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San Antonio Investors Buying Up Properties At Rapid Pace

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

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

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

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

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

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

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

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

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

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

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Building Real Estate Wealth – Watch Out for This Expensive TAX TRAP!

If you plan on using financing to help your IRA to acquire real estate you have walked smack dab into one ugly tax trap under the name of “Debt Financed Income”. Financing or as the tax law refers to it as “leverage” refers to obtaining a Mortgage, seller carry-back note, a private or hard money loan.

Normally income earned by an IRA is not subject to taxes, however, if real estate is purchased with borrowed funds, the income will be considered “Debt Financed Income” and the profits generated will be subject to “Unrelated Business Income Tax (UBIT).

Huh?

The simplest explanation is, that the IRA is using non-IRA money to make tax deferred profits. Since the purpose of the IRA is to invest personal pre-tax contributions the use of non-IRA funds falls outside this design and results in a percentage of profits being taxed at trust tax rates in the calendar year when the profits are realized.

Here is an example, if your IRA purchased a property for $100,000, and financed $60,000 of the purchase price, the debt/basis percentage would be 60%, and so the IRA would have to include 60% of the profits as taxable income.

Lets say your profit on the sale of this single family house was $50,000 x 60% (debt basis) then $30,000 is considered “Debt Financed Income” and is subject to  “Unrelated Business Income Tax” which is assessed at trust tax rates – in this case up to 39.6% which amounts to a kick in the gut tax hit totaling $10,238.00

Oh by the way, if you think you can dodge the bullet because you are going to rent the house, think again. The net profits from your rent roll are also subject UBIT each and every year– Yikes!

Wouldn’t is be great if “Unrelated Business Income Tax” could simply disappear?

This is where choosing the right type of plan makes all the difference in the world.

A One-Participant 401k plan is NOT subject to UBIT as long as the financing is non-recourse to you personally. Congress actually created a special tax code exemption for Qualified Pension Plans (401k’s) that removes them from the profit sucking UBIT vacuum an IRA cannot escape.

Choose a One-Participant 401k plan and you can gorge yourself on all the financing you want to and invest in high ROI real estate properties for wealth building. Under market value real estate investments are a great way to build wealth, and the solo 401k is the way to do it.

  DAVID COLE
ph:  928-350-8368
fax:  928-318-6695
website:  www.freedomfirst401k.com
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Building Wealth In Real Estate Investing with a Solo 401k

One of the major purposes of investing in real estate in San Antonio and other places is to build wealth slowly over time. One of the most important ways to do so is to invest in high ROI real estate investments that are protected from US taxes.

Many real estate investors automatically decide to invest in real estate with a self directed IRA, which is a perfectly good way to invest. But there are other options that are worth considering; in fact, a solo 401k can often be superior to an IRA for investing in real estate. But most people are not aware that a solo 401k can be created by a private individual to invest in almost anything, including real estate.

Here are some things to know about the solo 401k:

  • It is a one participant 401k plan, and is just like a traditional 401k plan but it just covers one ‘worker’ – you.
  • Unlike an IRA, you can contribute up to $60,000 each year
  • A solo 401k plan has an employee and profit sharing option but a traditional IRA has a low annual contribution limit. For those over 50, you can make a maximum contribution of $24,000 in a 401k and that can be pre tax or after tax.
  • A solo 401k may be contributed to in either Roth or pre tax format, but a self directed IRA may only be made in pre-tax.
  • Tax free loans: A solo 401k allows you to borrow $50,000 or 50% of the account value. You can use the loan for whatever you want. A self directed IRA cannot be used to borrow funds without it being a prohibited transaction.
  • You can open your 401k at many banks yourself. But with a self directed IRA, you have to use a custodian to hold the funds.
  • You do not need to make an LLC with a 401k. The plan itself may invest in real estate investments without an LLC. A 401k plan by definition is a trust, and the trustee may take title to real estate property without an LLC being formed (another expense).
  • Much better protection from creditors: A solo 401k is a fortress against lawsuits and creditors. It offers far better protections than an IRA. The 2005 Bankruptcy Act will normally protect all 401k assets in a bankruptyc. Most states also have more creditor protection in a solo 401k than a self directed IRA – outside of Chapter 7, 11, or 13 bankruptcy.

Once you have established a solo 401k, you only need to decide which under market value real estate investments that you are going to invest in.

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Seize Control of Your Own Wealth Management Now!

We’re living in a very exciting time and savvy investors are wasting no time in putting their retirement plans to work to capture juicy real estate investment returns. People everywhere realize that the real estate opportunities available right now will most likely never be repeated again during their lifetime.

Is your retirement nest egg still sitting there at the mercy of the stock market? A market which can drop like a lead balloon at the mere mention of a negative rumor. Perhaps it is time to rethink your retirement plan investing options?

Most people hold their retirement savings in traditional and widely-known vehicles such as; company-sponsored 401k plans, online IRA brokerage accounts and the like. But these are the same vehicles that have people up in arms due to the gut wrenching losses they have experienced.

You see, most “traditional” retirement plans only offer limited selections that are based in the equities markets. Problem is, these investments are driven by and subject to whatever impacts Wall Street and lately that has been just about everything.

Maybe you were among the millions of people who were pummeled in 2016 by two major corrections that resulted in $3 Trillion dollars evaporating overnight. How many people saw their retirement dreams go up in smoke in less than 24 hours? If you are sick and tired of the roller coaster ride on Wall Street then perhaps it’s time you explored so called, non-traditional investing.

Wall Street lives by two iron clad rules. Get CONTROL of your money and keep CONTROL of your money – anything else is unacceptable to them. They have absolutely no interest in helping educate you that they are NOT the only game in town.

A Self-Directed Retirement Plan = Freedom of Choice!

Self-directed retirement plans can help you break free of the investment restrictions your current custodian places on you. By utilizing a self-directed plan, a whole world of alternative investments opens up.

It’s not difficult to transfer your money over to a self-directed custodian. Your custodian of choice will walk you through the process of transferring assets into your self-directed plan and will also provide you with guidance on what you can and cannot invest in with your new retirement account.

Just what types of real estate investments open up to you with a self-directed retirement plan?

Here is a just a partial list of idea starters-

  • Raw land
  • Residential homes
  • Commercial property
  • Apartments
  • Duplexes
  • Condos/townhomes
  • Mobile homes
  • Real estate notes
  • Real estate purchase options
  • Self-storage units
  • Tax liens certificates
  • Tax deeds

All of these investments and more are available when you have a self-directed retirement plan! Take control of your own wealth management!

I have no doubt your curiosity has been piqued by this brief article – stay tuned as the next series of articles will pull back the curtains revealing even more about the secret that Wall Street hopes you’ll never discover.

  DAVID COLE
ph:  928-350-8368
fax:  928-318-6695
website:  www.freedomfirst401k.com

FREE IRA book: http://freedomfirst401k.com/self-directed-ira-guide/

Reserve your personal consultation: http://meetme.so/davidcole

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How an Owner Financed Deal Works In San Antonio

Most of our investors’ real estate investment portfolios in San Antonio are in owner financed properties. Rather than rent the properties out, they do an owner financed note to a qualified buyer.

Many real estate investors are not familiar with how an owner financed deal works, so we thought we would lay out the process:

First, we find an under market value investment property in San Antonio in a revitalizing and growing area near downtown. A good example is this dual property in an area that is seeing major reinvestment by the city:

Address: 106 and 110 Dewitt, San Antonio Texas, 78210

Description: Location Location, just south of downtown, short distance to the river walk and the new San Pedro creek river walk extension project (multi-billion dollar inner city revitalization): properties are going to double in value in the next 5 years. Both homes need to be converted into 3 beds 1 bath: estimated repairs for both projects: 80K-40K each, purchase price for both investments: 80K, Max After Repair Value: 119K each or 230K for both, Package deal.

Price: $80,000 cash

After we do a $3k-10k clean up and repair of the property, we find a good, qualified buyer with steady work, income and at least $5000 down payment. We execute a promissary note with the buyer of the San Antonio property. We typically charge 9% or 10% interest, a 30 year repayment schedule (fully amoratizing), no prepayment penalty, and consequences for default.

The buyer then sends us his monthly mortgage payments either by check or electronic deposit (I have a special Chase account set up for this purpose). We earn a very good ROI in the range of 10-15% per year, and the property is maintained by the end buyer.

We tend to hold notes for the long term, and do not usually sell them.

Seller financed deals sometimes are for the short term while the buyer gets their credit cleaned up and refinances. In San Antonio, few of our blue collar end buyers end up refinancing. We get long term cash flow with no repair headaches. I also can save thousands in rehab costs because we generally only do a light clean up of the property. The same property if rented would need far more in repairs.

Why don’t more investors consider owner financing their properties? We think many investors simply are not familiar with the process. Many new investors think investment properties must always be rented. Not so.

Another reason we think is that real estate investors may want to pull  cash out of their investment properties to do more deals later. You can’t do that with an owner financed property. But you can sell the note on the property if you choose to do so and get cash for more deals.

Last, we think that people don’t realize that you can buy properties with a mortgage and then do an owner financed deal to the end buyer. This is known as a wrap around mortgage, and can be a really great way to make good cash flow, conserve cash for more deals, and eliminate investor worry about repairing properties.

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Major Redevelopment of Downtown San Antonio Raising Investment Property Values

If you are looking for high ROI real estate investment opportunities, you would be wise to consider buying rental properties in and around downtown San Antonio soon.

Major redevelopment projects are occurring in downtown San Antonio worth hundreds of millions of dollars, including new hotels, a new Frost skyscraper, a revamping of the Lone Star Brewery, and an overhaul of Alamo Plaza.

The south side of San Antonio also is going to have major redevelopment in the works in the coming years, with a facility there to rival the Pearl on the north side.

Some of the other parts of San Antonio that are seeing revitalization are the Alamodome, San Pedro Creek and the Hemisfair area. All of this is going to be adding substantially to real estate values in the San Antonio area.

All of this growth and redevelopment is leading me to pick up more properties around town. This two for one deal is one I just got last week:

Address: 106 and 110 Dewitt, San Antonio Texas, 78210

Description: Location Location, just south of downtown, short distance to the river walk and the new San Pedro creek river walk extension project (multi-billion dollar inner city revitalization): properties are going to double in value in the next 5 years. Both homes need to be converted into 3 beds 1 bath: estimated repairs for both projects: 80K-40K each, purchase price for both investments: 80K, Max After Repair Value: 119K each or 230K for both, Package deal.

Price: $80,000 cash

Exit Strategy: I recommend buy/remodel/rent then resale in 5 years

Comps: 110 & 106 Dewitt rental comps 110 & 106 Dewitt sold comps

These San Antonio investment properties are only $40,000 each. I recommend putting $40,000 into each one and then renting them out for a few years. I expect these properties will nearly double in value by the time most of the slated renovations downtown are completed. I have bought and sold hundreds of under market value homes in this area, and I am usually very close on what houses will be worth after my rehabs and after 3-5 years.

I have not seen San Antonio put this much money into the downtown and surrounding areas in a long time. I expect the development is going to make San Antonio investment opportunities even more profitable.

 

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SOLD – 106 and 110 Dewitt, San Antonio Texas, 78210

High ROI Investment Opportunity! High Real Estate Appreciation! Location Location, just south of downtown, short distance to the river walk and the new San Pedro creek river walk extension project (multi-billion dollar inner city revitalization): properties are going to double in value in the next 5 years!

Address: 106 and 110 Dewitt, San Antonio Texas, 78210

Description: Location Location, just south of downtown, short distance to the river walk and the new San Pedro creek river walk extension project (multi-billion dollar inner city revitalization): properties are going to double in value in the next 5 years. Both homes need to be converted into 3 beds 1 bath: estimated repairs for both projects: 80K-40K each, purchase price for both investments: 80K, Max After Repair Value: 119K each or 230K for both, Package deal.

Price: $80,000 cash

Exit Strategy: I recommend buy/remodel/rent then resale in 5 years

Comps: 110 & 106 Dewitt rental comps 110 & 106 Dewitt sold comps

Contact us for more information

More Pictures: 

 

 

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SOLD – 1547 N Center, San Antonio, TX 78202

  • Address: 1547 N Center, San Antonio, TX 78202
  • Description: Affordable homes are at an all time high demand, excellent location east of downtown, needs to be converted into a 3 bedroom 1 bath, 1 beds, 1 bath, 677 sqft., estimated repairs: 40K, clean/lawn maintenance/interior paint/exterior paint, plumbing/electrical up to code, flooring, sheetrock/texture, roof, foundation, 2 room addition. Max After Repair Value: 99-109K.
  • Price: $35,000.00 cash.
  • Exit Strategy: Once rehabbed we recommend rent for 2 years then resell with conventional financing Or – Owner Finance with 15k in repairs: 5K down payment, $795.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 79K, see attached sold comparables.
  • Note: This is a very affordable, high ROI investment property that can be easily converted into a 3 bedroom, 1 bath.
  • Comps: rental comps 1547 N Center Sold Comps 1547 N Center
  • Please contact us for more information. 

More Photos:

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New York Times Highlights San Antonio’s Development Prowess

As most real estate investors in San Antonio know, billions of dollars of development have poured into San Antonio in the last 20 years. And the city is really starting to get on the national and international map, both as a tourist destination and also as a place to find high ROI investment opportunities in Texas and elsewhere.

The New York Times just wrote a new piece about taking 36 hours to visit San Antonio, and it highlighted much of the revitalization of the Alamo City in the last few years. For example, did you know that the River Walk, which opened in 1941, was expanded in 2013 from the three mile tourist section to a full 15 miles?

The downtown area of the River Walk is where all the tourists flock, and it’s great; there are many wonderful bars and restaurants along the narrow sidewalks. But the River Walk is now much bigger, and you can walk two miles down to the wonderful Pearl Brewery area. There you can enjoy a less crowded and less commercialized walk as you pass art installations, wetlands, and even an underpass that features a very cool soundtrack of singing birds.

For San Antonio real estate investors, this development has led to property appreciation, better investment opportunties, and more are slated for the future.

On the east side of town, the local developer Efraim Varga plans to invest $150 million into a mixed use development called Essex Modern City. It is going to include 80,000 feet of office space, 65,000 of retail space, 250 apartments, 150 condos and 80 townhouses.

Developers of this space are hoping that tech companies will move in to lease some of the creative office space. The site of the development is very close to the Alamodome, Hemisfair and the San Antonio River, so the development is expected to do quite well.

Meanwhile, I continue to buy  San Antonio fixer uppers, which are doing very well with all of the revitalization this city is seeing. I am seeing stronger demand for my end buyers with my owner finance program. Most of my neighborhoods are within a few miles of downtown and much of the revitalization that is taking place:

  • Address: 3118 Owasso St. San Antonio, TX 78211
  • Description: San Antonio investors, flip this house for a nice profit,  4 beds 2 bath, 1560 sqft, new homes on the same block, estimated repairs:60-80K, Price: 49K, Max ARV: 159K-189K, estimated profit: 40-80K, 3 month major project.
  • Cash Price on San Antonio Fixer Upper:  $49,000 CASH ONLY
  • Exit Strategy: Flip with 60-80k in repairs, profit 40-80k.
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Forbes Trumpets Texas and San Antonio for Lifestyle, Real Estate Investing

If you are looking for a good place to move with affordable, growing real estate prices, good job opportunities and high ROI real estate investment opportunities, you should strongly consider Texas, and San Antonio.

Don’t take our word for it: Forbes magazine has been touting the many economic benefits of living and investing in real estate in Texas in 2017.

According to a Forbes analysis of realtor.com data in 2017, San Antonio is the #4 city in America for where people are moving to. The median home price, while it has gone up since 2012, is still a reasonable $275,000. Unemployment is very low in San Antonio at just 3.7%.

Austin is ranked #5 for where people are moving, and the unemployment rate is just 3.1%. The median home price is up to $399,000, however.

When it comes to investing in high ROI real estate investments, you will have a hard time finding a better place than Texas, Forbes also reports. Many Texas cities, including San Antonio, receive high marks both for affordability and growth. Those are two of the most important factors when you are thinking about investing in real estate.

Forbes notes that Texas has several spots on its top 20 cities to invest in. It explains that the recession and housing crisis did not hit this state as hard as the rest of the US. This means that the state has bounced back faster and has been adding more jobs for longer and faster than most of the US. Job opportunities and affordable real estate have led more people to move to Texas, as of 2015, than any state other than Florida.

The magazine states that San Antonio is one of the top 20 places to invest for 2017 because the population of the city grew by an impressive 6.5% from 2012-2015. In 2016, home prices gained 7% in value and jobs growth was 1.7%. Homes are still under valued by 7%.

If you are looking for a good under market value investment opportunity in San Antonio, consider this one:

  • Address: 1319 S Hamilton St., San Antonio, TX 78207
  • Year Built: 1956
  • Description: San Antonio buy and hold investors and real estate investors Another Major cash flow opportunity, 30% instant equity under market value, almost cute cottage, needs minor help, booming San Antonio Market West of Downtown, 2 beds, 1 bath, 616 sqft, lot size: .05 acres, estimated repairs: 5K, clean/lawn maintenance/interior paint/front paint. Max After Repair Value: 75K
  • Cash Price on San Antonio Fixer Upper: $45,000 CASH ONLY
  • Exit Strategy: Owner Finance with 5k in repairs: 5Kdown payment, $750.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 75K, see attached sold/rental comparables.