Investor · Monrovia, CA · Member since 2017 · 6 posts · 2 votes
I am an CAli investor considering a out of state 2-8 apartment building in San Antonio TX. I will hire property mgt.
I noticed a lot of brick and old places. Should I be cautious about repair cost in that seasonal climate or geo area? A living place is a living place. Roof, HVAC, Plumbing & fixtures, Doors & Locks. floors, paint, etc..
Also being such a populated city (over a million people) does a bad economy take vacancies up and rents down more so than a less populated. What do you think about San Antonio's economy? Growing and more affluent jobs?
Where can I learn more about San Antonio real state investment?
Real Estate Investor · San Antonio, TX · Member since 2016 · 143 posts · 167 votes
9y
Steve Watson
San Antonio is booming right now and will be for years to come. We also have a very diverse economy here primarily anchored by the multiple military installations which have kept San Antonio very stable. Currently, the city leadership is making a push to bring more high paying tech jobs to the city. For example, Rack Space is based here. Hulu is getting ready to set up shop and Microsoft is building a new data center on the west side of the city.
I would just caution you about 2 things:
1. The property taxes here are high since there is no income tax in Texas. That can be a challenge for out-of-state investors.
2. We have issues with expansive soil here. Many properties that you will encounter will quite possibly need foundations repair. So be sure to do your due diligence or have a team with boots on the ground that can.
Best of luck to you
Real Estate Investor · San Antonio, TX · Member since 2016 · 143 posts · 167 votes
9y
Steve Watson
San Antonio is booming right now and will be for years to come. We also have a very diverse economy here primarily anchored by the multiple military installations which have kept San Antonio very stable. Currently, the city leadership is making a push to bring more high paying tech jobs to the city. For example, Rack Space is based here. Hulu is getting ready to set up shop and Microsoft is building a new data center on the west side of the city.
I would just caution you about 2 things:
1. The property taxes here are high since there is no income tax in Texas. That can be a challenge for out-of-state investors.
2. We have issues with expansive soil here. Many properties that you will encounter will quite possibly need foundations repair. So be sure to do your due diligence or have a team with boots on the ground that can.
Best of luck to you
Real Estate Agent · San Antonio, TX · Member since 2017 · 104 posts · 89 votes
9y
Like Ian was saying, foundation issues will be the most common problem that you will find due to the local geology. If the foundation needs repaired, you'll most likely suffer some plumbing issues that will need to be corrected after the foundation is leveled. Roofs also tend to have a shorter life expectancy due to the high heats and weather extremes.
You can find better cash flow in other markets, but San Antonio has some great economic conditions that help with long term growth.
Are you looking for older properties with value add potential or would you prefer to acquire a multifamily property that's turnkey in order to buy and hold with minimal CAPEX?
Investor · Monrovia, CA · Member since 2017 · 6 posts · 2 votes
9y
From an out of town investor, I feel that value add potential may be more difficult versus in town control of contractors. More of a turnkey property would be desirable.
I visited San Antonio in June for the first time. My wife and I enjoyed the river walk. We did look for SFH while we were there. But multi-tenant housing seem to be cash flowing at this market high.
Cash flow is what I want. Do you know of another market?
Houston, TX · Member since 2015 · 16 posts · 6 votes
9y
Great post and questions @Steve Watson. I'm looking forward to following this thread as I am also interested in the potential San Antonio posses for investors.
From an out of town investor, I feel that value add potential may be more difficult versus in town control of contractors. More of a turnkey property would be desirable.
I visited San Antonio in June for the first time. My wife and I enjoyed the river walk. We did look for SFH while we were there. But multi-tenant housing seem to be cash flowing at this market high.
Cash flow is what I want. Do you know of another market?
I'm not sure we've reached our absolute peak however, I do agree that we are close. There's still opportunity in the San Antonio/New Braunfels market to find duplex properties in the $200K range collecting rents around $1,000 per door in class B neighborhoods. If you're comfortable with class C properties, you'll find that they will cash flow more for you, but there's generally higher capital expenses with these properties due to differed maintenance and the other issues that sometimes come with this class of property. Property Management is generally harder to find for class C or any property collecting under $1,000 per door, but there are managers out there willing to take on class C portfolios.
Right now new construction duplex properties are selling for around $350k-$400k (rents $1,495 per door). A new fourplex community will be breaking ground in the first quarter of 2018 on the West side of town (near Sea World), and those will be priced at around $600K. Most of the new construction in the San Antonio/New Braunfels area is being purchased by 1031 buyers from out of state.
The San Antonio market has properties that will suit most any investor and has the benefit of a job market that's fortified with multiple sectors (government, tech, manufacturing and healthcare).
Feel free to contact me if you would like to discuss further.
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
9y
If you are not sure about out of town owning of properties, you could always do some private lending to investors. There are so many avenues that you can pursue in this vein. Short term under a year, medium term with 5 year balloon, longer term 10 to 20 year terms. You can get better than market rates for the longer terms and probably 10 to 12% for the shorter terms.
You might want to be the private lender who keeps a small percentage of the profit of flips or even longer term holds in addition to the stated interest rate. There are so many possibilities, just open up your mind.
Investor / Syndicator · Austin, TX · Member since 2015 · 366 posts · 220 votes
9y
@Sterling Williams I own a duplex there and it's doing pretty well. I've noticed for several months however that there are NO existing duplexes or four plexes in New Braunfels on the market. So, it's hard to find comps for my property. Any ideas? I've just been looking at the new construction and backing off a bit for age. NB is a great area to invest! Creekside is amazing. If I were to live in NB, I think I'd want to be close to there.
Real Estate Agent · San Antonio, TX · Member since 2017 · 104 posts · 89 votes
9y
@Mike Krieg Yeah, inventory has been a little low in San Antonio and New Braunfels. I just sold three 2/2 duplexes on Misty Acres in NB for $215K a piece, appraised value was around $225K. If you want, send me the property address and I'll see if I can pull up some recent comps for you.
Investor Agent · San Antonio, TX · Member since 2013 · 79 posts · 210 votes
9y
@Steve Watson I have been an active investor in the San Antonio market for several years now and my take on the whole MF vs. SFR right now is EVERYONE wants an MF property right now. The issue with this is that the vast majority of MF owners are of the investor mentality them selves. They understand the value of MF and will only let go of the property if the right price presents its self. Unfortunately, the vast majority of those people are the out of state owners just because they are not used to the prices and cash flow that San Antonio should produce. I have seen MF price double in price in the last two to three years only because it's MF and Texas is red hot for investment.
I think all of Real Estate is pretty over valued right now just because of the nature of the market cycle but I think MF is the most over valued of all. While I think if you are able to put enough down you are going to be fine from a cash flow stand point I just think you are going to find better returns in SFR right now. Also from a long term equity play, I think SFR is a better play right now as well.
While I have seen SFR prices swell from the 150's to the 190's over the last few years I have seen class C duplex's go from 100K to 175K in the same time frame. What goes up must come down to its equilibrium and I think the smaller MF properties have further to fall than SFR do.
Also look at your buyer pool. SFR properties are the most liquid properties out there just because families would rather own a home over a smaller MF. So they are going to be quicker to recover from an economic down turn just because there is a much larger buyer pool.
I have not been able to locate hardly any MF properties that can produce higher returns than SFR right now just because of the competition level for those properties.
If you would like, shoot me a PM and I can send you a breakdown by zip code on my take of the entire city. I also put out a market report every month that I could send to you as well.