Investor Opportunity – San Antonio Home Sales Are Projected to Surge in 2017

Experts say that San Antonio real estate sales will continue to increase this year. They also note that prices will continue to climb in the consumer home sale market as many local developers are not able to keep up with demand.

Some of the factors that are causing the increase in San Antonio real estate demand are local growth in jobs, very low mortgage rates at 4%, and increasing home values. It is likely that mortgage loans will continue to edge up but will continue to be low by historical standards.

Approximately 27,000 homes were sold in San Antonio in 2016, which is an 8.5% climb from 2015, and a huge 46.4% increase from 2012.

Local home prices in the San Antonio market increased in 2016 to $204,000, which was a 27% increase from a median home price of only $160,000 in 2012.

Owner Finance, Buy and Hold Investment Opportunities!

Given that there is such a strong demand for homes, as a San Antonio real estate investor, I am finding that there are plenty of investing opportunities for under market value properties.

This city has many people who want to buy a San Antonio home but do not have the credit or the down payment to get a conventional loan.

That’s why a major part of my San Antonio real estate investment business is selling homes with owner financing. The end buy has to have $5000 down, have a steady job, and show that they have the regular monthly income to pay the mortgage.

I prefer to owner finance my investment properties than rent them out. I usually only need to spend $5000 or so to fix up the property. Then I can owner finance the home to a family who can finish the repairs themselves.

Remember, there is great demand for homes in San Antonio, but thousands of families lack the credit to buy their home with conventional financing. This is a great opportunity for smart and savvy San Antonio investors! Here is a new under market value San Antonio deal that will make 14% ROI or so:

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  • Address: 549 N San Bernardo Ave, San Antonio, Texas 78228
  • Year Built: 1958
  • Description:  Under market value San Antonio investment property and another cash flow opportunity for San Antonio real estate investors, large beautiful lot, 4 beds 1 bath, 1000 square feet, lot size: .30 acres, subdivision: Memorial Heights, 6K repairs, lawn maintenance, interior paint, clean trash in/out, After Repair Value: 73K,
  • Cash Price: $46,900 CASH ONLY.
  • Exit Strategy: Owner Finance with 6k in repairs: 5K down payment, $750.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: $73,000.00, See attached sold/rental comps.
  • Notes: This San Antonio owner finance,  under market value property has a very large lot, which will appeal to many families.  It features FOUR bedrooms, rare in this price range. Also, we advise owner financing this house rather than renting, with just $6k in repairs – boosts your ROI.

 

Great Buy and Hold Cash Flow Deals Still Available for $45k in San Antonio

The San Antonio real estate market is very hot, with the median property sale averaging nearly $200,000 which is a big increase from 2012, according to recent statistics.

This heated up market has had an effect on the San Antonio real estate investing market, too. Back in 2012, I could buy many fixer uppers for $20,000 or $30,000, stick $10,000 into them, and resell with owner financing at $59,900.

Now it is more challenging for me to find cheap San Antonio fixer uppers. It is very rare that I can find an under market value San Antonio property in an acceptable neighborhood for $30,000.

That is the double edged sword of having a strong local economy: People have more money in their pockets and unemployment is low, which is great. On the other hand, San Antonio fixer uppers are more expensive than in the past.

On balance, I like the current market because working people in the city have more money and they have jobs, which is a good thing for them, their families, and the city as a whole.

I have recently been able to find under market value San Antonio properties for under $50,000, which still means that the San Antonio real estate investor can still make 12-14% ROI, which is excellent.

My favorite current strategy is to buy a fixer upper for about $45,000, do $25,000 in rehab, and then rent the property out to a section 8 renter. That way the San Antonio real estate investor does not have to chase rent, and I can usually get the house occupied and producing cash flow in 30 days.

Here is a great fixer upper to consider for this strategy:

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    • Address: 804 Virginia Blvd, San Antonio, TX 78203
    • Year Built: 1900
    • Description: Act fast – hot market and low under market value price! Serious cash flow on this San Antonio fixer upper! San Antonio wholesale property has 3 beds 1 bath, 900 sqft, built: 1900, Lot Size: .07 acres, Yearly taxes: $1,000.00, Estimated yearly insurance $600.00,
    • Estimated Repairs: includes interior paint, plumbing up to code, /bath updates,  Max ARV: 79K.
    • Cash Price: $45,000
    • Alternate Exit Strategy: Rent with 25K in repairs: $995.00 with section 8, no need to chase the monthly payment, San Antonio Housing Authority pays direct deposit to your account.

The Most Important Thing I Tell New San Antonio Investors Is…

I talk to many new San Antonio real estate investors every week, and I am talking to more than ever this past month. San Antonio TX is now on the radar for a lot of out of state property investors.

There are many new San Antonio wholesale property investors coming into the market every month. The reason is that San Antonio is booming.

Real estate prices are up but still affordable. The population is growing, unemployment is low, and wages continue to rise. Houses are selling quickly in the hot parts of town as well.

And while the prices are higher than two years ago, it still is very possible to make positive cash flow on under market value San Antonio properties.

If there is anything I would tell the new San Antonio real estate investor it would be this:

Don’t be greedy, and have realistic expectations!

I often talk to investors from out of state who are used to investing in more expensive areas, and earning $25,000 on a flip. Or I’ll talk to a Midwestern investor who thinks he can make 20% on a buy and hold here.

I’ve been working as a real estate investor in San Antonio real estate since 2001, and I have made many millions of dollars by making $7000 on a flip and $12% per year on a $650 per month buy and hold.

I am very happy to make those types of returns. I basically do lots of these small San Antonio investment property deals each year. Each flip makes me $7000 or $10,000, or each buy and hold makes me 11% or 12% per year, and I am fine with that.

Too many investors focus on doing a few grand slam deals each year. What they should be doing in San Antonio real estate investing is making a solid return on dozens of deals each year!

If you want to make $25,000 or $50,000 on a flip, you need to move into big projects, ones that go for $200,000 or more. And that my friends gets a lot more complicated and expensive than my little $50,000 or $60,000 San Antonio wholesale property deals.

It’s also more risky. In 2008 when the market tanked, I got stuck with a bunch of $1 million San Antonio real estate investments that were no longer worth what I paid for them. That’s what can happen when you are trying to flip expensive homes at or near market value.

Buying little under market value San Antonio houses such as mine is a lot safer. You just have to be happy making $10,000 on a flip.

I currently have several good $10,000  San Antonio flips available, and these are excellent returns that you can make a lot of money on. You should not pass on a deal because you will not make $30,000 on a flip. I advise doing at least 4 per year and making 40-50k. Then use that cash to buy San Antonio buy and hold property.

Below is an excellent 10k San Antonio flip property you should consider:

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    • 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: $69,000.
    • 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: $15,000 in repairs and flip/resell retail – maximum ARV is $99,000. Profit $10,000.

 

5 Things You Need to Make Money With Me in San Antonio Real Estate Investments

I am an aggressive investor and built myself a large portfolio of buy and hold properties in San Antonio in about five years of nonstop work. I don’t need more houses myself. Now my goal is to build long term San Antonio real estate investing relationships with like-minded, aggressive investors with capital. I want to help YOU build your portfolio.

I talk to hundreds of investors and potential investors each year. What I have learned is that the successful San Antonio real estate investors that I work with long term have several things in common.

Am I right to work with you? Are you right to work with me? Well, read below, and then decide :).

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For us to work successfully together you must have:

  • Capital – Pretty important! You need to have at least ~$30,000 to do a San Antonio property flip, or ~$75,000 to do a San Antonio buy and hold. It also helps if you have a solid job and good credit so you can borrow cheap money. But it is not a deal breaker if you don’t have either.
  • Realistic expectations: Current market conditions in San Antonio affordable homes dictate that you can make $10,000 to $12,000 on a flip, and 10-14% per year on a buy and hold. Those are GREAT returns! You can do a ton of damage with those numbers and make fantastic money – do 3, 4, 10, 50 deals per year or whatever your cash situation allows.

Let me be clear: I have made millions in San Antonio real estate investing, and retired before age 30, with those types of returns. If you expect $25,000 flip profits or 20% buy and hold profits on these affordable houses, it will NOT happen in our current real estate market.

San Antonio is a great, low cost market with solid returns. The economy is strong, unemployment low, population growth is booming. Also, this area doesn’t really do crazy boom/bust like oil rich/poor Houston; it’s quite stable.

It IS a hot market right now,  but it won’t go too high or ever go too low. It also is not Austin, which is a great place, but really overpriced right now. I like San Antonio because it is cheap and relatively stable, and cash flow is possible in all economic cycles.

That said, 25k flip and 20% ROI isn’t happening in my San Antonio houses in March 2016. The prices have gone up too much for that.

  • Patience: We work in real estate, not Burger King. You cannot ‘order’ a house to sell in a week. It sells when it sells. Typical DOM is 60-80 days. It can sell faster, but I cannot guarantee that. If you want to sell quick, I recommend buying San Antonio real estate investments north of downtown. That is a very hot area (78201 zip code especially). We also can do a ‘fire sale’ and sell the house at a lower price to get it sold quickly. If you want to get a house producing cash flow fast, I recommend doing a Section 8 rental property; we can rent it out in 30 days in many cases.
  • Courage: Real estate investing in San Antonio and anywhere is not for the meek who cannot handle uncertainty. You WILL make money on these under market value investment properties, but selling a house takes time.
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Teddy our mascot encourages you the new investor to run the numbers and make a decision.

On a related note, you need to have the guts to make a decision yay or nay on deals I send you in 24 hours. Decide! Don’t be a wimp. Millions of people say they want to get into San Antonio real estate investing or in other cities. Few ever do because they lack courage. I talk to investors who have been mulling investing in real estate for 10 years! 10 years and never bought a deal! I did FIFTY HOUSES in my first year! Run the numbers and DECIDE.

  • More patience: You also need patience on the rehab. 30-45 days is typical, and it can take longer if difficulties crop up, or if it rains for 10 days. I don’t want investors calling me daily on when the rehab will be done. The answer is always ASAP, but it takes time.
  • Trust: My comps and ARVs are dead on. I have done hundreds of rehabs, and I know how to do these little houses right. I know exactly what I am doing and what houses in my areas resell for. You of course should do your due diligence on the property and you of course can ask me questions about its resale value.

I just ask you to keep in mind that I do 100 houses in these neighborhoods per year, and I have a high degree of expertise when it comes to affordable home values in San Antonio TX.  Just because Zillow says a house was worth $60,000 (pre-rehab) a few months ago does not make it true for today for the same house that has been rehabbed.

Also, note that when you look at wholesale property comps, they may not always tell the whole story. In my neighborhoods, there is a wide spread of homes values: There are junk house fixer uppers worth $30,000, and fixed up, totally rehabbed investment properties or owner occupied properties for $150,000. That can skew the comps and ‘trick’ the layman on the ARV of the investment property in question. I know the neighborhoods after 15 years and hundreds of deals, so I’m very confident of my stated ARVs.

A related note on trust: I’m not here to sell you 1 house. Read my mission statement. I’m here to sell you 10, 20, 100 houses. Would I really BS you on the ARV on a house? Heck no. You will be a one and done investor. I have no interest in that. I want long term investors here to fulfill my Mission. And it’s a lot tougher to do 50 single deals with 50 different investors than 50 with 1 investor!

You can and will make money in San Antonio real estate investing, but the above items are non-negotiable in any out of state investment property investors that work with me.

I have fired investors in the last year who did a deal with me and had unreasonable expectations. I want all potential San Antonio investors to understand each point above before they consider working with me.

So to summarize, to work with me you need:

  • Capital: 30k-75k
  • Realistic expectations: 10-12k flip, 12-14% ROI buy and hold
  • Courage
  • Patience
  • Ability to trust me.

So does it sound like we can work together? If so, please contact me now.

15% ROI Case Study on $25,000 Fixer Upper San Antonio Property

The San Antonio real estate market is hot, but there are still excellent, affordable San Antonio real estate investments available for the smart San Antonio wholesale property investor.

I found the property 1918 Santiago 78207 in an estate sale, and it was sold to a California investor for $25,000:

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As you can see, this under market value property needed some work:

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However, it is located in a growing and revitalizing area just a few miles west of downtown. So, my out of state investment property investor bought it and put $25,000 of rehab into it:

  • Updated kitchen: Countertop, sink, fixtures, cabinets: $1200
  • HVAC: Installation of 3 ton A/C: $3800
  • Electric: Upgraded all exterior and interior fixtures, all plugs up to code: $2900
  • Interior finish: Sheet rock, paint, doors, trim, hardware, closets and cabinets: $4400
  • Bathroom: New toilet, vanity, mirror, tile/bath/shower walls: $1500
  • Flooring: Laminate flooring in living room and four bedrooms, tile in kitchen, bath, utility: $3650
  • Exterior finish: Paint, dry rotted wood replacement, re-stucco sides: $3300
  • 40 yard dumpster: $1200
  • Plumbing: Up to code: $2200
  • Microwave and vent: $850

The house sold in March 2016 for the following terms:

  • $74,700 final price
  • $750 per month including taxes and insurance
  • 10% interest
  • 30 year note
  • No pre-payment penalty
  • Total ROI: 15%

After rehab pictures:

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This San Antonio real estate investor is making 15% per year on a $50,000 investment.

 

Hot San Antonio Real Estate Investment Market Continues in 2016

Anyone involved in San Antonio real estate investing or real estate in general knows that San Antonio real estate has been hot for the last few years. As a San Antonio real estate investor myself, I have done very well here for 15 years, and the market in the last two years has been strong.

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There are several factors that make San Antonio real estate investments a good bet for the long term:

  • Strong job growth of 3.5%
  • Low cost of living
  • San Antonio’s relative low reliance on oil revenues
  • Strong population growth
  • Pro-business local government

All of these things make San Antonio a solid, long term bet for under market value real estate investing. I have found that even in downturns, the market in San Antonio never drops too much. I always have been able to buy San Antonio real estate investments that produce cash flow.

As for 2016, the news is almost all bright. The San Antonio Board of Realtors reported in February that the San Antonio area had a 10% year over year increase in total sales, as well as a 4% hike in average prices.

Right now, interest rates are low, foreign investors and out of state investment property investors have a strong appetite for real estate investments in Sn Antonio, and job growth is strong. The 3.5% growth rate in jobs in San Antonio bodes well for a continued expansion.

However, on the down side, rising home prices in San Antonio are not always great news. The inventory of available homes is under six months which is quite low considering the growth in population. This could eventually cause a price spike that could lead to a slow down in growth.

That is why I have long believed that as a San Antonio real estate investor, investing in under market value affordable homes is such a smart move. There always is strong demand here for quality homes under $130,000. Usually, the San Antonio real estate investors who get in trouble are investing in more expensive properties above $200,000. Those are the houses that usually decline in value in a downturn and leave flippers in trouble.

I, on the other hand, always buy houses 30% under market value in the $30-75k range, which is very safe even in a downturn.

Given the hot state of San Antonio real estate, now is a good time to flip San Antonio properties, as long as you have realistic expectations of your return. The below property will make you at least a $10,000 return in 60 days.

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    • 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: $139,000.00
    • Cash Price: $65,900 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. $10,000-15,000 profit depending if you are all cash or use hard money lender. Rehab completed in 45 days or less.

How To Build Wealth Through San Antonio Real Estate Investments

If you are a potential out of state property investor and want to build wealth through San Antonio real estate investments, there are a few things that I think might give you some guidance and reassurance:

#1 San Antonio Is a Great Market for Under Market Value Real Estate Investing

This is a pretty unique market:

  • Real estate is still inexpensive, with San Antonio real estate investments in my areas going for $40,000 or $50,000 wholesale.
  • The economy is strong, with annual job growth in the 3-4% range.
  • The local market is not oil dependent, so San Antonio real estate investors do not have to worry about a boom/bust cycle.
  • The population is growing here year after year as is the number of jobs.

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All in all, San Antonio is really good for real estate investors. It is a stable, growing market, and I did very well here in the last downturn.

#2 There Are Still Many Excellent San Antonio Real Estate Investment Deals

Another unique thing about San Antonio for real estate investors is that it is an old city, with a large stock of older homes built in the 1920s to 1940s. I have been investing here for 15 years, and I still drive down streets in my area that I have never been down before.

If you are a new San Antonio real estate investor, you may have trouble finding deals in all the normal places new investors look. One advantage of working with me is that I am at the level where I hire wholesaling companies to work for me and to find potential deals for me. My job is pretty easy when I have people send me San Antonio wholesale property. I just have to inspect the best deals and make offers.

You could spend hours and hours on your own trying to find your own San Antonio wholesale deals, or you could just buy mine.

I also have other real estate investors in San Antonio and agents send me deals because they know who I am, and they also know I close with cash in 10 days.

#3 I Recommend Flipping Properties to Build Capital and Then Buy and Hold

Some people like to flip and some like to buy and hold. My personal portfolio is mostly San Antonio buy and hold properties with owner financing, and a few rentals.

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However, I do believe in this model for people who have limited capital:

  • Buy a $50,000 San Antonio wholesale property either cash or with hard money; do $25,000 or so in rehab, and flip it for a $10,000 to $12,000 profit. You will need to have $20,000 to $30,000 cash to get rolling in this plan.
  • Do 3-4 of those per year, or more if you can.
  • After two years, you could have $100,000 or more. Use that money to buy San Antonio real estate investments to buy and hold – either buy in cash or do 20% down conventional finance.

This is a great, basic blueprint to build wealth in San Antonio real estate investing.

#4 San Antonio Wholesale Property Deals Are Profitable But…

I see many San Antonio real estate investors never do more than a deal a year because they are trying to make too much money on a single deal.

I have made millions of dollars in my San Antonio wholesale property career by doing San Antonio property flips for $5000 or $7000. I never understand why so many real estate investors get greedy and want to make $20,000 or $30,000 on a flip. I do 50 San Antoniio property flips per year and make $7000 each. That’s $350,000! Works for me!

Or, I do San Antonio buy and hold deals for $600 per month. When I do 10 more of those per year, that’s another $70,000 of income. I have no problem with that.

You have to have realistic expectations when you are buying and selling San Antonio investment properties. The prices are low, but you only are going to make so much money on one $60,000 house. Don’t get greedy, and you can do very well.

I have had several out of state property investors walk away from this fantastic San Antonio flip or buy and hold deal. They want to make too much money. You can make $15,000 on this flip in 60 days. Or, 13% per year on a San Antonio buy and hold.

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    • 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: $65,900 firm.

How I Make Big Profits on San Antonio Buy and Hold Property

Many wholesale property investors in San Antonio and other areas are big into flipping properties for wealth building.

It is true that flipping houses in San Antonio can be profitable, and I sometimes do San Antonio property flips. However, the majority of my wealth building over time as a San Antonio real estate investor has been with San Antonio buy and hold property.

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This buy and hold property makes the investor in San Antonio 13% per year.

Below are simple steps to follow to buy a profitable buy and hold property as a San Antonio real estate investor:

#1 Locate the Right Buy and Hold Property at the Right Price

I always try to buy wholesale properties in San Antonio that produce 12-15% ROI per year, either through renting or owner finance. I also like to buy under market value San Antonio properties on the edges of neighborhoods that have houses worth $300,000 or more. The interesting thing about San Antonio wholesale property is that you can find $60,000 under market value fixer uppers just a few streets away from much more expensive properties. Those are the areas I target.

Here is a good example.

#2 Do the Numbers Make Sense?

Cash flow truly is king in buy and hold investment properties. You need to carefully determine how much you keep every month after you pay all expenses.

Many wholesale property investors buy and hold rental properties, and I have done some of that. However, I like to buy my under market value properties in cash, and then owner finance them.

The advantage to this type of buy and hold property investing is that the buyer of the house maintains it, and I just carry the mortgage on San Antonio real estate investment.

If you are doing buy and hold rental properties with a mortgage, really make sure that you are going to see positive cash flow, after all expenses, vacancies and repairs. If you are just barely paying the mortgage when you are fully rented and you have no major repair expenses, trouble awaits!

#3 Make Money at Closing

The biggest reason many buy and hold investors lose money is that they pay too much for the house. You MUST buy the house under market value to produce cash flow. You want to buy a San Antonio buy and hold property at least 20% under market value.

My investor paid 30% under market value for this house and now makes 16%.

#4 Manage Tenants Right

I buy and hold properties with owner financing, so I don’t have many tenants. But if you do rental properties, you have to very carefully screen tenants. You also can hire a property management company to handle your tenant screening and property repairs.

Of course, many buy and hold investors lose money here…..they pay too much for property management and they have no cash flow. Once again, this is where I recommend as a san antonio real estate investor buying properties in cash and owner financing them.

 

How to Do Your First San Antonio Wholesale Property Deal

Back in 2001, I was a rookie San Antonio real estate investor myself with $40,000 of college debt and not a lot of money. I did have enough cash that I made in the stock market to buy my first San Antonio fix and flip property, but beyond that, I was out of money.

To get started with your first San Antonio wholesale property, you probably should start with a simple fix and flip project.

When you flip an under market value San Antonio property, you will buy it 20-30% under market value, and then do $10-30k in repairs so that you can resell it on the retail market.

Of course, there are many mistakes you can make when you fix and flip a San Antonio property, and you really have to know what you are doing. My advice to a rookie is to not take on a fix and flip project alone, at least for your first deal.

Wherever you are, I recommend that you work with an experienced real estate investor who ideally is also a licensed real estate agent. That investor can help you to find a good under market value investment property and guide you on how much repair to do.

If you are a handy type, perhaps you can do the repairs yourself. If not, your investor partner may be able to do it for you.

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Teddy our mascot.

In my case, I have several full time work crews helping me with San Antonio flip properties and San Antonio buy and hold properties.

If you are going to do your first property flip project on your own, be sure to read this article I wrote about how to get hosed when you do your first fix and flip.

If you are interested in flipping San Antonio properties to build up cash, I can help you with it if you like.

You will need probably $20,000 cash to get started on your first flip. The rest can be funded through one of my hard money lenders. Cash is always best as it is cheaper, but if you don’t have it, hard money it is!

Expect to make $8000 to $10000 on your first flip. Below is a great first San Antonio flip property:

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    • 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: $56,500.
    • 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: $25,000 in repairs and flip/resell retail – maximum ARV is $99,000. Profit $10,000.

 

How to Flip a Wholesale Property in San Antonio and Get Hosed

I mostly buy and hold investment properties in San Antonio TX now, but I still flip houses for out of state property investors. Over the last 15 years, I’ve flipped several hundred houses, and I’ve made my share of mistakes.

Hopefully, you can learn from the mistakes I made years ago and make good returns on your San Antonio flip properties. The biggest thing to avoid is without question to not buy the wrong San Antonio flip property! Avoiding the bad flip deal is hugely important.

And here are some of the mistakes in more detail that will get you hosed in your San Antonio flip project:

#1 Getting Your ARV from Zillow

I run into quite a few rookie investors who think that you can get an accurate after repair value by using Zillow and other websites. Let me be clear: If you are getting your ARV from online research, just take a pile of cash and burn it, because you are going to get hosed on the San Antonio flip deal.

You MUST work with a very experienced real estate agent (who ideally is an investor) who knows the area well and can determine an accurate ARV.

I for example am a San Antonio real estate agent and also an expert San Antonio real estate investor. I know down to the dime what the ARV is on a San Antonio flip property or a San Antonio buy and hold property.

#2 Fudging the Numbers on the 70% Rule

The 70% rule works like this: Take your ARV (which I sure hope is accurate!) and multiply it times .70. So, if the ARV is $100,000, multiply that times  .70. That’s $70,000. Now, subtract your repairs (another area where you really have to know what you’re doing to make a San Antonio property flip work).

Say, the repairs are $20,000. So, you subtract that from $70,000. You now know approximately the maximum amount you can pay for that San Antonio flip property.

Some rookie investors will fudge the numbers here because they fall in love with a deal. Never do that. Be ruthless and disciplined when determining the maximum amount you can pay. Your profits depend on it.

#3 You Buy the San Antonio Flip Property with No Exit Strategy

As I said above, I usually buy and hold San Antonio properties long term now – with owner financing. It is, however, a good idea to have a couple of exit strategies in mind if something goes amiss.

For example, you could rehab the San Antonio wholesale property and not find a buyer for 6 months. It has happened even to me. In that case, you need to go to plan B, which for me is to rent out the property section 8. That’s a good go-to, back up option for San Antonio distressed properties.

#4 Doing a Flip Deal with No Team

How many out of state investment property investors get into real estate investing on the side with no experienced team to rely on? What a disaster. You are almost certain to get hosed in San Antonio real estate investing.

To make a successful San Antonio flip, you need to have the following:

  • An expert real estate agent/investor
  • An experienced rehab crew
  • Hard money lender (working with an experienced investor will be easier because he will have done a lot of deals with many HMLs in the area)
  • Real estate attorney
  • Title company

I have a San Antonio buy and hold and property flip team that I have worked with for 10 years.

#5 Flipping With Your Last $10,000 or $20,000

Sure you can risk it all and hit it big, but you also can get totally hosed. You should not do a San Antonio property flip with money that you absolutely have to have back in 90 days or the world will end.

For your first property flip in San Antonio, you can use a hard money lender to fund a good deal of the deal. You still will need maybe $10,000 or $20,000 of your own money. Make sure you can afford to have that money tied up for a few months! If you can’t, I’d wait to do a flip until you can.

#6 Doing the Rehab on Your Own

I usually maximize my profits on my buy and holds and flips because I know a lot about construction after 15 years. Many rookies lose their butts and get hosed on rehab. Do not do the rehab on your own unless you have YEARS of construction experience in similar projects, and you have the time to devote to the flip project.

#7 Never Doing a Deal

After all this gloom and doom about failing in flipping a house, the worst is really to never do a deal because you are afraid. You just need to do plenty of prep work and studying and networking to prepare to do your flip deal. Study the numbers, learn construction, assemble a good team, and when the time comes, do the deal!

If you are interested in doing a San Antonio property flip and are nervous, I’m happy to work with new investors with capital. I’ll show you exactly how I do it to make a $15,000 or $20,000 return in 60-80 days.