Hey there BP Community!
I have been evaluating markets (for BRRRR) investing for the past month. I have narrowed it down to the final handful & San Antonio Texas (City not Metro) is winning in almost every category except price. The current median home price in San Antonio is ~178k which is proving to be the biggest barrier to entry.
My model is based on $85,000 basis (Assumed 60k purchase & 25k rehab), with $110,000+ ARV, & a rent to value of >.9%. I am worried about the ability the pick up distressed properties anywhere near that purchase price, in a good neighborhood, that will allow for an ARV around that value.
However, as San Antonio is 1.5M people & 465 square miles, I am hoping that there is plenty of opportunity to acquire properties at, or at least around, my model.
Can anyone let me know if they have acquired anything for around these values, in good neighborhoods, positive cashflow, etc. in the San Antonio, TX market? Happy for any and all input!
Hey @Zac Celli,
Welcome to BP. I get a lot of folks reaching out to me who are wanting to find BRRRR deals and "trying to build their team". Honestly, there aren't a lot of deals available in San Antonio that work well for BRRRR and if they do it's likely because you've sourced them yourself (i.e., bought directly from the home owner).
It’s difficult to find homes that make sense with the refinance, and many times the ones that will work for the refinance aspects don’t rent for enough. It’s not uncommon to have a recently remodeled house worth 200k here renting for 1400/month.
The numbers you mentioned with 110k, just don’t really happen here. Finding houses for 60k is rare in any side of town except the west side. Houses that only need 25k in work is also rare.
I think the sweet spot with ARV for BRRR deals is around 150k, and as far as a good party of the city, i personally will buy anywhere that makes sense.
Hopefully that doesn’t come off negative, that’s definitely not intent. Good deals are hard to come by as of late. But San Antonio is a pretty sweet spot and I wouldn’t be anywhere else.
If I can help ya out, hit me up.
Thanks for the response - great info! Not taken as negative at all.
To dig a bit deeper into your 150 ARV here, assuming a 35k-40k rehab as 25k isnt enough (at an assumed $2-to-$1 ARV value add from rehab dollars), are you seeing distressed properties around 70k-80K that would work in the city?
I realize I am in danger of getting too specific here. I should have mentioned that my model does not NEED to stay with 60k/25k - with the money i have saved up, there is wiggle room to increase my basis. I am just looking to see what I would be looking at in reality in the San Antonio market if I were to pursue the BRRRR strategy there.
Hey @Zac Celli I am not saying that you are looking for Unicorns, but more like white tigers.
There are some deals that will fit your model. There are deals that will fit just about any model, but you have to look for them. YOu have to do lots of direct mail, database searches, cold calling, texting or whatever it is that you do to find them.
I find deals every month or two, but I spend plenty of money to find them. If you spend $1,000 a month to find 1 deal per year and make 20k on it, you have a positive of 8k. Just spend more money on marketing and you will be at 100k in income per year in no time.
It is not the neighborhoods that you find the distressed houses, it is the distressed people who own the houses. THAT is who you need to market to.
@Zac Celli I use the BRRRR strategy here and it's not impossible to find great deals. But, those deals are not in the price point you want. The price point to target is an ARV of $120K-$180K and rents between $1100-$1650. Usually, we're all in between $100K and $130K for most of our BRRRRs.