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Take Over a Hard Money Loan on an Investment Property and Save Big!

Investing in San Antonio real estate can be a great way to build wealth as it was for me. One of the challenges, when you are first starting out, is finding the capital to fund your investments of course. One of the ways that some investors get started is by using hard money.

A hard money loan is a bridge loan that is used for the short term to finance a property while you are doing renovations. A hard money loan in San Antonio is often used by house flippers who want to renovate the home and then sell it retail for a profit. But another strategy that some under market value property investors use is to use the hard money loan to renovate the home. Then, once the property is fixed, get a conventional investment property loan on the home and pay off the hard money loan. The property then can be rented out and you pay the loan from the rental proceeds. If you have done the deal right, you should be able to put away some money every month as your profits and save it over time to do more deals.

Hard money of course is expensive; you can expect to pay an interest rate of 12% to 16% in many cases, and you also have to pay an up front fee and a renewal fee every six months with many lenders. Ideally, you will want to have the property renovated in six months or less so you can either sell it or get a conventional loan and hold it as a rental property.

On a related note, sometimes if you look around, you can find a real estate investor who has a hard money loan on a property but does not have or does not want to spend the cash to renovate the property. In this case, you might be able to work out a deal with the real estate investor that can really save you a lot of money.

All you would need to do with this investment property would be to take over the hard money loan from the investor. In many situations, the investor may have bought the home at a much lower price than it is for sale for today. This can be a great way to get an under market value deal on a property.

For example, we have a San Antonio investment property below where the investor has a hard money loan on the home for about $58,000. That is way below market value. Homes have appreciated in San Antonio by at least 7% in the past year overall. This home on Alametos St. is for sale for $65,000, but if you take over the hard money loan, you have saved another $7000, plus the fees of taking out a new hard money loan. Then, you only need to spend the money on the rehab. What a great way to save a bundle on an investment property! Below is more information on this under market value deal.

Potential more than 40K in profit on this investment. 1614 Alametos, San Antonio, Texas 78201. Excellent location, just north of downtown with a short distance to the river walk and the new San Pedro creek river walk extension (multi-billion dollar inner city revitalization project). Properties in this location are expected to appreciate by more than 50% in value over the next two to three years.

1614 Alametos has a large back yard with shady trees. Currently, the property is set-up as 2 bedrooms and 1 bathroom with a large patio in the back of the house. To get the maximum value out of this property and location, another bedroom and bathroom should be added. Estimated repairs: $65K with purchase price: $65K. Max After Repair Value: $199K

Note: 1622 Alametos just down the street was sold to an investor in 2015 for $65,000. With $15,000 of rehab, the property was sold for $99,000 with owner financing for a 13% ROI. Home was sold within one week.

Price: $65,000

Exit Strategy: Buy, Rehab and Hold this San Antonio investment property.

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San Antonio Housing Market Still Booming in September 2017

Home sales continue to climb in San Antonio and are staying on track for another strong, record-breaking year even though there are fewer homes available on the market.

In August, there were nearly 3,000 homes sold in San Antonio, for a 2.3% increase from 2016. The total number of homes sold for 2017 are 20,867, which is 4.3% above last year at this time. Experts believe that the market is going to break the previous record when almost 30,000 homes were sold in a year.

The median home price in San Antonio is up 3.1% in August to $218,400. This is the fourth highest median price ever in the San Antonio market. Local home prices are shooting higher as there is a shortage of construction workers and more housing demand caused by the growing population in San Antonio.

It is true that housing prices are going up in San Antonio. Still, we are finding plenty of under market value, San Antonio investment properties available for our investors’ portfolios. Blue collar workers flocking to San Antonio for jobs need houses to buy with owner financing or to rent, so our business is still doing well.

San Antonio generally is still a good place to invest in under market value, high ROI investment properties, even if prices are higher than 2010. The strong, growing population and low unemployment rate indicate that this is a growing, robust economy with little signs of slowing down.

We also are seeing more accredited and non-accredited investors with solo 401ks and self directed IRAs buying investment properties in San Antonio for their portfolios.  Below is a great under market value property that will see major appreciation in the next five years.

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Potential more than 40K in profit on this investment. 1614 Alametos, San Antonio, Texas 78201. Excellent location, just north of downtown with a short distance to the river walk and the new San Pedro creek river walk extension (multi-billion dollar inner city revitalization project).

Properties in this location are expected to appreciate by more than 50% in value over the next two to three years. 1614 Alametos has a large back yard with shady trees. Currently the property is set-up as 2 bedrooms and 1 bathroom with a large patio in the back of the house. To get the maximum value out of this property and location, another bedroom and bathroom should be added. Estimated repairs: $65K with purchase price: $69K. Max After Repair Value: $199K.

Note: 1622 Alametos just down the street was sold to an investor in 2015 for $65,000. With $15,000 of rehab, the property was sold for $99,000 with owner financing for a 13% ROI. Home was sold within one week.

Price: $69,000

Exit Strategy: Buy, Rehab and Hold this San Antonio investment property.

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How an Investor Can Make 13% ROI in Their 401 or IRA Retirement Portfolio

Many people today are worried about saving enough money for retirement. If you are going to rely on the stock market to ensure that you can live comfortably in 10, 20 or 30 years, I understand why you may be nervous. While the historical returns of the stock market may be in the 8% range, there is no doubt that some years, the return is much less. If you are planning to retire in a few years and the market dives, you may find yourself not retiring at all.

We know someone who planned to retire in 2007 and live comfortably. After the market crashed, he had to go back to work for another five years.

The good news is that you can make a reliable 10% or even 15% ROI per year if you purchase under market value real estate investments. Many of our investors have made a fortune with San Antonio investment properties over the years.

A popular way to make money for retirement today is to invest in under market value real estate in San Antonio in a solo 401k or self directed IRA. These funds can grow tax deferred over time, and you can often make an excellent rate of return.

Even after you technically retire, you still can invest in under market value real estate and enjoy cash flow. It may not be tax deferred any more, but you can still enjoy positive cash flow. Meanwhile, your friends and relatives are living off their retirement savings accounts based upon the stock market, which frequently dwindle over time.

Below is a great example of what you can do with an under market value investment property with a solo 401k or self directed IRA.

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$65,000 cash price, $15,000 rehab, resold for $99,900 owner finance, $1041 per month, 7 DOM, 12.9% ROI.

Still, we have CA investors coming into our fine city and buying property investment homes and making 12-13% ROI annually, with no property maintenance.

This San Antonio investment property was purchased by a CA cash buyer in July 2015 at 1622 Alametos St. This house is in 78201, and is north of downtown. This region is seeing rapid growth and appreciation.

The bottom line on this property was with only $10,000 of rehab, it was sold with owner financing at $99,900 in only a week after it was rehabbed. Here are the numbers:

  • $1041 per month
  • 30 year note
  • 10% interest rate
  • $5000 down payment
  • $99,900 final price
  • $216/mo. taxes/insurance

The total return on this San Antonio investment property was 13% per year.  That money is being returned to the investor’s solo 401k account each month, and he will use that money to eventually invest in more San Antonio investment properties.

This is what you can do with investing in real estate properties from within a solo 401k or self-directed IRA. Whether you are an accredited investor or a non accredited investor, this can be a great financial move.

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Homes in Southern California See Near All-Time Price Highs

Southern California home sales dropped 5% in May 2017, yet home prices have still hit a record high in that areas.

According to recent real estate research in California, approximately 8.5% fewer homes were sold in Los Angeles County since March 2017, but home prices are still at a near-record high average of $485,000. This is almost as high as the all-time high of $500,000 in 2007.

Southern California is hardly the only part of the state where real estate prices are testing the ability of workers, families and real estate investors to afford homes. Prices in May 2017 in California hit a record high in Orange County, California, and San Diego County, California.

Also, Forbes reports that the San Francisco, California area is seeing soaring median home prices. Around San Jose, Sunnyvale, and Santa Clara, the median home price topped $1 million in the first quarter of 2017. It was just $535,000 a year ago.

Why the Rise in Home Prices in California? 

The biggest reason this is happening is not enough homes are being built in much of California’s major metro areas to meet booming demand. This is because it is harder to get building permits in much of California.

On the other hand, Texas has a very liberal policy on building new homes. Both states feature cities with high job growth; San Francisco and Oakland added 356,000 new jobs in 2016, and in Dallas, there wee 413,000 new jobs added in the same period. But in San Francisco, only 20,400 new homes were built, and there were 120,000 new ones built in Dallas.

This difference in building permit policy has had various effects. Homeowners in Calfornia are enjoying huge increased in property values, which is great for them to pull out cash and invest in real estate. But for people who want to buy, it is extremely difficult to buy in current circumstances. Many home buyers and real estate investors are priced out of the market.

In areas such as San Antonio, Texas, prices only have doubled in the last 20 years or so, but many more people can afford to buy a home for themselves or for real estate investments.

As home prices in California have soared, we have seen increasing demand for under market value real estate investments in San Antonio. Investors want to see high-ROI investment opportunities in Texas. Many affordable homes are available in San Antonio for under $60,000 wholesale. With $20,000 in rehab, the home can be rented for $800 per month. That is the type of positive cash flow that many California real estate investors want to see.

 

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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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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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San Antonio Housing Market Was Red Hot in 2016

The housing market in San Antonio in 2016 was hot as home prices went to the highest levels ever. The local paper reported that 29,508 homes were sold, which was more than an eight percent increase from 2015.

The median price for San Antonio real estate increased six percent to $204,300. This was the very first time that the median sales price had been over $200,000 for an entire year, including the real estate boom years of a decade ago.

Also, the inventory of homes that are available dropped in December 2016 to only three months. this indicates there are more buyers than sellers in San Antonio.

So what does this mean for San Antonio real estate investors? Well in my experience, it means that real estate prices are going up, and buying homes for many people in San Antonio is becoming more difficult. For people who earn a good income of course, the homes in San Antonio are very reasonable.

But for people who earn $3000 per month and don’t have credit, buying a home with conventional financing is very difficult. That is the reason I focus my San Antonio investment strategy on owner financing.

Here is a good example of an under market value property that I am selling right now:

  • Finance Your Investment Properties
  • 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: 69K
  • Cash Price on San Antonio Fixer Upper:  $42,000 CASH ONLY
  • Exit Strategy: Owner Finance with 5k in repairs: 5Kdown payment, $695.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 69K, see attached sold/rental comparables.
  • Sold and Rental Comps: Sold Comps 1301 S Hamiltonrental comps 1301 s hamilton

This property is only $42k cash, and with $5k in repairs, you can sell this with owner financing (you’re the bank), to a family with job and income but no credit. The major advantages of this type of deal are that you do not have repair expenses ongoing. Also, you can limit your initial out of pocket costs. If you were to rent this house out, you would have to do $20,000 in repairs, not $5000.

Owner financed homes is the backbone of my real estate investment portfolio in San Antonio. Each home earns at least 10% ROI with no expenses.  This type of buy and hold investing helps to support the working families of San Antonio as well, so it is a win win.

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SOLD – 1623 Chapman St., Seguin, TX 78155,

  • Finance Your Investment Properties
  • Address: 1623 Chapman St., Seguin, TX 78155
  • Year Built: 1956
  • Description: San Antonio buy and hold investors and real estate investors  – 2 beds, 1 bath, 660 sqft, lot size: .13 acres, estimated repairs: 30K, clean/lawn maintenance/interior paint/exterior paint, plumbing/electrical up to code, flooring, sheetrock/texture. Max After Repair Value: 89K.
  • Cash Price on San Antonio Fixer Upper:  $28,000 CASH ONLY
  • Exit Strategy: Owner Finance with 30k in repairs: 5K down payment, $895.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 89K, see attached sold comparables.
  • Sold and Rental Comps: Sold Comps 1623 Chapman St
  • For more information, please contact us. 

Seguin Investment Property Pictures:

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How To Do Only $5,000 In Repairs on a San Antonio Fixer Upper

One of the challenges of being a real estate investor is how to do investment property repairs affordably without going over budget. If you spend too much on your investment property repairs, you can lose all profit in your deal.

I have done many San Antonio property rehabs in the last 16 years. Some of them cost $10,000, $20,000, $30,000 and more. Those were rental properties, and while I was still able to make a positive ROI on most of those deals, I prefer when I can to limit the repairs on San Antonio investment properties to $5000 or so.

How do I limit repairs on an investment property to $5000, you ask?

Simple. I do not rent the property out. Renting out the property means you have to do extensive repairs of $15,000 or more and have the property inspected by the city in most cases. Spending that much on rehabs makes it harder for me to make money. Another problem with extensive repairs on investment properties these days is construction costs have shot up in San Antonio in the last 24 months.

So, rather than renting the home, I sell the property with owner financing to a blue collar family with a job but no credit. I get $5000 down, 10% interest, and a payment ranging from $695 to $995 per month usually.

The family usually have home repair skills, so they see it as a good deal to buy a fixer upper in San Antonio and perform much of the repairs themselves.

Basically, I just spend $5000 to do inside and outside paint, minor plumbing and electrical, clean up the lawn and get rid of junk. Then I sell it with owner financing. Buy and hold with owner financing is my preferred exit strategy. It allows me to increase my ROI and not have to maintain San Antonio investment properties.

Another advantage I have is that I own a construction company, so I am able to do repairs on San Antonio investment properties very affordably.

Below is a nice under market value San Antonio investment property deal that is great for an owner finance strategy:

  • 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: 69K
  • Cash Price on San Antonio Fixer Upper:  $42,000 CASH ONLY
  • Exit Strategy: Owner Finance with 5k in repairs: 5Kdown payment, $695.00 monthly PI/TI, 30 year amortization, 10% interest, Sales Price: 69K, see attached sold/rental comparables.
  • Sold and Rental Comps: Sold Comps 1301 S Hamiltonrental comps 1301 s hamilton
  • For more information, please contact us. 
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SOLD – 50K – 1319 S Hamilton St., San Antonio, TX 78207

  • 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 to be converted to a 3 bed 1 bath, booming San Antonio Market West of Downtown,  2 beds, 1 bath, 616 sqft, lot size: .05 acres, estimated repairs: 25K, clean/lawn maintenance/interior paint/front paint, room addition. Max After Repair Value: 109K, recommend to rent for 2 years then sale at Max ARV.
  • Cash Price on San Antonio Fixer Upper:  $50,000 CASH ONLY or hardmoney
  • 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 or rent out $795 section.
  • Sold and Rental Comps: Sold Comps 1301 S Hamiltonrental comps 1301 s hamilton
  • For more information, please contact us. 

More pictures of San Antonio investment property: