Attorney · Roanoke, TX · Member since 2010 · 29 posts · 13 votes
I am looking for some feedback from individuals who are active in the Houston market. I have been investing in DFW for a couple of years and since the market has gotten a bit overheated here we are looking to Houston. I'm originally from Houston and have quite a bit of familiarity with the area but after reaching out to a buddy of mine who is a broker he suggested that I focus on properties inside the loop.
Typically I've looked at post 2000 builds 3/2/2 in the $100-150k range that will cash flow $250-300 per door. Most of the success I've had with this criteria has been in the suburbs. Any thoughts on the burbs versus the loop and where should I be focusing? Also for those who are active in the market how has the oil price crash impacted prices. Would love to hear from and pick the brains of active investors. Thanks all.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
@Jeff Garrett By all means, concentrate on inside the Loop if you would like to buy properties where there is no hope of seeing any cash flow. Today I can help you get your hands on one of these in the Loop gems that are currently on the market.
How about a duplex in Montrose that generates $3100 in rent per month? Asking price is $575,000.
And then there's the 4plex in Montrose that generates about $3000 a month in rent. They're only asking $635,000 for that. Oh, and the tax bill is $11,000 per year.
If you prefer the Heights, you can pick up a 3 plex that generates a whopping $6000 a month in revenue for the low, low price of $930,000. Tax bill on this beauty in $23,000.
My favorite is the rundown 8 unit complex in the Heights that generates $3200 in rents. Asking price is $1,000,000. But the value is in the land.
I concentrated on multifamily properties because that's what my investor clients are generally looking for. But SFHs inside the Loop are similarly inflated. The average price of every SFH on the market in Montrose today is $836.000.
All kidding aside, I tell my clients to stay as far away from the Loop as they can. The numbers just don't make sense.
Based on what you want, the perfect places for you to find something are the Katy area (north of I-10), Cy-Fair, and Bear Creek. These areas have great schools, post-2000 construction, high rental demand, and in your price range.
If I can assist you in acquiring properties here, please feel free to PM me or contact me at my email or phone number on my profile.
Property Manager · Allen, TX · Member since 2015 · 190 posts · 160 votes
10y
For post 2000 construction 3/2/2 I would definitely focus in the suburbs. I've focused on similar properties in the past and all mine are in the Katy/ Cypress area. You'll be able to find some available in the Spring area as well. Much like DFW, the Houston market is overheated as well. There are still deals to be had under 150k, but there are fewer than in years past. The oil downturn hasn't affected sales prices yet, but if oil stays down much longer I would expect that to change.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
@Jeff Garrett By all means, concentrate on inside the Loop if you would like to buy properties where there is no hope of seeing any cash flow. Today I can help you get your hands on one of these in the Loop gems that are currently on the market.
How about a duplex in Montrose that generates $3100 in rent per month? Asking price is $575,000.
And then there's the 4plex in Montrose that generates about $3000 a month in rent. They're only asking $635,000 for that. Oh, and the tax bill is $11,000 per year.
If you prefer the Heights, you can pick up a 3 plex that generates a whopping $6000 a month in revenue for the low, low price of $930,000. Tax bill on this beauty in $23,000.
My favorite is the rundown 8 unit complex in the Heights that generates $3200 in rents. Asking price is $1,000,000. But the value is in the land.
I concentrated on multifamily properties because that's what my investor clients are generally looking for. But SFHs inside the Loop are similarly inflated. The average price of every SFH on the market in Montrose today is $836.000.
All kidding aside, I tell my clients to stay as far away from the Loop as they can. The numbers just don't make sense.
Based on what you want, the perfect places for you to find something are the Katy area (north of I-10), Cy-Fair, and Bear Creek. These areas have great schools, post-2000 construction, high rental demand, and in your price range.
If I can assist you in acquiring properties here, please feel free to PM me or contact me at my email or phone number on my profile.
Houston, TX · Member since 2016 · 71 posts · 23 votes
10y
Great feedback and perfect amount of snark! I enjoyed reading that, I'd like to connect and talk about what I'm looking for in the areas you mentioned out west. Cheers!
Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes
10y
I agree with Fred Heller, I don't think you'll find anything for 100-150 inside the loop post 2000. As far as oil prices go, I would think the affects on value will be more severe on those who have rental properties deep in the suburbs- such as the new build master planned communities in far west katy, nw spring into cypress. The reason being, the cost of these homes is often too high to justify the rents. Generally you want rent to be at the very minimum 1% of your market value, otherwise it's not worth it- to most investors.
Example: Buy and make rent ready all-in price: $100,000
Target rent: At least 1,000/month
That's just an example. Some investors want more, which is attainable in Houston, but I know from speaking to clients that on average, 1% is about as low as anyone will go.
Attorney · Roanoke, TX · Member since 2010 · 29 posts · 13 votes
10y
This is what BP is all about and why I am so grateful I found it. Thank you to everyone that has replied. I'm a Texas licensed attorney and have my salesperson license pending. Would love to meet any other active investors next time I'm in Houston. Coffee on me for anyone that is willing. Also, if there's anyone who has any questions about DFW where my focus has been the last few years or if I can help anyone in any other way let me know.
Lender · Katy, TX · Member since 2016 · 47 posts · 48 votes
10y
Houston is so diverse, it really depends on the submarket. Areas that have been more effected by the fall in oil prices are Katy and The Woodlands (especially higher end homes). On the other hand, areas like Sugar Land and Pearland have been less affected due to their accessibility to the medical center. East Houston has been a strong rental market, but will be interesting to see how it holds up as a lot of the construction jobs from the expansion of the refineries starts to fade.
If you decide to enter the Houston market, please keep in mind that the north and west suburbs do have cheaper insurance rates due to their distance from the coast. However, some of those saving ma be lost with increased taxes with the better ISD's.