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.

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.

Converting Investors’ Rentals to Owner Finance Was the Best Decision Ever

Before the market crash, two of our biggest investors owned more than 100 rental properties. Like many investors, they once thought that owning rental properties was the only way to make money in real estate investing.

What they found was that they were often dealing with repair problems.  It didn’t matter that they had property managers. When you own 100 houses, you always have to deal with a repair, a late bill, a vacancy, paperwork and so on.

They also found it was hard to know what their cash flow on each house was each month. Writing checks for new water heaters and fridges gets old fast!

It was around 2009 that one of our investors’ mentors talked to them about switching to owner finance so they could retire with millions in real estate. That mentor only did owner finance homes.

Rather than being a landlord responsible for property upkeep and repairs, there are more efficient ways to generate monthly cash flow.

Be the Bank!

Think about your own house. Each month you send an electronic payment (or check) to your mortgage company or bank. Your bank doesn’t have to maintain the property – you do. Since you are buying the property from the bank on terms, it is natural to your benefit to maintain the property. The bank knows that statistically, homeowners are much more likely to keep their houses in good repair than renters. That’s what makes holding mortgage notes so attractive.

Our mentor taught our investors they could be the bank for people who do not have the credit history to qualify for a regular mortgage loan. The investor carries the loan on the distressed property for 30 years just like the bank, and the new owner of the house simply pays a mortgage payment each month that includes taxes and insurance.

The mentor said to our investors –  why should you spend $10s of thousands on rehabbing a property when you can have the end buyer do most of it? Owner finance investment property is smart.

The end buyer usually has a vested interest in maintaining their property, as they own it.

How a Typical Owner Finance Property Deal Looks:

$62,000 cash purchase, $10,000 rehab, 50 DOM, sold for $89,900 owner finance, $937 per month, 12.3% ROI.

This 3 BR 1.5 bath property investment with positive cash flow north of downtown San Antonio TX is in a heavily revitalizing area. It was bought by the investor for $62,000.

The under-market value property only needed approximately $10,000 of rehab, including new flooring, paint in and out, and minor foundation work.

The total project cost to the investor for this under-market value property was $72,000.

Within 50 days of the completion of rehab, it was sold with owner financing with the following terms:

  • $5000 down
  • $89,900 final price
  • 10% interest
  • 30 year note
  • $937/month PITI positive cash flow
  • Cap rate 12.3%

After our investors converted most of their under-market value properties to owner finance, most of of their worries about properties disappeared. The owner maintains it and the investors simply enjoy the monthly cash flow from each property into their bank accounts.

Most people don’t seem to ever consider owner financing their property investment, probably because they don’t know about it.

The keys to success in owner finance property are simple:

  • Carefully documenting the income of the potential buyer and verifying their work history
  • Follow the Dodd Frank law, which mandates that you must collect proof of their income and document their work history.
  • You can have a Texas licensed loan originator do this for you for a $750 or so fee (we have one on staff).

The bottom line on owner finance investment property is you enjoy cash flow without maintenance and the buyer enjoys buying their own home at last – a true win-win for everyone.

How Our Investors Buy Investment Properties in Texas Below Market Value

The most important factor in our big investors’ success in buying the best San Antonio investment property is every house they buy is under market value. That is, they buy under market investment properties that need rehab.

How To Determine Market Value

One of the biggest reasons many investors we have become real estate agents is so they can determine market value of the best below market value San Antonio investment property on their own. It is never a good idea to use Zillow to determine market value of a property. Zillow is notoriously off base, especially when you are dealing with off market properties or an out of state investment property that are not in the MLS.

Also, bear carefully in mind that the value that you come up with will largely depend upon the repairs your under market value properties need. Our investors like buy properties that are at least 20% under market value. So if the house is worth $90,000 and needs $25,000 in rehab, buying the house at $115,000 is a waste of time and money. They want to buy that house for at least 20% under $90,000, or about $72,000, so they can make a good profit.

How Investors Buy Under Market Value Properties

There are several ways that our investors use to buy under market value properties in San Antonio TX, one of the best cities to invest in real estate:

  • Buying fair market sale houses: These are houses that are owned by a private person who has equity in the house and there is no bank involved. Most of these sellers are in no rush to sell, so this can be tough. But our investors have bought many under-market value properties in estate sales; that is where they find most of their deals. In many cases,  there are several children involved and they just want to be rid of the house that needs repair.
  • Buy off market properties: Given our investors’ level of success in real estate investing, they tend to find many good deals that are not in the MLS. Agents and investors in the business send our site and top investors below-market deals. Of course, you need to get experience in the business to work this way, but know that if you do become successful, good deals often find you. We currently are analyzing several below market value properties that we will post on this site soon.
  • Buy REOs under market value: These are Real Estate Owned properties, and these are houses that the banks have foreclosed on. REOs are usually in the MLS, and some of them will be repaired and some will not. Of course, REOs are tougher to find now and many of them need a lot of work. To make your offer more attractive, you may want to tell the seller you don’t need to do an inspection. Pay all cash if you can – cash is king!
  • However you buy your under-market value investment property or out-of-state investment property, do not spend too much money on the rehab. Rehabs are where many investors lose their rears. Spend too much on your rehab and you will never make any money. Our top investors own a construction company and are able to do rehabs for 50% less than most contractors on the best San Antonio investment properties.

That in short is how our investors buy below-market value properties in Texas. The big thing to remember is to stick to your guns on your numbers – if you need to buy that house 20% under market value to make money, don’t go over it. Move on to the next under-market value property deal if you have to – there are lots of them out there!

SOLD – 1503 San Rafael St, San Antonio, TX 78214

Address: 1503  San Rafael St, San Antonio, TX 78214

Description: Increase your cash flow with this under market value property in San Antonio, almost adorable cottage, magnificent large back yard, needs major help (conversation to a 3 beds 2 bath) in the flourishing San Antonio Market, 1503 San Rafael St., San Antonio, TX 78214, 2 beds, 1 bath, 912 sqft, lot size: .19 acres, estimated repairs: 50K, clean/lawn maintenance/interior paint/exterior paint, foundation, flooring, plumbing/electrical up to code, tile in bathroom floor, roof. Max After Repair Value: 149K

Price: $49,000 cash

Exit Strategy: Buy, rehab and rent  this San Antonio investment property for $850 per month

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SOLD – 4547 Guadalajara Dr. San Antonio, TX 78233

 

Address: 4547 Guadalajara Dr. San Antonio, TX 78233

Description: Location Location!  Fully renovated, turnkey San Antonio investment property! Prime time area.  3 beds 2 bath, 1154 sqft, lot size: .14 acres, school district: North East ISD, central heat and cold air, new roof gas stove, tile floor.

Price: 139K. Rents $1395 per month.

Notes: Property will be rented, and there is a three-year warranty for plumbing and electrical work.

Contact us today to make an offer – 210 865 0742.

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Take Over a Hard Money Loan on an Investment Property and Save Big!

Investing in San Antonio real estate can be a great way to build wealth as it was for me. One of the challenges, when you are first starting out, is finding the capital to fund your investments of course. One of the ways that some investors get started is by using hard money.

A hard money loan is a bridge loan that is used for the short term to finance a property while you are doing renovations. A hard money loan in San Antonio is often used by house flippers who want to renovate the home and then sell it retail for a profit. But another strategy that some under market value property investors use is to use the hard money loan to renovate the home. Then, once the property is fixed, get a conventional investment property loan on the home and pay off the hard money loan. The property then can be rented out and you pay the loan from the rental proceeds. If you have done the deal right, you should be able to put away some money every month as your profits and save it over time to do more deals.

Hard money of course is expensive; you can expect to pay an interest rate of 12% to 16% in many cases, and you also have to pay an up front fee and a renewal fee every six months with many lenders. Ideally, you will want to have the property renovated in six months or less so you can either sell it or get a conventional loan and hold it as a rental property.

On a related note, sometimes if you look around, you can find a real estate investor who has a hard money loan on a property but does not have or does not want to spend the cash to renovate the property. In this case, you might be able to work out a deal with the real estate investor that can really save you a lot of money.

All you would need to do with this investment property would be to take over the hard money loan from the investor. In many situations, the investor may have bought the home at a much lower price than it is for sale for today. This can be a great way to get an under market value deal on a property.

For example, we have a San Antonio investment property below where the investor has a hard money loan on the home for about $58,000. That is way below market value. Homes have appreciated in San Antonio by at least 7% in the past year overall. This home on Alametos St. is for sale for $65,000, but if you take over the hard money loan, you have saved another $7000, plus the fees of taking out a new hard money loan. Then, you only need to spend the money on the rehab. What a great way to save a bundle on an investment property! Below is more information on this under market value deal.

Potential more than 40K in profit on this investment. 1614 Alametos, San Antonio, Texas 78201. Excellent location, just north of downtown with a short distance to the river walk and the new San Pedro creek river walk extension (multi-billion dollar inner city revitalization project). Properties in this location are expected to appreciate by more than 50% in value over the next two to three years.

1614 Alametos has a large back yard with shady trees. Currently, the property is set-up as 2 bedrooms and 1 bathroom with a large patio in the back of the house. To get the maximum value out of this property and location, another bedroom and bathroom should be added. Estimated repairs: $65K with purchase price: $65K. Max After Repair Value: $199K

Note: 1622 Alametos just down the street was sold to an investor in 2015 for $65,000. With $15,000 of rehab, the property was sold for $99,000 with owner financing for a 13% ROI. Home was sold within one week.

Price: $65,000

Exit Strategy: Buy, Rehab and Hold this San Antonio investment property.

San Antonio Housing Market Still Booming in September 2017

Home sales continue to climb in San Antonio and are staying on track for another strong, record-breaking year even though there are fewer homes available on the market.

In August, there were nearly 3,000 homes sold in San Antonio, for a 2.3% increase from 2016. The total number of homes sold for 2017 are 20,867, which is 4.3% above last year at this time. Experts believe that the market is going to break the previous record when almost 30,000 homes were sold in a year.

The median home price in San Antonio is up 3.1% in August to $218,400. This is the fourth highest median price ever in the San Antonio market. Local home prices are shooting higher as there is a shortage of construction workers and more housing demand caused by the growing population in San Antonio.

It is true that housing prices are going up in San Antonio. Still, we are finding plenty of under market value, San Antonio investment properties available for our investors’ portfolios. Blue collar workers flocking to San Antonio for jobs need houses to buy with owner financing or to rent, so our business is still doing well.

San Antonio generally is still a good place to invest in under market value, high ROI investment properties, even if prices are higher than 2010. The strong, growing population and low unemployment rate indicate that this is a growing, robust economy with little signs of slowing down.

We also are seeing more accredited and non-accredited investors with solo 401ks and self directed IRAs buying investment properties in San Antonio for their portfolios.  Below is a great under market value property that will see major appreciation in the next five years.

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Potential more than 40K in profit on this investment. 1614 Alametos, San Antonio, Texas 78201. Excellent location, just north of downtown with a short distance to the river walk and the new San Pedro creek river walk extension (multi-billion dollar inner city revitalization project).

Properties in this location are expected to appreciate by more than 50% in value over the next two to three years. 1614 Alametos has a large back yard with shady trees. Currently the property is set-up as 2 bedrooms and 1 bathroom with a large patio in the back of the house. To get the maximum value out of this property and location, another bedroom and bathroom should be added. Estimated repairs: $65K with purchase price: $69K. Max After Repair Value: $199K.

Note: 1622 Alametos just down the street was sold to an investor in 2015 for $65,000. With $15,000 of rehab, the property was sold for $99,000 with owner financing for a 13% ROI. Home was sold within one week.

Price: $69,000

Exit Strategy: Buy, Rehab and Hold this San Antonio investment property.

How an Investor Can Make 13% ROI in Their 401 or IRA Retirement Portfolio

Many people today are worried about saving enough money for retirement. If you are going to rely on the stock market to ensure that you can live comfortably in 10, 20 or 30 years, I understand why you may be nervous. While the historical returns of the stock market may be in the 8% range, there is no doubt that some years, the return is much less. If you are planning to retire in a few years and the market dives, you may find yourself not retiring at all.

We know someone who planned to retire in 2007 and live comfortably. After the market crashed, he had to go back to work for another five years.

The good news is that you can make a reliable 10% or even 15% ROI per year if you purchase under market value real estate investments. Many of our investors have made a fortune with San Antonio investment properties over the years.

A popular way to make money for retirement today is to invest in under market value real estate in San Antonio in a solo 401k or self directed IRA. These funds can grow tax deferred over time, and you can often make an excellent rate of return.

Even after you technically retire, you still can invest in under market value real estate and enjoy cash flow. It may not be tax deferred any more, but you can still enjoy positive cash flow. Meanwhile, your friends and relatives are living off their retirement savings accounts based upon the stock market, which frequently dwindle over time.

Below is a great example of what you can do with an under market value investment property with a solo 401k or self directed IRA.

new front
$65,000 cash price, $15,000 rehab, resold for $99,900 owner finance, $1041 per month, 7 DOM, 12.9% ROI.

Still, we have CA investors coming into our fine city and buying property investment homes and making 12-13% ROI annually, with no property maintenance.

This San Antonio investment property was purchased by a CA cash buyer in July 2015 at 1622 Alametos St. This house is in 78201, and is north of downtown. This region is seeing rapid growth and appreciation.

The bottom line on this property was with only $10,000 of rehab, it was sold with owner financing at $99,900 in only a week after it was rehabbed. Here are the numbers:

  • $1041 per month
  • 30 year note
  • 10% interest rate
  • $5000 down payment
  • $99,900 final price
  • $216/mo. taxes/insurance

The total return on this San Antonio investment property was 13% per year.  That money is being returned to the investor’s solo 401k account each month, and he will use that money to eventually invest in more San Antonio investment properties.

This is what you can do with investing in real estate properties from within a solo 401k or self-directed IRA. Whether you are an accredited investor or a non accredited investor, this can be a great financial move.

Homes in Southern California See Near All-Time Price Highs

Southern California home sales dropped 5% in May 2017, yet home prices have still hit a record high in that areas.

According to recent real estate research in California, approximately 8.5% fewer homes were sold in Los Angeles County since March 2017, but home prices are still at a near-record high average of $485,000. This is almost as high as the all-time high of $500,000 in 2007.

Southern California is hardly the only part of the state where real estate prices are testing the ability of workers, families and real estate investors to afford homes. Prices in May 2017 in California hit a record high in Orange County, California, and San Diego County, California.

Also, Forbes reports that the San Francisco, California area is seeing soaring median home prices. Around San Jose, Sunnyvale, and Santa Clara, the median home price topped $1 million in the first quarter of 2017. It was just $535,000 a year ago.

Why the Rise in Home Prices in California? 

The biggest reason this is happening is not enough homes are being built in much of California’s major metro areas to meet booming demand. This is because it is harder to get building permits in much of California.

On the other hand, Texas has a very liberal policy on building new homes. Both states feature cities with high job growth; San Francisco and Oakland added 356,000 new jobs in 2016, and in Dallas, there wee 413,000 new jobs added in the same period. But in San Francisco, only 20,400 new homes were built, and there were 120,000 new ones built in Dallas.

This difference in building permit policy has had various effects. Homeowners in Calfornia are enjoying huge increased in property values, which is great for them to pull out cash and invest in real estate. But for people who want to buy, it is extremely difficult to buy in current circumstances. Many home buyers and real estate investors are priced out of the market.

In areas such as San Antonio, Texas, prices only have doubled in the last 20 years or so, but many more people can afford to buy a home for themselves or for real estate investments.

As home prices in California have soared, we have seen increasing demand for under market value real estate investments in San Antonio. Investors want to see high-ROI investment opportunities in Texas. Many affordable homes are available in San Antonio for under $60,000 wholesale. With $20,000 in rehab, the home can be rented for $800 per month. That is the type of positive cash flow that many California real estate investors want to see.

 

San Antonio Investors Buying Up Properties At Rapid Pace

Out of state real estate investors recently bought up several multifamily complexes that are worth more than $150 million. This was one small part of a large surge in real estate investing in San Antonio.

Sherman Residential was the company that bought the 385 unit Pecos Flats apartment complex on the west side in early May.  Sherman decided to come back to the San Antonio market after it left during the down turn in 2007.

Sherman noted that it always like San Antonio for high ROI investment opportunities, but it believes San Antonio is an even better investment today. It stated that San Antonio now has a more diverse employment base and strong population and job growth.

Investment brokers in San Antonio agree; some say that its strong population and employment growth in a range of industries are attracting many more real estate investors.

Many real estate investors are choosing large markets with strong employment growth and relatively low cost of living because they are thought to be more steady and less subject to a boom/bust cycle.

Brokers say that San Antonio is viewed in many quarters as recession proof, and with plenty of economic diversity, this area is a good bet in both bull and bear real estate markets.

San Antonio’s real estate market has experienced strong growth for the last five years, but there are signs that it may be cooling a bit. This can be a good opportunity for under market value real estate investors to pick up deals.

In April 2017, 2427 homes were sold in the San Antonio metro area. This was a decline of 2.2% from a year ago. That was only the third month since early 2011 that sales went down. As of May 2017, 8592 homes were sold in the city, with 8408 sold at this time last year.

The median home price went up by 8.4% in 2017 to $215,000.

Overall, the San Antonio market is a great bet for under market value investors seeking high ROI investment opportunities in 2017. A strong but not explosive real estate market will lead to plenty of good opportunities for investors who know where to look,