San Antonio property wholesaler

May 28, 2016May 28, 2016

Why Some Investors Are Flipping in Austin and Buying and Holding in San Antonio

Forbes magazine recently had another one of its Best Real Estate Investing Cities list, and Texas did very well. Austin was listed as the #1 city to invest in, and San Antonio real estate investing came in at #3. Houston, Dallas and Ft. Worth also made the top 10 list.

Some real estate investors have been pulling out of the Austin market, however, due to the high costs of real estate there. Forbes magazine gives us a clue why: The gross metro product for that city grew 24% from 2011 until the end of 2015, but houses there appreciated by 34%.

Meanwhile, the average home price in Austin was $334,000 in 2015. So clearly real estate prices are seriously on the rise in Austin. That’s why many investors call me up and are looking for San Antonio investment properties. San Antonio real estate properties are much cheaper; you still can buy a good affordable fixer upper in San Antonio for $45k to $50k. And the average home price here is about $210,000.

Given how much cheaper houses are here, there is lots of interest in San Antonio investment properties. However, you should note that days on market is longer in San Antonio than Austin. So what some investors who are interested in flipping under market value properties are doing is doing a flip or two in Austin and then doing buy and hold in San Antonio.

As a San Antonio property wholesaler, I have flipped many properties in San Antonio TX over the years, but in this current market, we are seeing profits on our flips of $7k to $10k. And days on market can be 90 or 120 days. For that reason, I am not strongly seeking out fix and flip investors at this time. I will do them for the right property and right investor, especially if the investor has the cash to do 4-5 at once. That way, both of us can make a good profit. Also, if you are a patient investor, then a San Antonio flip can work well. Just do not expect a house to sell in 20 days like in Austin.

I think the flipping market will get better in San Antonio once the market slows down in the next year or two.

So I have some investors flipping in Austin, and once they have 100k or 200k, they buy and hold in San Antonio with one of our $50k San Antonio fixer uppers:

Address: 1723 W Ashby Pl San Antonio, TX 78201.
Year Built: 1925
Description: Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 50k in repairs to flip, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
Max After Repair Value: $125,000.00
Cash Price: $65,000.
Exit Strategy: Owner Finance with 35K repairs: 5-10k down or more, ~$1295.00 monthly P/I, 30 year amortization, 10% interest.
Or 15K rehab, new HVAC, paint in/out, kitchen/bath repairs, then FSBO at 105K, 10% interest, $1095 monthly PI/TI, 30 year amortization.
Alternate Exit Strategy: Flip with $50k in repairs. $8000 to $10000 profit.

I made the vast majority of my money in San Antonio real estate investing in buy and hold over the long term. Buy and hold in San Antonio is always a good deal because affordable homes seldom rise above 75k.

April 16, 2016

Should I Flip or Buy and Hold? Yes!

People often ask me as a top San Antonio property wholesaler if it is better to flip or buy and hold? My answer is an emphatic ‘yes!’ Of course, it is a complex question and which type of real estate investment strategy you are going to focus on right now depends upon many factors.

When I first started as a San Antonio investment property investor, I focused mostly of flipping San Antonio houses. There was a good reason for that: I didn’t have much money! I found $2 million worth of private money and flipped 50 houses in my first year.

Many real estate investors like to focus their careers on flipping properties because they can (in theory) get their profits quickly and have their money tied up for as little time as possible. Another benefit of flipping is that it does not have the property management and long term holding costs that buy and hold investments have.

However, I am of the strong opinion that flipping San Antonio properties should be a short-term tactical strategy…like what I did when I started my investing career. Flipping a bunch of San Antonio properties was a means to an end: so that I could buy and hold a large portfolio of rental and owner financed properties.

Flipping Is Getting Tougher in San Antonio

I talk every week to investors who simply want to flip houses all the time. Or, they want to flip 5-10 houses per year, make $10,000 each, and eventually get into buy and hold real estate.

That is a viable strategy…..sometimes. However, the San Antonio real estate market continues to go up in value in 2016, and finding under market value properties in the 50-100k range (let alone the 100k+ range) that can be flipped for significant profit ($5000 or more) is getting tough.

In fact, it is getting so tough that last week I turned away three potential investors with more than $100,000 each to invest. I do not like turning away investors with six figures to invest in San Antonio real estate, but they wanted to only do flips.

As I have pointed out, flipping is hard to do profitably in this rising market now. Also, material costs have risen significantly due to the stronger economy.

Be Flexible!

There is nothing wrong with flipping houses, just as there is nothing wrong with buying and holding real estate. My best advice to many real estate investors is this: Be flexible in your investing strategy!

Many real estate investors limit their profits and ultimate success because they get stuck on one type of investing strategy no matter the market.

Personally, I strongly believe in buy and hold long term for wealth creation, but I’ll do flips in the right market if they are profitable.

In my expert opinion, the current San Antonio real estate market is best for buying and holding real estate.

As the market here is changing, I am no longer recommending that people flip properties with me.

I am focusing mostly on buying and holding with owner finance, AND with section 8 rental property.

Why Section 8?

Section 8 gets a bad reputation in some quarters. I love Section 8! Consider:

You get a guaranteed electronic rental payment monthly
The rent is usually higher than market rates
The renter needs to take care of the house to keep their voucher each year
The GoSection8.com website makes marketing a breeze.

Naturally, I have to screen my section 8 renters carefully for work history, credit and criminal record, but I find that I can get a property rented in 4-8 weeks. Meanwhile investors can wait six months to flip a house and sell it retail.

Another benefit of buying and holding with section 8 is that you can buy the house cash, rehab it, get it occupied, and then cash out refinance the house and do another rental property. That’s a great deal!

Below is a great little under market value deal that needs only 11k in rehab, and then can be rented section 8:

Address: 820 South San Manuel St., San Antonio TX
Year Built: 1950
Description: Under market value investment property, three bedroom, one bath that has 928 square feet. Beautiful home with TWO exterior storage units – this is a MAJOR selling point for the end buyer; most buyers are blue collar contractors, and they need their tools to be completely secure.
Max After Repair Value: $99,000.
Cash Price: $65,000.
Exit Strategy: Owner finance this out of state investment property with positive cash flow with only $10,000 in repairs completed in 30 days – $99,000, $900 per month, $5000 down, 30 year note, 10% interest. This San Antonio investment property offers passive cash flow with no maintenance.
Alternative Exit Strategy: Buy at $65,000, remodel $11,000, rent $1095 per month.

March 8, 2016March 9, 2016

How I Earn Money in Real Estate Investing While Others Fail

I have been a San Antonio property wholesaler and investor for 15 years. No matter if the market is up or down, I always make money. In all those years, many investors have come and gone, and yet I am still making money as I always do.

What makes some investors succeed and others fail? Lots of things, but in my experience, I often succeed in investing in under market value San Antonio properties where others fail for a few big reasons:

#1 I Never Get Greedy

I cannot tell you how many times I have had this exact conversation with an ‘investor’:

Me – ‘Hi Mr. Investor! I have this $50,000 San Antonio wholesale property for sale. You should buy it, I’ll do $10,000 in rehab and then resell it for you with owner financing. You’ll make $650 per month and earn 12% per year. A great buy and hold.’

Investor – ‘12%? That sucks! I want 20%!’

Me – ‘Enjoy Detroit, ROI shopper. Bye.’

The purpose of this illustration is to point out that human greed prevents many investors from making money. Many investors always want to make a grand slam on 1 deal. They aren’t happy with with $650 per month on a buy and hold in strong economic market such as San Antonio. No, they want to make 20% however they can….even if it means buying in a really bad area. They want to make more on a single deal than is realistic.

Working in San Antonio in under market value properties offers many great advantages: It’s a booming market, population is growing, revitalization all over town, low unemployment, business friendly, and cheap real estate.

On the down side, because properties are less expensive, you are not going to make $500,000 on a deal like you will in San Francisco. But the ENTRY COSTS for San Antonio are so much cheaper! Take full advantage of that and do lots of small deals and make a bundle!

The way that I make up for that is by never getting greedy. I never turn up my nose at making $5000 or $8000 on a deal, or $650 a month on a buy and hold.

I do hundreds of small transactions per year, and that is how I managed to build $40k per month in real estate cash flow.

Don’t get greedy, investors. It will cost you.

#2 I Don’t Live in Yesterday’s Real Estate Market

Here’s another real life conversation I have had with many investors:

Me: ‘Hi Mr. Investor! This house here is $55,000 and you will make $19,000 on the flip.’

Investor: ‘$55,000!?! It was $44,000 18 months ago! What a rip off!’

Me: ‘See ya.’

Real estate markets change. Distressed properties in San Antonio are more expensive than three years ago. Many investors will look at a property that costs $55,000, one that they could make 13% on per year, and complain that the house was $40,000 in 2013. So what? Markets change! The property is still dirt cheap and you will still make a good return.

In this situation, here is what happens: I have the wholesale San Antonio property under contract. The investor passes on it. So, I buy it cash, I rehab it, and I owner finance it and make all the money. 🙂

Below is a great San Antonio wholesale property deal that if someone does not buy this month, I’ll buy it myself and I will make all the money.

Address: 820 South San Manuel St., San Antonio TX
Year Built: 1950
Description: Under market value investment property, three bedroom, one bath that has 928 square feet. Beautiful home with TWO exterior storage units – this is a MAJOR selling point for the end buyer; most buyers are blue collar contractors, and they need their tools to be completely secure.
Max After Repair Value: $89,000.
Cash Price: $59,000.
Exit Strategy: Owner finance this out of state investment property with positive cash flow with only $10,000 in repairs completed in 30 days – $900 per month, $5000 down, 30 year note, 10% interest. This San Antonio investment property offers passive cash flow with no maintenance.
Alternative Exit Strategy: $10,000 in repairs and flip/resell retail – maximum ARV is $89,000. Profit $15,000-$20,000.
Notes: We recommend that you owner finance this out of state investment property because you will have no maintenance expenses. ROI will be ~13.7%.

In short, don’t get greedy and don’t live in yesterday’s real estate market, out of state investment property investors!

March 3, 2016

San Antonio Investment Property Is Still Hot in 2016

Some investors might think that the San Antonio investment property market has slowed down given the decline in oil prices. But you would be wrong!

I am a San Antonio investment property wholesaler, and I am finding that sales are still strong, and prices are rising. The volume of houses that were sold in the city increased in January, and the cost to buy a house generally has gone up.

Total residential sales increased nearly 7% in January 2016 from a year ago, with a total of 1534 houses sold.

The median price of a house in San Antonio is still low – only $186,100 from $176,700 a year ago.

Overall, San Antonio is still a seller’s market, and inventory is low with demand high. I know personally I have sold 15 under market value properties in San Antonio since the beginning of the year. Investors who used to buy San Francisco investment property love to come to San Antonio and buy a distressed wholesale property for $50,000! And overall, the consumer market is still strong, with only a 3 month supply of houses available.

San Antonio’s strong investment property market is being driving by a strong economy, growing population and low interest rates. And it helps that you can still buy a single family home here for under $200,000.

I still am able to find really good under market value deals for out of state investment property investors, especially a few miles north of downtown in the 78201 zip code. Below is a great deal that I have several San Francisco investment property buyers reviewing:

Address: 1723 W Ashby Pl San Antonio, TX 78201,
Year Built: 1925
Description: Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 35K, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
Max After Repair Value: $129,000.00
Cash Price: $69,900 firm.
Exit Strategy: Owner Finance with 35K repairs: 5-10k down or more, $1,295.00 monthly P/I, 30 year amortization, 10% interest. Or 15K rehab, new HVAC, paint in/out, kitchen/bath repairs, plumbing/electric up to code, then FSBO at 109K, 10% interest, $1,100 monthly PI/TI, 30 year amortization.
Alternate Exit Strategy: Flip with $35k in repairs for a ~$25,000 profit. Rehab completed in 45 days or less.