash. Here in Texas, I have been blessed to build a big portfolio of under market value investment properties that are very low priced.

If you are ever considering an out-of-state investment property purchase, below are some pointers:

How to choose your out-of-state market

The best locales to invest in under market value properties depends on what you want to achieve. Do you want to flip for quick cash or buy and hold long term? I always want long term real estate cash flow.

Also, I favor investing in under market value, buy-and-hold properties — usually with seller financing. Long-term cash flow is, in my opinion, the best vehicle for massive wealth accumulation.

Anyway, note that a good buy-and-hold market might not be so great for flipping. In my home market of San Antonio, flipping is getting harder as prices rise.

Many flippers I know are starved of under market value deals that can turn them a decent profit. On the other hand, buy-and-hold investors like me are doing well; 10 to 12 percent ROI is still routine for my portfolio.

As you mull where to purchase your out-of-state investment property, consider these points:

State laws: Is your potential out-of-state market friendly to under market value property owners? I advise you to invest only in states that have landlord and owner-friendly laws. I want to be able to evict non-paying tenants and foreclose easily on defaulting buyers. Texas is property owner-friendly.
Population and economic trends: Is the state growing or shrinking in population? How is the job market? As an example, according to CNN Money, Texas is seeing rapid population growth and a strong job market. Forbes stated in a Jan. 14 article that four of its 53 boomtowns are in Texas: San Antonio, Houston, Austin and Dallas. A state with strong population and job growth will have plenty of renters and buyers needing houses.
Price-to-rent ratios: What does it cost to rent a house compared to buying one? CNN has a helpful graph on price-to-rent ratios. San Francisco and Honolulu have the highest ratios — over 30 — while Detroit is lowest at around 10. Generally, I recommend buying in a market with a moderate price-to-rent ratio.

This is not an exhaustive list of considerations for buying out-of-state investment properties. However, if those three points look solid, odds are you will produce positive cash flow in that area.

How to locate a good out-of-state investment property

If you have a good idea of your best city to invest in, how do you know which under market value property to buy? Most investors go one of two routes:

Find a great real estate agent or investor who knows how to scout for good under market value properties and wholesale property. Hopefully, he or she will network with top-notch property inspectors, rehabbers, title companies and a real estate attorneys.
Find a reliable turnkey property company. These under market value properties have been 100 percent rehabbed and often have tenants already in place.

Which route do you choose? It depends. Many out-of-state property investors want zero headaches or stress and don’t want wholesale property. So they purchase turnkey properties.

Other investors want to save money, so they find their own under market value properties and coordinate their own rehabs and property management.

If you handle your own investment properties out of state, consider:

Upsides

You get the house cheap
High ROI
You control rehab costs

Downsides

The house has zero cash flow during your rehab and time to find the occupant
Rehab costs might skyrocket if your partners on site are not top tier
It’s difficult to manage rehab from 1,000 miles away
Material costs can increase when you do one rehab at a time

If you buy turnkey, consider:

Upsides

There’s no rehab to worry about
An occupant is in place
There’s no muss or fuss on your part
Material costs are standardized
The quality of work is there for you to see from the start
The entire investment team is in place

Downsides

Higher upfront cost
Lower ROI

How much is the difference between buying an under market value property yourself or a turnkey property? In my experience, I can do the rehab on a distressed property for half of what a typical rehab crew will charge.

That can make a difference of 2 to 3 percent in ROI per year. That adds up over time. However, I’m a full-time investor with a construction company. My rehabs cost less because I do 100 per year. You might not be able to do that, so a turnkey might make more sense.

For the beginner, I might lean toward buying solid turnkey company in a low-cost market as a first out-of-state investment property. That will help you dip your feet into the investing waters with some positive cash flow, then you can grow into building your own under market value investment team. Above all else, look for solid real estate cash flow from your distressed properties to get the best start in real estate.

January 29, 2016January 29, 2016

Forbes: San Antonio TX Is #3 Best City to Invest in Real Estate, Beating Austin TX!

According to a recent survey by Forbes magazine, San Antonio TX is one of the best cities to invest in real estate. According to Forbes, San Antonio has all of the features of a good city to invest in real estate, or to buy a home to live in:

Strong job growth
Strong growth in population
Home price appreciation

San Antonio also is still considered to be under valued. Forbes stated that Texas has three cities on the list. Note that the average home price in San Antonio is only $201,000. Of course, the under market value properties that I buy are usually from $25,000 to $70,000.

Also, the cities in Texas that get more play than San Antonio – Dallas and Austin – are #6 and #7 on the list respectively, with much higher housing prices. Austin’s average home price is a high $281,000, which makes it not as good a city to invest in real estate. I avoided investing in Austin years ago and found San Antonio much more affordable with good cash flow.

One of the big benefits of investing in under market value property in San Antonio TX as an out of state property investor is that this area does not experience major booms and busts like other cities. The last recession hit much of the country hard, but the downturn here was quite shallow. Texas has rebounded strongly in the last five years, and most of the jobs created in the US have been in TX.

The energy boom with higher oil prices helped to fuel San Antonio growth, but even with cheap oil now, San Antonio still is doing well as we have a very diverse economy. San Antonio is home to many financial firms and data centers, Forbes adds. And, the year over year job growth in San Antonio is higher than Austin 3.7% vs. 3.3%.

Forbes thinks that Texas will be a good place to invest for years for out of state property investors , especially San Antonio, until houses are over market value. However, I always buy my investment properties under market value, and I see no sign that this is going to change.

What kind of under market value property do I buy? Here’s a great example:

Address: 1609 W Travis St, San Antonio, Texas 78207
Year Built: 1950
Description: Booming San Antonio Market out of state investment property, very popular location west of downtown, 1609 W Travis St, San Antonio, Texas 78207-3567, 3 beds, 1 bath, 1100 sqft, estimated repairs: 38K, includes paint in/out, new HVAC, flooring, foundation, update kitchen/bath, etc.
Max After Repair Value: $89,900
Cash Price: $35,000 firm.
Exit Strategy: Owner Finance with 35K repairs: 5-10k down, $895 monthly P/I, 30 year amortization, 10% interest, Price: 89.9K, can sell note after 1 year; or rent: $900 monthly with 38K in repairs.
Notes: We recommend that you owner finance this out of state investment property because you will have no maintenance expenses. ROI will be ~10%.
Contact us for more information or to make offer.
Sold and Rental Comps: Rental Comps 1609 W Travis Sold Comps 1609 W Travis St

This type of under market value property in San Antonio is exactly what helped me to financially retire at 28 years old. It really is the best city to invest in real estate.

January 28, 2016January 31, 2016

How $20,000 ‘Junk’ Under Market Value Properties Make Me Rich

Many under market value real estate investors cannot believe that I have become very wealthy by buying and selling below market value ‘junk’ houses for $20,000 or $30,000. The fact is, I have bought and sold hundreds of these distressed properties in the last 15 years in San Antonio TX.

There always is very strong demand for these little, profitable under market value houses. We have so many blue collar, Hispanic workers here who have rented forever and want to buy a house but do not have credit. I consider it a great opportunity to work with these people so that they can buy their own house.

Just because the house is unattractive to you or I does not mean it does not hold value for some buyers. Most of my under market value buyers are contractors, and they can repair the house and turn it into a very livable little home. These are great little houses for the out of state investment property investor. Note that the house is always sold at fair market value, never above fair market value.

For example, the house below was said by some people to be worthy of a tear down. They are not wise investors; I have been criticized on ‘investor websites’ such as Bigger Pockets for this type of investing. Frankly, they are fools – conventional thinking, 20% down, rental property investors.

I have made a few million dollars off of these ‘junk’ owner finance properties that many so-called ‘investors’ overlook, and provide a house for a hard working person to live in. But note – investing in under market value properties and owner financing them takes cash. It’s an advanced investing system for out of state property investors with cash.

Most of my blue collar worker buyers had rented for years, and some of them had truly ‘slumlord’ type landlords; I’ve heard the stories from my buyers. Buying a house via owner financing such as this can be a better option for some workers, as long as the house is priced at fair market value.

Here are the details:

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 out of state investment property 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 (legal in TX – sorry Bigger Pockets!)
No prepayment penalty
No balloon
Final price: $39,900 (FMV)
ROI: 12%

Note: The final price for the owner finance buyer is FMV and DOES NOT constitute ‘predatory lending,’ which is illegal per Dodd Frank regulations. Sold comps in the neighborhood on properties of similar size, age and condition are approximately $39,900 to $49,900 – if elec and water work and roof is not leaking.

A CMA was run on similar houses within a two mile radius. Max value in that area for similar houses is $99,900 for an immaculate property that has been updated.

More photos of this below market value property:

It has been occupied by a blue collar, owner finance buyer for a year, and I know that many repairs have been made to it. All the while, it has returned 12% ROI of passive income to the investor.

Buying and selling these little ‘junk’ under market value properties has been very good to me, and can be for you, too. You also can buy nicer homes here in San Antonio and do the same thing, if this type of property is not your cup of tea – such as this under market value property.