Strong Demand for Affordable Rental Properties Should Attract New San Antonio Investors

As the economic recovery gathers steam, many real estate investors in Texas are finding that there is even stronger demand today for affordable rental properties than a few years ago.

The San Antonio economy is doing well with low unemployment rates, rising wages and a growing population.  But there are signs that the prices of new and existing homes in San Antonio are taxing the budgets of middle-class families. Many of them have good incomes, but may not be able to afford rising home prices and down payments.

Last month, the National Association of Realtors stated that the sales of existing homes in San Antonio dropped 2.3% in April 2017. Prices have continued to surge, and sometimes multiple offers are coming in on some affordable homes.

The increase in prices in the last few years of existing homes has somewhat exceeded the rise in wages. So, how is this good news for investors?

Well, investors interested in buy and hold properties and high ROI investment properties in Texas should strongly focus on rehabbing under market value properties and renting them out.

There are plenty of San Antonio families who have enough cash to pay for a rental deposit and $1000 per month in rent, but lack the down payment or income to qualify for a mortgage. In our owner finance market, we are seeing many people who have the income to afford the mortgage payment, but simply lack the cash for the down payment.

This means there is a serious opportunity for the rental property buy and hold investor. Also, with San Antonio properties increasing substantially in value, the buy and hold rental property investor will have a serious chance to increase their equity.

Here is a really nice buy and hold rental property deal I am featuring:

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

The under market value San Antonio investor can buy both for $80k and rehab each one for $40k each. You should be able to rent each property for more than $1000 each. And the increase in equity due to their location will make this a very high ROI investment opportunity.



Investing in Real Estate and Building Your Rental Portfolio

As you are thinking about investing in real estate and building your rental portfolio, you can no doubt find many wholesale property companies in San Antonio to sell you properties.

I am a San Antonio property wholesaler like others in some ways, but with me, you will find a key difference:

I built myself a large portfolio of rental investment properties (and owner financed investment properties) practically from scratch in about 5 years, from 2001 until 2006. If the person selling you properties has few to no properties, how much do they really know about what they sell?

When I first got started in San Antonio real estate investing, I did not have much capital, only about $25,000. In my first year in real estate, I did 50 houses – San Antonio flip properties.

I did that by finding $2 million in private money from a retired doctor and investor in San Antonio. He loaned me in the money in small parcels and I bought under market value $30,000 properties, rehabbed them, and flipped them for a $8000 profit, which we split.

I was able to make $100,000 in my first year in real estate investing, and I re-invested most of the profits into buy and hold rental properties.

Now I am in the position where I have a very large portfolio of buy and hold properties, and I really do not need anymore properties for myself. I like to help other small investors develop their own portfolios.

I run across many small real estate investors in California that want to build a rental property portfolio but are priced out of their current market. I specialize in helping these investors maximize their available cash so that they can buy enough rental properties so they can quit their jobs within a few years.

Here is a typical real estate investing scenario I see:

  • California investor with a good $200,000 per year job and $100,000 cash or equity cannot buy anything in CA worth having.
  • He has steady high tech employment and good credit.
  • I recommend that you buy an under market value San Antonio investment property for cash at $70,000.
  • We do $35,000 in rehab on the fixer upper property. I make it really nice – with central air, tile, lighting, granite, really make it shine.
  • We then rent it out section 8 for the investor for approximately $1295 per month – ARV is about $139,000.
  • After the house is rented, the investor from California can cash out refinance up to 80% and do another section 8 rental property.
  • If he has a line of credit on his residence, he pays himself back with the line of credit from the first investment property, and then borrows another $100,000 and does another one.

This is one of the ways that I built a portfolio of buy and hold properties after I had profits from my San Antonio flips in my first few years in real estate.

So, if you are thinking about buying San Antonio wholesale property, I recommend that you find a 10 year expert in the business who not only can sell you a property, but has experience in building a cashflowing portfolio for himself.