Nothing can cash flow and appreciation doesn't seem to be high?

16 Replies

Hey everybody.

Im in the San Marcos are of Texas. Every deal that I run the numbers on for SFH just doesn't end up cash flowing and doesn't come close to the 50% rule. I would like to house hack but multi family is rare here due to restrictions put on homes in the area and their are currently none available.

If anyone has experience with a similar situation please comment and let me know what you did! Thanks!

Cody.

I experienced a very similar situation in CA and decided to invest out of state where you can beat the 1% rent to value ratio rule and cash flow all day long. 

@Antoine Martel Thanks for the response, and to answer no I haven't thought about going out of state. I know their are deals to be had in the Texas area and beyond but trying to make it work for me locally for the time being.

@Ryan Dossey Yes I am analyzing these deals off online listings. I know that off market is typically the only way to go buy I would think at least one deal would make sense that I found online? 

Originally posted by @Cody R. :

@Antoine Martel Thanks for the response, and to answer no I haven't thought about going out of state. I know their are deals to be had in the Texas area and beyond but trying to make it work for me locally for the time being.

 Makes sense. Good luck to you.

@Cody R. In areas with the average price point of San Marcos you're probably going to have to go off market. Even the distressed stuff in most of TX on the MLS is going to be way over priced. An interesting exercise for you would be to hop on Listsource.com and run cash sales in your target zips for the last year by absentee owners and see just how many folks are finding/buying deals that cash flow. It's probably a lot more than you think!

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

@Cody R. You need to get on a couple of wholesalers list for your area.  Also look a little further from the city.  I invest in the DFW area but concentrate on rural areas outside of the metroplex where 2% is common.  These areas won't appreciate much but then again I'm not a speculator so cash flow is king.  Best of Luck!!

Originally posted by @Cody R. :

Hey everybody.

Im in the San Marcos are of Texas. Every deal that I run the numbers on for SFH just doesn't end up cash flowing and doesn't come close to the 50% rule. I would like to house hack but multi family is rare here due to restrictions put on homes in the area and their are currently none available.

If anyone has experience with a similar situation please comment and let me know what you did! Thanks!

Sterling Williams, Real Estate Agent in TX (#682359)
Originally posted by @Cody R. :

Hey everybody.

Im in the San Marcos are of Texas. Every deal that I run the numbers on for SFH just doesn't end up cash flowing and doesn't come close to the 50% rule. I would like to house hack but multi family is rare here due to restrictions put on homes in the area and their are currently none available.

If anyone has experience with a similar situation please comment and let me know what you did! Thanks!

 Cody,

1-2% deals within the I-35 Corridor are hard to come by. I would do as instructed above and find some wholesalers and investor-friendly agents who can turn you on to some off-market and pocket listings. If you're willing to go further south to New Braunfels, there are some deals to be had with some work. If you have the time, start driving for dollars and circle prospect in the areas you would like to invest. If you have any questions in regards to some useful services that can help you with prospecting, PM me and I can point you in the direction of some services I use.   

Sterling Williams, Real Estate Agent in TX (#682359)

@Cody R. the advice above is all great advice. Look towards Canyon Lake, New Braunfels and Seguin. I have rentals in those areas that do cash flow. Let me know if I can help. I am from that area but recently moved to Dallas. I heavily invest in San Antonio, which I recommend as well. Good luck.

Hey @Cody R. What do you mean by 50%?

I️ don’t have problems picking up houses that cash flow $250+ with a CCR of 20%+ here in San Antonio.

Reach out if you want some help on analyzing or perhaps finding some near you.

Hey @Cody R.

If you are willing to look at San Antonio, I am a wholesaler who deals in volume to investors looking to rehab & hold.  

We have mostly single family homes all over town,  but some duplexes as well.  We have a lot of properties that make sense for people like yourself looking to expand your portfolio with cash flow.   Let me know if you would like to see what we have in SA-town!

Luke Hutson, Real Estate Agent in TX (#539656)
(210) 425-6159

I think the 50% rule is garbage - I would never buy a property that had those kinds of expenses.

1-2% CCR is one of the better metrics to shoot for, which can be found easily in the right market(s).

Also, save yourself a headache and only buy properties that are individually metered and the tenant is responsible for all utilities to the property (at least on 4plex and smaller).

@Cody R. I apologize for the delayed response. Please feel free to give me a call at your convenience, I do have a few potential options for you, here in San Marcos.

Again, mostly depending upon your financing options, available downpayment, timeframe, etc. However, I've got a few single family units, vacant/buildable lots, duplexes, and a 4-Plex that could very well fit the bill.

Brandin Huber, Broker
Huber & Co. Real Estate

Real estate agents have lots of information at their disposal and for the most part, they are somewhat intelligent folks. They are not going to price properties below what they can get for them. They will put them on the MLS at market price. Maybe a slight discount for repairs that need to be made. How is this going to be a great deal???

When you buy directly from the distressed seller, there will always be a pretty good discount. Not only do they have to get out quick, there will always be repairs. Repairs are very subjective. Hopefully a rehabber can get the repairs done a bunch cheaper than a homeowner who will contract with someone on a one time basis.

Direct marketing and networking with others in your area is going to get you good deals. ALWAYS be a little skeptical about wholesalers. Check the numbers on your own. Remember they are trying to make a quick buck. Some dont care at all if you make money or not. As with everything, do your own due dilligence.

I agree with Rick. I have a 1031 I’m trying to pull off but am not finding anything that meets my criteria. 1% deals were abundant 2 years ago but they are difficult to find now. I think the key is to not lower your standards or your goals. Just change your strategy. I’m stepping away from smaller MF deals now as it has gotten too thin. I’m joining others in larger apartment deals now.

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