Closing on first SF Rental Tomorrow

The route to our first property wandered through a lot of plan changes, but ended up in a place that fits the model I envisioned for investing in SF rental properties and gave the added benefit of learning a whole lot about commercial multi-family properties as well. I will eventually be involved in both.

The first house details:

Location: San Antonio, Texas 

The house is a 4/2/2 in a nice neighborhood, nice cars in nicely maintained yards, with curious folks walking dogs and checking us out during the inspection and contractor visits.

I'm buying it with a conventional 20% down loan and it needs a little less than $5k in repairs and upgrades (1981 build). All in I'm putting up $23k and after extracting mortgage and escrow for insurance and taxes will get $492 per month cash flow. I'll set aside 10% for future maintenance and have plenty of reserves on my own to handle any surprise issues while that builds.

We live in Austin, but the market here is so strong that it's difficult to find good cash flowing deals. Not impossible, just difficult. Eventually we'll find something here, but I found out that San Antonio has a huge market of very viable rental properties and I just have to make the sacrifice of driving 1.5 hours to San Antonio for my business.

How did I find this deal? It and many others were sent to me through the real estate investment group my wife and I joined. In my first blog post I outlined my goals, and in the comments, someone suggested checking out "Lifestyles Unlimited." I did, and found a serious, committed group that helps investors meet their goals. They educate investors in two specific areas of investing - Single Family and Apartments. The SF rentals are purchased at a discount to market (and often distressed) and improved to a good quality level to offer to tenants at rates just below local market rates. Their MF area of investing again seeks to purchase at a discount or where analysis shows opportunity to increase rents exits. Then through property and operational improvements they provide a quality living area for tenants at competitive rates that results in significant increases in NOI. Their mantra is "Best Product, Best Price!"

There is naturally a cost to joining a group like this, but I'll recoup that cost in the equity gained in just two SF deals. What sold me is the team of realtors who find deals for members. As an engineer with assets but little time, this allowed me to concentrate in closing and managing deals rather than spend a lot of time seeking the deals. Just that aspect alone made the membership worthwhile to me. They have offices serving Houston, Dallas, and San Antonio/Austin.

I'm happy with them but I don't work for them so if you're interested, you can use google and do your own research as I did.