SOLD – 905 Green St, Poth, TX 78147

Out of state investment property investors, this San Antonio investment property offers 15% ROI with no repairs after you do the rehab.

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    • Address: 905 Green St, Poth, TX 78147
    • Year Built: 1956
    • Description: Excellent cash flow opportunity San Antonio investment property, booming San Antonio Suburb Market, extra clean community, very popular location southeast of San Antonio, 3 beds, 1 bath, 1274 sqft, large lot: .17 acres, estimated repairs: 20K, paint in/out, new HVAC, update plumbing/electrical up to code, flooring.
    • Max After Repair Value: $89,000.
    • Cash Price: $39,000 firm.
    • Exit Strategy: Owner Finance with 20K repairs: 5-10k down, $900.00 monthly P/I, 30 year amortization, 10% interest, Price: 89K; or resell to cash investor after rehab.
    • Additional Costs: $1500 commission to me on wholesale, $2000 in closing costs, $1500 commission to me on resale, $2000 in closing costs on resale (taken out of $5000 down payment from buyer).
    • Profit Year 1 on Buy Hold : 13.6% ROI
    • Profit Subsequent Years on Buy Hold: 15.1% ROI
    • Profit on Cash Resale: $20,000 to $24,000
    • Contact us for more information or to make offer.
    • Sold and Rental Comps: sold comps 905 Green St rental comps 905 Green St
    • Why You Should Believe My Numbers

More Pictures:

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Investors, you will never see a San Francisco investment property, Los Angeles or a Seattle investment property at this price point and rate of return!

$41,000 ‘Junk’ House Now Makes Out of State Investor 14.6% ROI

It has been a very busy 2016 in our under market value investment property business in San Antonio TX! The housing market and economy here in South Texas is strong, even with the cheap oil prices.

We have just rehabbed and resold another of our out of state property investor’s distressed houses that I wanted to share with you.  This was another of those ‘junk houses’ that so many investors pass by but I always buy.

Note: 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.

These San Antonio investment properties are a bit run down, but are in up and coming neighborhoods where there is a great deal of revitalization occurring. All they need is some rehab and they can be resold with owner financing to a hard working, blue collar family.

The under market value investment property address is 166 North San Horacio, 78207. Here are the before images of this distressed property:

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This below market value investment property is on a large lot for this part of west San Antonio with large mature trees in the front yard.

I sold this San Antonio investment property to a San Francisco investment property investor for $41,000. We then performed $10,000 of rehab on the property, which included paint in and out, minor foundation work, bathroom touch up, plumbing and electrical work, and new light fixtures.

Note that this is a seller financed property, not a rental property.

After rehab pictures:

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REHAB 3 REHAB 4 REHAB 5 REHAB!

The rehab was completed in December 2015. We got an owner finance contract on this under market value investment property in February 2016 for the following terms:

  • $76,000 price
  • $5000 down payment
  • $622 per month
  • 30 year note
  • 10% interest
  • Total ROI: 14.6%
  • Note can be resold after 1 year

This under market value investment property cost the San Francisco investment property investor $51,000 total and has an annual ROI of 14.6% – without any maintenance or repairs.

This is the type of real estate cash flow that you can make with out of state investment property in San Antonio TX! Most of my investors used to buy California investment property, San Francisco investment property, Los Angeles investment property, or San Diego investment property, and now they only buy here 🙂

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:

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

hollywood

Before: $51,000 Purchase Price

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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:

hollywood 2013 4 20140215_121144 2013 2

  • 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:

dasdf 20140403_080937 20140727_134732 - Copy - Copy 20141017_121747 - Copy 20140727_134826

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:

SantaAnnaNew IMG_0004_2 IMG_0005_2

After Rehab:

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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:

Bath kitchen living Bedroom 2

After Rehab:

new ac new bath 2 new door new front room new kitch 2 new front new bath

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:

Bathroom.275145712_std Cabinets.275145650_std Front

After Rehab:

bath2 halls 2 kitch light lr 2

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:

8f2df7_47c9251e850f49b39e8ac6855ec4b172.jpg_srz_p_284_213_75_22_0.50_1.20_0.00_jpg_srz 8f2df7_6245703aad1448a1be8d6a531a896331.jpg_srz_p_283_212_75_22_0.50_1.20_0.00_jpg_srz 8f2df7_a270a2a6b74c4c9f9655463eb9586a67.jpg_srz_p_284_213_75_22_0.50_1.20_0.00_jpg_srz

After Rehab:

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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

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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:

1 pe new LR new room 2 new kitchen

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:

1 - Copy Bath Kitchen1

After Rehab:

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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.

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:

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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:

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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:

Living_DiningKitchen

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:

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1 3 6 7

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.

 

 

SOLD – 820 South San Manuel St., San Antonio TX 78237

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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: $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 $15,000, rent $995 per month.
    • Contact us for more information or to make offer.
    • Sold and Rental Comps: Sold Comps 820 S San Manuel Rental Comps 820 S San Manuel

More Images (more photos to be added soon):

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Please contact us to make offer or ask questions.

Investors, you will never see a San Francisco investment property, Los Angeles investment property or a Seattle investment property at this price point and rate of return!

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:

k

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:

tampico-6-300x169 tampico-5-300x169

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:

Living_DiningKitchen

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:

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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!

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.

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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:

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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

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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.

 

Why Buy Out of State Investment Property?

If you are an investor or possible investor in California, you probably know the answer to that question! Many of my out of state investors in California cannot believe the sky high cost of investment properties in many of the high population areas of California, such as San Francisco, Los Angeles and San Diego. Great places to live, but for positive cash flow investing? Not so much! California investment property is very expensive.

san fran
I feel for San Francisco real estate investors.

I’ve been fortunate enough to build my large portfolio of under market value properties here in Texas, where property values are a lot lower than some places. San Antonio investment property produces excellent real estate cash flow and is quite inexpensive. I also only owner finance my houses, so I have no maintenance costs.

If you are thinking about buying an out of state investment property for passive income, here is a good simple guide that can help:

How to Select Your Out of State Investing Market for Passive Income

Where you are going to invest in under market value properties depends on your real estate investing goals. Are you a flipper or a buy and hold investor? If you hang around my site long, you’ll learn I retired early with buy and hold investment properties that are owner financed. I’m a big believer in buy and hold long term cash flow – that is how I financially retired at just 28 in San Antonio – one of the best cities to invest in real estate, in my humble opinion.

Anyway, a good buy and hold market for passive income might not be the best flipping market. Here in San Antonio TX, flipping has gotten tough as the economy is booming as of January 2016; it’s hard for flippers to get properties cheap enough to make a good profit. For buy and hold investing though, I still make 10-12% per year, or $500-$700 per month in positive cash flow.

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I’m biased, but TX is a great place for out of state investors – the population is soaring due to job growth.

As you think about where to buy out of state investment property and under market value properties, consider:

  • State law: Is the state friendly to property owners? You want to invest in a state that makes it easy to evict tenants or to foreclose. State that are tenant friendly, such as CA, make it so hard to evict or foreclose, you could lose your shirt.
  • Trends: What’s going on in the state as far as population? Here in Texas, we are seeing MEGA population growth.   My market of San Antonio is #5 on the list above as far as hottest housing markets go. Jobs are the biggest reason that people are coming to Texas, as well as housing affordability. This makes Texas a great place for out of state investors.
  • Price to rent: What does rent cost compared to the price to buy? In my town, it’s 16.90, while in San Francisco it’s 30.05. Whoa! No wonder so many CA investors are investing in out of state investment properties.

These are not all the factors to consider when you are buying an out of state investment property instead of California investment property, but if those three areas look favorable, you probably could do well in that market and financially retire early as I did, in one of the best cities to invest in real estate. San Antonio investment property is excellent for cash flow.

How To Find Out Of State Investment Properties and Under Market Value Properties

Now that you know which market to buy your below market value investment properties, how are you going to locate that house? Most investors I know do it two ways:

  • They find a good real estate agent investor who is hooked up with excellent contractors, property inspectors, title company, real estate attorneys.
  • They find a good turnkey property provider. The house has been totally rehabbed and usually has tenants or buyers in place.

Which of these routes you go with will depend upon your investing goals again. Some out of state property investors want to have absolutely no headaches or management worries, so they just buy turnkey properties. Other out of state investors think that method is too expensive, so they manage their own rehabs and property management.

If you decide to find your own below market value properties in your chosen market, here’s what you’re looking at:

Buying Below Market Property Yourself

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Advantages

  • You’ll get the house at a low price
  • High cap rate or ROI

Disadvantages

  • The house will not be producing income during the rehab and the time it takes to find a renter or an owner finance buyer
  • Rehab costs could shoot up if you don’t have reliable partners
  • Harder to manage the rehab and management from a distance
  • Difficulty in controlling material costs

Buying Turnkey Property

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Advantages

  • Totally rehabbed
  • Tenant or buyer may already be in place
  • No work for you
  • Cost of material more predictable and stable
  • You know the quality of work you will get
  • Whole investment team is in place

Disadvantages

  • Higher initial cost
  • Lower ROI or cap rate

How big a difference are we looking at between buying a run down under market value house and buying a turnkey? Let’s take a look:

  • Run down property: Estate sale, $30k purchase, $30k in rehab – will produce 13% ROI with owner financing or renting.
  • Turnkey property: $80k purchase price, no repairs, will produce 9-10% ROI with owner financing or renting.

So which will it be? Most people would say you obviously go for the better ROI with the under market value property you do yourself. But remember, you are going to have to do a heck of a lot more work – at a distance – with the fixer upper property. A turnkey property will earn lower ROI, but it a lot less stress. At the very least, you might consider a good turnkey property if you are a beginner in real estate investing. That way, you can make some good positive cash flow as you develop your own investment property team.

It all boils down to how you look at investing in real estate. Investing by definition means using something to get some type of return. You just have to decide if you want to use just your money to get a return, or use your time AND money to get a potentially higher return.

Choose wisely based upon your personal investing goals, and you will hopefully be able to be financially retired on your time table.

Personally, if I were a usual buyer of California investment property, San Francisco investment property, Los Angeles investment property or San Diego investment property, I would strongly consider buying out of state investment property. Investment property is all about real estate cash flow…..it’s something you can rely on year in and year out, unlike hoping for appreciation.

How To Retire Young With Under Market Value Properties

Hello investors and ‘maybe’ investors! Thanks for visiting my little website about under market value properties in San Antonio TX. It is these little bitty affordable homes that allowed  many people to retire young. You can, too!

#1 I Discovered an Inexpensive, Stable Real Estate Market

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Before investing in San Antonio, many of our investment property investors considered Austin, but that’s an expensive market, even years ago. But San Antonios is only an hour south and is a great market for owner financing.

During the market crash of 2008-9, the prices of these homes dropped, and and many investors were able to pick up a dozen at 50% under market value. That also helped to grow our investors’ real estate portfolio.

Lesson Learned: Steer clear of real estate markets with high entry costs. Lower cost cities are much easier for investors with limited capital.

#2 We Found Reasonably Priced Private Money

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After you get your first house or two, you may not have any more cash. But where should you look? One way to do it is to just make phone calls looking for private money. Another is to go to investor meetings and get to know people with money.

Eventually, through all phone calls and networking meetings, some  investors found people willing to loan money at reasonable interest rates. When you can find that source, it makes everything a lot easier.  However, you also can borrow money from your own home or IRA, if you have a good under market value deal and keep the rehab reasonable.

Note – many of us prefer to invest all cash, but there ARE other options. You can, for example, buy nicer houses for $75,000 or so and do 20% down conventional finance, and then owner finance them. Cash flow is ~$300-400 per month with no maintenance.

: Be prepared to do a lot of work and make a lot of phone calls to find private money. It’s easiest of course if you have family willing to loan you money on reasonable terms. If not, get on the phone, and go to real estate meetings every week.

#3 Become A Real Estate Market Expert In Your City

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One of the keys to success is to buy houses many other investors run screaming from! You can buy houses that don’t look that great, do some minor rehab, and owner finance the investment property to a willing buyer.

Other investors early in their careers rehabbed homes themselves and got to know the market in the city. This helps you get a great idea of what homes in many parts of San Antonio are worth. Then, you know how much a San Antonio fixer upper needs in rehab and what to spend without overspending.

You also can earn your real estate license, and spend many hours studying prices of houses. One of the most important parts of being a successful investor is getting a house at least at 20% under market value.

Lesson Learned: Study your local market so you can buy houses under market value. Can’t find those kinds of deals? Consider working with an expert real estate investor in your market who can help you find those deals! Offer to help him or her with their business in exchange for turning you on to good, under market value deals.

#4 Find Good Real Estate Mentors

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Getting started in real estate without successful mentors is like going fishing without fishing tackle! Every beginner real estate investor should work with very successful and experienced mentors. You can find mentors at real estate meetings in San Antonio and also at real estate conferences in other cities.

Lesson Learned: Find mentors and real estate partners who have done several hundred deals and have done well in both boom and bust markets. Working alone in real estate as a rookie is a recipe for disaster.

#5  Invest in Cash, for Cash Flow Only – With Owner Financed Real Estate

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One of the most important lessons some of use learned from our mentors is to owner finance many properties instead of rent them out.

Under the advice of our mentors, we stopped rehabbing and renting out houses. In many cases, we used an owner finance model only.

Today, we buy a San Antonio investment property for cash for about $50,000 or $60,000, do $10000 in rehab, and then resell the property with owner financing to a qualified buyer. There are no overhead costs or property management costs associated with this exit strategy.

(You CAN do owner finance with conventional financing, 20% down, and still earn $300-$400 per month in cash flow.)

Lesson Learned: Consider investing strategies other than renting out property. Owner financing houses is less stressful and is clearer cut in terms of monthly cash flow.

Want to learn more how to do make real estate cash flow on San Antonio investment property? Contact me at jmpickett@gmail.com.

And remember, most of our out of state investment property investors used to buy California investment property, San Diego investment property, San Francisco investment property, and Los Angeles investment property. Here in San Antonio, they usually make 12-15% ROI for great real estate cash flow – without maintenance costs.