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.

Why Buying Section 8 Rental Property With Cash Is a Great Buy and Hold Strategy

The new wholesale property investor in San Antonio needs to decide if he wants to flip property or buy and hold property. My business is set up primarily to buy and hold property; for the last five years or so, I have especially focused on San Antonio buy and hold property with owner financing.

Owner financing San Antonio properties has the following advantages for the out of state property investor:

  • There are no maintenance problems as with regular buy and hold investing
  • The owner of the under market value property maintains it
  • You simply enjoy the cash flow of the investment property.
  • You help to beautify the community and put a hard working family into a home they own.

Now that is has been my bread and butter way of buying and holding real estate in San Antonio over time with 13% or so returns.

However, there are times where you may want to do buy and hold rental property in San Antonio TX. Some of the most common reasons that we see with our out of state property investors is:

  • They have a high income of $200,000 or more and they want to reduce their taxable income.
  • With rental property they are able to enjoy depreciation and tax write offs.
  • You cannot do this with owner financed property.

When I decide that I want to buy and hold rental property, one of the things that I often do is section 8 rentals. Now, some San Antonio real estate investors may recoil from Section 8 rentals, but to me, there is hardly anything better in rental properties! Section 8 is managed by the Department of Housing and Urban Development, and can be a good deal for the rental property investor. Here is why:

  • Payments are always on time and very convenient: Rents are received every month on time via direct deposit.
  • Protection from financial hardship: No more worries about your renter losing his job. Most section 8 tenants get a  voucher that covers most or all of their rent.
  • Rent is higher: In my houses, I often will get a section 8 rent for $1200 when I might have only gotten $1100 from a conventional renter.
  • Easy marketing: Section 8 uses GoSection8.com which allows me to post San Antonio rental properties and to review applicants for no cost.
  • Minimal vacancies: There is a large demand for section 8 in SA TX.

Oh, there is one other major advantage of section 8 – attention flippers in San Antonio!

Flipping houses is fine and can be profitable, but what if it does not sell? Then you have a rehabbed property and you have trouble getting your profits.

So rent it section 8! When you rent it out with section 8, after it is occupied for at least 6 months, you can do a cash out refinance on it and pull out as much as 80%! Then you can do more San Antonio rental properties. Not a bad deal, huh?

 

What Is the Buy and Hold Real Estate Strategy?

Many real estate investors in San Antonio and elsewhere in the US debate whether they should do buy and hold property or flip property. Personally, I believe in flipping properties to build capital, and then doing buy and hold real estate investing for the long term.

To put it succinctly, the buy and hold real estate strategy is the concept of buying under market value real estate investments, fixing them up enough to get them rented or resold without overdoing it, and holding the San Antonio wholesale property for the long term and collecting the cash flow.

I generally prefer buy and hold real estate over flipping property for a long term strategy. The reason for this is that buying and holding real estate is a truly passive activity if you do it right. If you get the right tenants or owner finance buyers in the property, the wholesale property will pay you month after month and you will not have to do much to it.

On the other hand, flipping property involves constant work on rehabs and if you get caught in a downturn, many investors end up losing money, and have a property where they owe more than the property is worth.

If you are going to do buy and hold investing with San Antonio investment property, here are some quick tips to get the best cash flow:

  1. Find the right under market value property: You want to make sure that you are buying a San Antonio wholesale property that is under market value by at least 20%, in my opinion. Where many buy and hold investors lose out is by buying a property that is too expensive and the cash flow is non existent or even negative if repairs crop up. You will always end up losing money if pay too much at the closing table.
  2. Be sure the numbers on that wholesale property make sense: Cash flow is king in this strategy. You want to be certain that you will be cash flow positive after you pay all expenses each month, accounting for repairs and vacancies. On my rental properties in San Antonio, I put aside $100 per month on my $75,000  houses to make sure I have enough to pay for repairs. On my owner finance houses, the buyer maintains it and I just collect the cash flow. On my houses that are worth 75-100k rehabbed, I am making at least 1% of their value in rent, usually a bit more than that. So even with a mortgage, I would be making $300 or so in cash flow per month. I actually buy mine cash though.
  3. Screen buyers and tenants with care. You have to be certain that you take your time when you screen your tenants and buyers. I am very careful who gets into my houses. I check their employment, work history, bank statements, pay stubs, credit history and criminal record. My section 8 tenants have to be totally vetted for them to get in. And my owner finance buyers rarely have to be foreclosed upon because they have long term steady jobs.

I own many long term buy and hold properties, and I always pay under market value, never over rehab them, and I always end up with positive cash flow.

If you are thinking about investing in buy and hold real estate and have limited capital, say, $100,000 or so, one great strategy is to buy two buy and hold properties in San Antonio with 20% down conventional financing, do the repairs and then rent them out section 8.

After the house has been occupied for a year or so, you can do a cash out refi and get up to 80% of the current value, which on a 100k asset could be about 80k. Then take that money and do another rental property.  I have a large portfolio of buy and hold San Antonio properties myself, and I can show you how to build a 20 house or more portfolio that produces great cash flow. And then, if you want after 5 years, you can package up that portfolio of turnkey rental properties and sell them to a cash investor in California.

That is a great way to generate long term cash flow in rental property. Below is a property perfect for this strategy.

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    • Address: 2229 W Hermosa Dr.  San Antonio, TX 78201
    • Year Built: 1948
    • Description: Under market value property sale in hot north of downtown neighborhood, 2 beds 1 bath, 769 sqft, built: 1948, lot size: .14 acres yearly taxes: $1,200.00, estimated yearly insurance: $800.00, estimated repairs on this distressed sale.
    • Rehab Option#1: 35K, includes new HVAC, converting to 3 BR, updated kitchen, flooring, paint in/out, exterior skirt, roof, room addition, appliances, paint out door storage exterior, trash, lawn maintenance.
    • Max After Repair Value: $139,000.00 with owner financing, comps are for 3/1.
    • Rehab Option #2: 15k  with Owner Finance ONLY – AC, flooring paint in and out $109,000 ARV.
    • Cash Price: $69,900 firm.

 

What Is a House Flipper?

If you are new real estate investor in San Antonio or anywhere else, you may be considering doing San Antonio flips to build up your cash to do more real estate deals.

As an expert San Antonio wholesale property investor for 15 years, I’ve done hundreds of rehabs and have flipped many San Antonio properties. But before I go any further, if you are new to this discussion of real estate investing:

What Is a House Flipper?

This is a type of real estate investing where you buy a property (ideally under market value) with the intention of rehabbing it to a certain degree and reselling it for a profit. The profit is gained either from an appreciation of the price due to a booming real estate market, or from the capital improvements you make.

When I flip houses in San Antonio TX, I always make sure of the following for best results:

  • I buy affordable homes from $30,000 to $75,000.
  • I buy them at least 20% under market value.
  • I do $10,000 to $30,000 in rehab, depending upon the neighborhood. It is critical to fix a San Antonio flip property enough to sell it and get maximum ARV but not to overdo it.
  • I am happy to make $8000 to $10,000 per San Antonio flip as of April 2016.

If you are researching about flipping houses you may also want to know what is the 70% rule in real estate? This is a common rule that you hear in real estate flipping. It means that you should pay 70% of the ARV of the property, minus the repairs. That is the most you can afford to pay for that under market value property.

So, if the ARV of the house is $100,000 and needs $30,000 in repairs, the 70% rule states that you should pay a maximum of about $45,000 for that property. If you overpay for the property, your chances of making much money on a flip are much less.

I do not necessarily follow this rule precisely in all cases, but yes I know the maximum I likely can pay and still make my desired profit on a flip – $8000 to $10000.

Below is a nice flip that we did with a pair of local San Antonio investors. This worked out very nicely for them. If you do not overpay for the house and do not overrehab, your profit margins in San Antonio flips can be excellent!

 

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$50,500 purchase price, $25,000 rehab, resold with $18k profit, DOM 130.

This under market value manufactured home is located near Canyon Lake, about 15 miles NE of San Antonio. It is a peaceful and beautiful part of our area. It was a distressed property sale that worked out well for the investor.

Our principal sold this property to a family of rehabbers in San Antonio for $50,500, who then did the $25,000 of rehab themselves:

  • Kitchen: $2100
  • HVAC repair: $300
  • Electric Fixtures: $900
  • Interior repair and paint: $4500
  • Exterior Repair and Paint: $3250
  • Exterior skirt: $800
  • Tree trimming: $500
  • Roof repair: $300
  • Plumbing: $500
  • New Water Heater: $2010
  • Bathroom: $1000
  • New floors: $2200
  • Dumpster: $1000
  • New Appliances: $1550
  • Rotten wood removal: $895
  • Deck repair and stain: $900
  • New mulch: $250
  • New windows: $2000
  • New Mail box: $100

Their total investment cost was $75,555, with a sold price of $99,970.

After commissions and closing, they had a profit of $18,000. Investors complimented us on providing them with a profitable first deal and accurate rehab numbers.

 

 

 

Why Investors Who Obsess About Interest Rates and ROI Lose Money

Obviously it is important in San Antonio real estate investing to make a good return on your investment dollar. In my 15 years of investing in San Antonio investment property, I have averaged about $8000 profit on flips on under market value properties, and approximately 12% ROI on San Antonio buy and hold deals.

However, if you as an out of state property investor obsess too much on ROI, how much you will make on that flip, or the interest rate that you are paying on your borrowed capital, it can talk you out of doing profitable deals, and that is a big mistake.

In the last month, I have seen investors talk themselves out of doing profitable deals – I am talking about clearing $10,000 on a flip in particular. This under market value San Antonio property is a good example:

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    • Address: 2229 W Hermosa Dr.  San Antonio, TX 78201
    • Year Built: 1948
    • Description: Under market value property sale in hot north of downtown neighborhood, 2 beds 1 bath, 769 sqft, built: 1948, lot size: .14 acres yearly taxes: $1,200.00, estimated yearly insurance: $800.00, estimated repairs on this distressed sale.
    • Rehab Option#1: 35K, includes new HVAC, converting to 3 BR, updated kitchen, flooring, paint in/out, exterior skirt, roof, room addition, appliances, paint out door storage exterior, trash, lawn maintenance.
    • Max After Repair Value: $139,000.00 on this fixer upper with owner financing, comps are for 3/1.
    • Rehab Option #2: 15k  with Owner Finance ONLY – AC, flooring paint in and out $109,000 ARV.
    • Cash Price: $69,900 firm.

On this San Antonio flip deal, the investor will make in the area of $10,000 on a flip, or maybe $6000 or $7000 if they have to borrow hard money. Now some people think that is too little to bother with. Oh my goodness! They are so  wrong. When I first started in San Antonio real estate investing, I did 50 houses in my first year.

We’ve had investors borrow millions from private investors and they split the profits  50/50 when each project was completed. Now I only ended up making $3000 or $5000 per flip when I sold them. But I didn’t worry about such a ‘small’ amount of profit, because I made – get this – $100,000 in my first year in San Antonio wholesale property investing! And I re-invested 80% of that profit.

Let me be clear: Investors who laugh off making $5000 or $10,000 on a San Antonio flip are being foolish. True, if you only do 1 flip a year, you are not going to be able to build capital very quickly. So, you need to do at least 4 per year, or ideally, 10 or more. Then you take that $5000 or $10,000 per deal and invest it again into San Antonio flips or San  Antonio buy and holds.

I have dealt with well-meaning but short-sighted investors who actually were going to scuttle $10,000 profit flip deals because they were going to possibly have to borrow 14% rate hard money. Of course it is smart to borrow the cheapest capital that you can – ideally private money or a line of credit on a piece of property you own.

Failing that, hard money is often the only option. While it is true that you will pay high interest and fees – possibly up to $4000 per deal – why on earth would you nix doing deals if you still stand to profit? Which is better, making $6000 or making zero? I know what I’ll go with!

At the end of the day in San Antonio real estate investing, focus on your total profit, not on the interest rate and fees you are paying. If you are making $5000 on a flip, I’d be happy with it and do 10 more this year.

Update: This week we had a buyer walk away from a deal that would have made her $8000 or so because she refuses to use hard money. So, rather than make $8000, she makes nothing.

The Most Important Thing I Tell New San Antonio Investors Is…

I talk to many new San Antonio real estate investors every week, and I am talking to more than ever this past month. San Antonio TX is now on the radar for a lot of out of state property investors.

There are many new San Antonio wholesale property investors coming into the market every month. The reason is that San Antonio is booming.

Real estate prices are up but still affordable. The population is growing, unemployment is low, and wages continue to rise. Houses are selling quickly in the hot parts of town as well.

And while the prices are higher than two years ago, it still is very possible to make positive cash flow on under market value San Antonio properties.

If there is anything I would tell the new San Antonio real estate investor it would be this:

Don’t be greedy, and have realistic expectations!

I often talk to investors from out of state who are used to investing in more expensive areas, and earning $25,000 on a flip. Or I’ll talk to a Midwestern investor who thinks he can make 20% on a buy and hold here.

I’ve been working as a real estate investor in San Antonio real estate since 2001, and I have made many millions of dollars by making $7000 on a flip and $12% per year on a $650 per month buy and hold.

I am very happy to make those types of returns. I basically do lots of these small San Antonio investment property deals each year. Each flip makes me $7000 or $10,000, or each buy and hold makes me 11% or 12% per year, and I am fine with that.

Too many investors focus on doing a few grand slam deals each year. What they should be doing in San Antonio real estate investing is making a solid return on dozens of deals each year!

If you want to make $25,000 or $50,000 on a flip, you need to move into big projects, ones that go for $200,000 or more. And that my friends gets a lot more complicated and expensive than my little $50,000 or $60,000 San Antonio wholesale property deals.

It’s also more risky. In 2008 when the market tanked, I got stuck with a bunch of $1 million San Antonio real estate investments that were no longer worth what I paid for them. That’s what can happen when you are trying to flip expensive homes at or near market value.

Buying little under market value San Antonio houses such as mine is a lot safer. You just have to be happy making $10,000 on a flip.

I currently have several good $10,000  San Antonio flips available, and these are excellent returns that you can make a lot of money on. You should not pass on a deal because you will not make $30,000 on a flip. I advise doing at least 4 per year and making 40-50k. Then use that cash to buy San Antonio buy and hold property.

Below is an excellent 10k San Antonio flip property you should consider:

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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: $69,000.
    • Exit Strategy: Owner finance this out of state investment property with positive cash flow with only $10,000 in repairs completed in 30 days – $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: $15,000 in repairs and flip/resell retail – maximum ARV is $99,000. Profit $10,000.

 

15% ROI Case Study on $25,000 Fixer Upper San Antonio Property

The San Antonio real estate market is hot, but there are still excellent, affordable San Antonio real estate investments available for the smart San Antonio wholesale property investor.

I found the property 1918 Santiago 78207 in an estate sale, and it was sold to a California investor for $25,000:

Entry

As you can see, this under market value property needed some work:

Front

However, it is located in a growing and revitalizing area just a few miles west of downtown. So, my out of state investment property investor bought it and put $25,000 of rehab into it:

  • Updated kitchen: Countertop, sink, fixtures, cabinets: $1200
  • HVAC: Installation of 3 ton A/C: $3800
  • Electric: Upgraded all exterior and interior fixtures, all plugs up to code: $2900
  • Interior finish: Sheet rock, paint, doors, trim, hardware, closets and cabinets: $4400
  • Bathroom: New toilet, vanity, mirror, tile/bath/shower walls: $1500
  • Flooring: Laminate flooring in living room and four bedrooms, tile in kitchen, bath, utility: $3650
  • Exterior finish: Paint, dry rotted wood replacement, re-stucco sides: $3300
  • 40 yard dumpster: $1200
  • Plumbing: Up to code: $2200
  • Microwave and vent: $850

The house sold in March 2016 for the following terms:

  • $74,700 final price
  • $750 per month including taxes and insurance
  • 10% interest
  • 30 year note
  • No pre-payment penalty
  • Total ROI: 15%

After rehab pictures:

photo1 photo2 photo4 photo8 photo9 photo10 photo12

This San Antonio real estate investor is making 15% per year on a $50,000 investment.

 

Hot San Antonio Real Estate Investment Market Continues in 2016

Anyone involved in San Antonio real estate investing or real estate in general knows that San Antonio real estate has been hot for the last few years. As a San Antonio real estate investor myself, I have done very well here for 15 years, and the market in the last two years has been strong.

sa2

There are several factors that make San Antonio real estate investments a good bet for the long term:

  • Strong job growth of 3.5%
  • Low cost of living
  • San Antonio’s relative low reliance on oil revenues
  • Strong population growth
  • Pro-business local government

All of these things make San Antonio a solid, long term bet for under market value real estate investing. I have found that even in downturns, the market in San Antonio never drops too much. I always have been able to buy San Antonio real estate investments that produce cash flow.

As for 2016, the news is almost all bright. The San Antonio Board of Realtors reported in February that the San Antonio area had a 10% year over year increase in total sales, as well as a 4% hike in average prices.

Right now, interest rates are low, foreign investors and out of state investment property investors have a strong appetite for real estate investments in Sn Antonio, and job growth is strong. The 3.5% growth rate in jobs in San Antonio bodes well for a continued expansion.

However, on the down side, rising home prices in San Antonio are not always great news. The inventory of available homes is under six months which is quite low considering the growth in population. This could eventually cause a price spike that could lead to a slow down in growth.

That is why I have long believed that as a San Antonio real estate investor, investing in under market value affordable homes is such a smart move. There always is strong demand here for quality homes under $130,000. Usually, the San Antonio real estate investors who get in trouble are investing in more expensive properties above $200,000. Those are the houses that usually decline in value in a downturn and leave flippers in trouble.

I, on the other hand, always buy houses 30% under market value in the $30-75k range, which is very safe even in a downturn.

Given the hot state of San Antonio real estate, now is a good time to flip San Antonio properties, as long as you have realistic expectations of your return. The below property will make you at least a $10,000 return in 60 days.

thumb_IMG_4878_1024

    • Address: 1723 W Ashby Pl  San Antonio, TX 78201.
    • Year Built: 1925
    • Description:  Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 35K, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
    • Max After Repair Value: $139,000.00
    • Cash Price: $65,900 firm.
    • Exit Strategy: Owner Finance with 35K repairs: 5-10k down or more, $1,295.00 monthly P/I, 30 year amortization, 10% interest. Or 15K rehab, new HVAC, paint in/out, kitchen/bath repairs, plumbing/electric up to code, then FSBO at 109K, 10% interest, $1,100 monthly PI/TI, 30 year amortization.
    • Alternate Exit Strategy: Flip with $35k in repairs. $10,000-15,000 profit depending if you are all cash or use hard money lender. Rehab completed in 45 days or less.

How To Build Wealth Through San Antonio Real Estate Investments

If you are a potential out of state property investor and want to build wealth through San Antonio real estate investments, there are a few things that I think might give you some guidance and reassurance:

#1 San Antonio Is a Great Market for Under Market Value Real Estate Investing

This is a pretty unique market:

  • Real estate is still inexpensive, with San Antonio real estate investments in my areas going for $40,000 or $50,000 wholesale.
  • The economy is strong, with annual job growth in the 3-4% range.
  • The local market is not oil dependent, so San Antonio real estate investors do not have to worry about a boom/bust cycle.
  • The population is growing here year after year as is the number of jobs.

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All in all, San Antonio is really good for real estate investors. It is a stable, growing market, and I did very well here in the last downturn.

#2 There Are Still Many Excellent San Antonio Real Estate Investment Deals

Another unique thing about San Antonio for real estate investors is that it is an old city, with a large stock of older homes built in the 1920s to 1940s. I have been investing here for 15 years, and I still drive down streets in my area that I have never been down before.

If you are a new San Antonio real estate investor, you may have trouble finding deals in all the normal places new investors look. One advantage of working with me is that I am at the level where I hire wholesaling companies to work for me and to find potential deals for me. My job is pretty easy when I have people send me San Antonio wholesale property. I just have to inspect the best deals and make offers.

You could spend hours and hours on your own trying to find your own San Antonio wholesale deals, or you could just buy mine.

I also have other real estate investors in San Antonio and agents send me deals because they know who I am, and they also know I close with cash in 10 days.

#3 I Recommend Flipping Properties to Build Capital and Then Buy and Hold

Some people like to flip and some like to buy and hold. My personal portfolio is mostly San Antonio buy and hold properties with owner financing, and a few rentals.

poplar 1

However, I do believe in this model for people who have limited capital:

  • Buy a $50,000 San Antonio wholesale property either cash or with hard money; do $25,000 or so in rehab, and flip it for a $10,000 to $12,000 profit. You will need to have $20,000 to $30,000 cash to get rolling in this plan.
  • Do 3-4 of those per year, or more if you can.
  • After two years, you could have $100,000 or more. Use that money to buy San Antonio real estate investments to buy and hold – either buy in cash or do 20% down conventional finance.

This is a great, basic blueprint to build wealth in San Antonio real estate investing.

#4 San Antonio Wholesale Property Deals Are Profitable But…

I see many San Antonio real estate investors never do more than a deal a year because they are trying to make too much money on a single deal.

I have made millions of dollars in my San Antonio wholesale property career by doing San Antonio property flips for $5000 or $7000. I never understand why so many real estate investors get greedy and want to make $20,000 or $30,000 on a flip. I do 50 San Antoniio property flips per year and make $7000 each. That’s $350,000! Works for me!

Or, I do San Antonio buy and hold deals for $600 per month. When I do 10 more of those per year, that’s another $70,000 of income. I have no problem with that.

You have to have realistic expectations when you are buying and selling San Antonio investment properties. The prices are low, but you only are going to make so much money on one $60,000 house. Don’t get greedy, and you can do very well.

I have had several out of state property investors walk away from this fantastic San Antonio flip or buy and hold deal. They want to make too much money. You can make $15,000 on this flip in 60 days. Or, 13% per year on a San Antonio buy and hold.

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    • Address: 1723 W Ashby Pl  San Antonio, TX 78201,
    • Year Built: 1925
    • Description:  Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 35K, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
    • Max After Repair Value: $129,000.00
    • Cash Price: $65,900 firm.

How I Make Big Profits on San Antonio Buy and Hold Property

Many wholesale property investors in San Antonio and other areas are big into flipping properties for wealth building.

It is true that flipping houses in San Antonio can be profitable, and I sometimes do San Antonio property flips. However, the majority of my wealth building over time as a San Antonio real estate investor has been with San Antonio buy and hold property.

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This buy and hold property makes the investor in San Antonio 13% per year.

Below are simple steps to follow to buy a profitable buy and hold property as a San Antonio real estate investor:

#1 Locate the Right Buy and Hold Property at the Right Price

I always try to buy wholesale properties in San Antonio that produce 12-15% ROI per year, either through renting or owner finance. I also like to buy under market value San Antonio properties on the edges of neighborhoods that have houses worth $300,000 or more. The interesting thing about San Antonio wholesale property is that you can find $60,000 under market value fixer uppers just a few streets away from much more expensive properties. Those are the areas I target.

Here is a good example.

#2 Do the Numbers Make Sense?

Cash flow truly is king in buy and hold investment properties. You need to carefully determine how much you keep every month after you pay all expenses.

Many wholesale property investors buy and hold rental properties, and I have done some of that. However, I like to buy my under market value properties in cash, and then owner finance them.

The advantage to this type of buy and hold property investing is that the buyer of the house maintains it, and I just carry the mortgage on San Antonio real estate investment.

If you are doing buy and hold rental properties with a mortgage, really make sure that you are going to see positive cash flow, after all expenses, vacancies and repairs. If you are just barely paying the mortgage when you are fully rented and you have no major repair expenses, trouble awaits!

#3 Make Money at Closing

The biggest reason many buy and hold investors lose money is that they pay too much for the house. You MUST buy the house under market value to produce cash flow. You want to buy a San Antonio buy and hold property at least 20% under market value.

My investor paid 30% under market value for this house and now makes 16%.

#4 Manage Tenants Right

I buy and hold properties with owner financing, so I don’t have many tenants. But if you do rental properties, you have to very carefully screen tenants. You also can hire a property management company to handle your tenant screening and property repairs.

Of course, many buy and hold investors lose money here…..they pay too much for property management and they have no cash flow. Once again, this is where I recommend as a san antonio real estate investor buying properties in cash and owner financing them.