I hear a lot of people complaining about how difficult it is to find deals in my market (San Antonio, TX). However, I have plenty of investor clients that have been able to buy multiple deals in the last several months. The difference between these two types of people is one group is looking for the same deal they could find 2 years ago, and the other group has identified the opportunities that exist today. I thought I’d take a minute to share what I see as the top opportunities in this market. I’d also like to hear what opportunities you see today.
Short-Term Rentals – A lot of my clients that had previously been traditional buy and hold investors have switched to a short-term rental model. This allows them to target a different price point, which in turn opens up a new world of opportunities. My average traditional rental investor typically needs to buy a home below $200K to “make the numbers work”, but my short-term rental investors often buy properties in the $300k-$600K range. In San Antonio, the competition at the higher price points is a bit less than in the traditional rental range.
Land for Ground-Up Construction – We have extremely limited supply of both existing homes and new construction, so some of my savvier clients have decided to start building their own projects. I made this switch late last year and am working on a couple of my own builds. Land deals are much easier to snag in this market than BRRRRs or flips, and I actually see the risk as being lower than the typical renovation project. However, there is still a lot that can go wrong, if you’re not diligent. Please keep in mind, this strategy does not include buying a new home from a builder. When you do that, they get the entreprenurial profit, not you.
Troubled Tenant Properties – Some of my best deals over the last 12 months came from landlords selling properties with a tenant that was causing some difficulty. In some cases, they weren’t allowing showings and in others they were behind on their rent. There is less demand for these types of properties, even though the problem is a temporary one.
Are you taking advantage of any of these opportunities today? Do you see different opportunities? I know there are plenty of other strategies that are working well today, so please share what you’re up to.