$25,000 Under Market Value Property – San Antonio TX 12% ROI

One of the best ways to make passive income in real estate investing is under market value properties. Every one of the houses that I buy in San Antonio TX are at least 20% under market value. By buying a property that is under market value, you always know that you will be well protected if there is a downturn in the market while you are working on the wholesale property.

Most of my below market value houses in San Antonio TX might be called ‘junk houses,’ but there are three things you should understand:

  • I owner finance my houses to mostly blue collar Hispanic contractors, who greatly value the opportunity to own their own home without any banks involved.
  • There are 500,000 or more blue collar Hispanic workers living in the communities I buy under market value properties. There always is a strong market for owner financing these distressed homes.
  • These under market value investment properties can easily produce an investment return of 11-12% without any maintenance. In some cases, these below market value investment properties can be sold without any repairs at all; I just sold a distressed, $25,000 house this week to a blue collar worker for $45,000, $5000 down.

In short, these below market value investment properties in San Antonio, Texas are an excellent source of cash flow that have made me wealthy. Here is a nice $25,000 wholesale property that will make at least 12% ROI if rehab is done. I also can market it with a quick $2000 clean up and the ROI could be 14% or more:

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  • Address: 228 Yucca, San Antonio, Texas 78207
  • Year Built: 1950
  • Description: Booming San Antonio Market, very popular location west of downtown, this is a 2/1 that has a lot of potential, perfect for a young family. This is a great location and wholesale property, only a few minutes west of downtown and the Riverwalk. Property sits on a beautiful large lot, plenty of room for growth or a wonderful playground and garden.
  • Max After Repair Value: $89,900
  • Cash Price: $25,000 firm.
  • Exit Strategy: Owner Finance with 35K repairs: 5-10k down, $895 monthly P/I, 30 year amortization, 10% interest, Price: 89.9K, can sell note after 1 year; or rent: $900 monthly with 38K in repairs.
  • Notes: We recommend that you owner finance this house because you will have no maintenance expenses.

How Do I Get Started in Wholesaling Under Market Value Properties?

I’m a wholesaler of under market value properties in San Antonio TX, and I know that many people who want to get started in real estate investing turn to wholesaling.

Many investors do so because they want to save up enough money so that they can start to invest in under market value properties themselves. There are some ways to invest in houses without much money down, but I do not prefer this type of investing. I buy all of my under market value properties in cash. Buying cash real estate is more secure, and I’m not interested in holding mortgages on investment properties.

So What Is Wholesaling Anyway?

Wholesaling below market value properties means that you the investor purchase a distressed property, or get the property under contract, and then sell it, or assign the contract as fast as you can.

I do this several times per month in my below market value wholesale property business in San Antonio. I find the below market value house often in an estate sale, get it under contract, and then I wholesale the under market value property to a cash investor from California. He usually fixes up the house for about $30,000, which I do for him, and then we resell it with owner financing for 12% annual return.

The vital key to wholesaling successfully is finding wholesale properties below market value so that there is still money to be made for the end buyer.

Note: You need to use caution when you are assigning contracts on below market value properties! Some states will consider finding either a buyer or seller as real estate agent duties. It could be considered as the act of a real estate agent when you assign the contract. You do not want to be accused of practicing real estate without your license. Be sure you know your state laws before you engage in wholesaling activities.

As my mascot Teddy says:

teddy license

I’m a real estate agent in TX, so I don’t have these concerns. Getting your real estate license is a good option if you are going to be a regular under market value real estate investor.

How Do I Find Wholesale Properties?

The key to this whole game is to find under market value properties. Some of the ways that I find good wholesale properties are listed below.

MLS

This is difficult but occasionally I will be able to wholesale a property of the MLS. Most under market value property investors are all over the MLS so it can be hard to get these properties cheap enough to make them work in a wholesale deal. One option here is to just get your real estate license so that you can make commissions off of these MLS deals.

Off market properties wholesaling

– This is where you are going to make most of your money in wholesaling. This means that the person wants to sell their house for a variety of reasons but it is not listed for sale. The owners could be sick, going through job or relationship problems but have not listed the house for sale yet. They just need the right people to find them and make an offer.

There are several options for finding good off market properties in your area:

  • Purchase from good wholesalers: You may find that finding your own wholesale properties can be really tough as there is a lot of competition. But there are some really good and experienced wholesalers out there that you can buy under market value properties from, and still make a good profit. In my case, I always have 10 or more under market value properties for sale. I have more than 15 years of experience with below market value properties, and I know a good deal that both I and the wholesale buyer can make profits from. I make sure that my wholesale buyers always are going to make a good profit of 10% or more so they come back and buy more.
  • Direct marketing: You send postcards, letters, put up bandit signs and put up websites to attempt to get desperate sellers to call you to sell you their under market value property.
  • Drive for dollars: You drive around neighborhoods looking for empty homes that you can get under contract below market vale.
  • Network: You may see many ads where people claim to have off market houses for sale from the banks. Watch out as most banks are not going to sell an individual house unless they use MLS. I use a lot of networking with other wholesalers, agents and investors in San Antonio to find good under market value properties to wholesale.
  • Go to REIA meetings: You may be able to locate other wholesalers and investors with under market value, off market properties at these events.
  • Direct mail: Some wholesalers send out direct mailings and buy under market value properties and off market properties in this way. They will often send out letters to owners who are not living locally and also to owners who inherited the property. I am a real estate agent, and I can also list the house for sale that I cannot buy under market value.
  • Advertise: Many below market value property investors and wholesale property investors advertise for buying houses with bandit signs and billboards.

Becoming a Successful Wholesaler Is Work

I am a wholesaler of below market value properties myself, and finding good properties that both you and the buyer can profit from is tough. But you can make some money by wholesaling properties so that you can raise money to invest in properties yourself.

What About Assigning Contracts?

Every sales contract has a clause that states it may be assigned. This means that anyone can come into the deal and become the buyer without any permission from the seller. So, you the wholesaler can sell the contract to another under market value property investor and not buy the house.

How Do I Find Buyers for Wholesale Properties?

Once you find a good below market value property, you have to find a cash buyer. In most cases, the profit margins on wholesale property deals are slim and you cannot pay a real estate commission. You have to find cash buyers so that you can make money on these wholesale deals. You also need to be able to close fast so that you can assign that contract.

REIA meetings are good ways to find cash buyers. I sometimes check recent property sales in San Antonio to see who has bought houses for cash in my area. I get letters sometimes from other wholesalers who find me because I buy houses for cash every year.

Going to trustee sales, tax sales and auctions are good places to find cash buyers for your wholesale properties.

No doubt, finding cash buyers for wholesale properties is challenging. I find many cash buyers for my wholesale properties in California.

The good news is, when you close a successful wholesale property deal, you can make $2000 or more. If you have any questions about wholesaling below market value properties, please contact me. I have 15 years of experience doing this, and I probably can offer some helpful insights.

 

 

How I Buy Investment Properties in Texas Below Market Value

I financially retired at 28 with more than $20,000 per month in cash flow. The most important factor in my success in buying the best San Antonio investment property is every house I buy is under market value. That is, I buy under market value properties that require rehab. It also helps that I invest in one of the best cities to invest in real estate.

I have more than 50 buy and hold, owner finance properties that I own in cash that I purchased under market value between 2001-2012.

How I Determine Market Value

One of the biggest reasons I became a real estate agent was so I could determine market value of the best below market value San Antonio investment property on my own. It is never a good idea to use Zillow to determine market value of a property. Zillow is notoriously off base, especially when you are dealing with off market properties or an out of state investment property that are not in the MLS.

Also, bear carefully in mind that the value that you come up with will largely depend upon the repairs your under market value properties need. I like to buy properties that are at least 20% under market value. So if the house is worth $90,000 and needs $25,000 in rehab, buying the house at $115,000 is a waste of time and money. I will not make any money. I want to buy that house for at least 20% under $90,000, or about $72,000, so I can make a good profit.

How I Buy Under Market Value Properties

There are several ways that I use to buy under market value properties in San Antonio TX:

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

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