Seeking advice for investing in University Place/Rice/Museum District area
Most Popular Reply
Quote from @Ann Vo:
Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.
I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!
Sure, what do you think attains a higher bid for a property in that area or really in any area a single family house or a multi-family? Put things into perspective, do you think a single individual willing to live with 2-3 others will catch a higher bid, an investor looking to rent ou 2-4 units, or a family of 4 looking to move in?
Likely the latter, so almost always, a SFH will gain in value versus a 2-4 MF in the same area.
Nothing cash flows at current rates cause currency debasement made the long end follow the short end back in 2020 and you got b2b years of 20% appreciation. It's more unaffordable to buy a house relative to the population than it was in the Great Depression.
You put more down or buy entirely distressed. You lose a lot of deals. It's really the only way. I'm doing this in Austin, among other cities, and it's maybe a .025% win rate, but when it wins these are goldmines. And it's truly one of the best investments one can make with capital and leverage. When done without this diligence it can still win out, but you need time on your side which means a lot of capital and mental power to withstand the headwinds physical RE poses.
13 Replies
- 1yReginald TrussPro MemberLender · Toledo, OH · Member since 2015 · 1k+ posts · 96 votes
"Ann, I work with investors in Houston all the time—those 1930–40s builds often need updates to plumbing, electrical, and foundations, but they can cash flow great once rehabbed. If you want a quick rundown of what to expect (and how to finance them), I’m happy to share."
Reggie Truss
- Hi Reginald, that sounds about right for these properties. Yes, I would love to see a quick rundown, say for a $1.2M property and how investors typically finance them. Thank you.
Quote from @Reginald Truss:
"Ann, I work with investors in Houston all the time—those 1930–40s builds often need updates to plumbing, electrical, and foundations, but they can cash flow great once rehabbed. If you want a quick rundown of what to expect (and how to finance them), I’m happy to share."
Reggie Truss
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
- Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.
Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance! Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Sure, what do you think attains a higher bid for a property in that area or really in any area a single family house or a multi-family? Put things into perspective, do you think a single individual willing to live with 2-3 others will catch a higher bid, an investor looking to rent ou 2-4 units, or a family of 4 looking to move in?
Likely the latter, so almost always, a SFH will gain in value versus a 2-4 MF in the same area.
Nothing cash flows at current rates cause currency debasement made the long end follow the short end back in 2020 and you got b2b years of 20% appreciation. It's more unaffordable to buy a house relative to the population than it was in the Great Depression.
You put more down or buy entirely distressed. You lose a lot of deals. It's really the only way. I'm doing this in Austin, among other cities, and it's maybe a .025% win rate, but when it wins these are goldmines. And it's truly one of the best investments one can make with capital and leverage. When done without this diligence it can still win out, but you need time on your side which means a lot of capital and mental power to withstand the headwinds physical RE poses.
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Then to address the other questions.
I usually buy higher end properties, in the cities I buy, using a 1.33-1.5 DSCR and the lower end properties ideally with as little down so likely something to fulfill 1x DSCR but I bid deep and barely win. Again, barely win. I keep it 80/20 or 60/40 on ratio of primo:path of progress. Really depends on city. Austin, Houston, it's 80/20. Savannah and Knoxville it's 60/40, for example. Among other cities.
That's for LTRs/I rent usually long term(1 year leases, then 2 year offers if great tenants.
For any STRs it's usually sub 40% LTV as cash flow is highly volatile. Ideally closer to 20% and I buy excellent properties in excellent areas as these are real stores of value that can cash flow sometimes greater in a year than 3 LTRs. So capital concentration is the net input and I am grateful for these. I also (rarely) visit these. My Oregon one went from a risky but possibly great investment to arguably our family's favorite.
I rent usually long term(1 year leases, then 2 year offers if great tenants)
Quote from @V.G Jason:
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Sure, what do you think attains a higher bid for a property in that area or really in any area a single family house or a multi-family? Put things into perspective, do you think a single individual willing to live with 2-3 others will catch a higher bid, an investor looking to rent ou 2-4 units, or a family of 4 looking to move in?
Likely the latter, so almost always, a SFH will gain in value versus a 2-4 MF in the same area.
Nothing cash flows at current rates cause currency debasement made the long end follow the short end back in 2020 and you got b2b years of 20% appreciation. It's more unaffordable to buy a house relative to the population than it was in the Great Depression.
You put more down or buy entirely distressed. You lose a lot of deals. It's really the only way. I'm doing this in Austin, among other cities, and it's maybe a .025% win rate, but when it wins these are goldmines. And it's truly one of the best investments one can make with capital and leverage. When done without this diligence it can still win out, but you need time on your side which means a lot of capital and mental power to withstand the headwinds physical RE poses.
Jason - Thank you for taking the time to explain. One of the most realistic reasoning I've heard lately. I haven't tried buying any distressed properties yet because they used to scare me a lot. But after a few major repairs on a 1960s home I bought last year, I'm getting better at managing the fears.
I'm a late bloomer in investing so I'm particular in what I want and just being patient, saving up for the right property in the desired location. It's reassuring to hear, yep, put more down or buy cheap.
- Jason - I gather that you have great capital for most of your purchases, especially the ones in the cities. Love it! I need time to build this leverage.
Quote from @V.G Jason:
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Then to address the other questions.
I usually buy higher end properties, in the cities I buy, using a 1.33-1.5 DSCR and the lower end properties ideally with as little down so likely something to fulfill 1x DSCR but I bid deep and barely win. Again, barely win. I keep it 80/20 or 60/40 on ratio of primo:path of progress. Really depends on city. Austin, Houston, it's 80/20. Savannah and Knoxville it's 60/40, for example. Among other cities.
That's for LTRs/I rent usually long term(1 year leases, then 2 year offers if great tenants.
For any STRs it's usually sub 40% LTV as cash flow is highly volatile. Ideally closer to 20% and I buy excellent properties in excellent areas as these are real stores of value that can cash flow sometimes greater in a year than 3 LTRs. So capital concentration is the net input and I am grateful for these. I also (rarely) visit these. My Oregon one went from a risky but possibly great investment to arguably our family's favorite.
I rent usually long term(1 year leases, then 2 year offers if great tenants)
When you say you only do sub 40% LTV on STRs, do you mean you put down 60% or more on these properties?
And thanks for sharing your approach on rental terms. - Yes, 60% or more. STRs are difficult leveraging mechanisms as you buy the underlying real estate but you're truly creating a hospitality business. Most businesses do best with 20-40% leverage, any more can be quite devastating. Less could be not optimizing. Ideally, I'd get to less as I get older but that's my sweet spot.
Quote from @Ann Vo:
Jason - I gather that you have great capital for most of your purchases, especially the ones in the cities. Love it! I need time to build this leverage.Quote from @V.G Jason:
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Then to address the other questions.
I usually buy higher end properties, in the cities I buy, using a 1.33-1.5 DSCR and the lower end properties ideally with as little down so likely something to fulfill 1x DSCR but I bid deep and barely win. Again, barely win. I keep it 80/20 or 60/40 on ratio of primo:path of progress. Really depends on city. Austin, Houston, it's 80/20. Savannah and Knoxville it's 60/40, for example. Among other cities.
That's for LTRs/I rent usually long term(1 year leases, then 2 year offers if great tenants.
For any STRs it's usually sub 40% LTV as cash flow is highly volatile. Ideally closer to 20% and I buy excellent properties in excellent areas as these are real stores of value that can cash flow sometimes greater in a year than 3 LTRs. So capital concentration is the net input and I am grateful for these. I also (rarely) visit these. My Oregon one went from a risky but possibly great investment to arguably our family's favorite.
I rent usually long term(1 year leases, then 2 year offers if great tenants)
When you say you only do sub 40% LTV on STRs, do you mean you put down 60% or more on these properties?
And thanks for sharing your approach on rental terms. Quote from @V.G Jason:
Yes, 60% or more. STRs are difficult leveraging mechanisms as you buy the underlying real estate but you're truly creating a hospitality business. Most businesses do best with 20-40% leverage, any more can be quite devastating. Less could be not optimizing. Ideally, I'd get to less as I get older but that's my sweet spot.Quote from @Ann Vo:
Jason - I gather that you have great capital for most of your purchases, especially the ones in the cities. Love it! I need time to build this leverage.Quote from @V.G Jason:
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Then to address the other questions.
I usually buy higher end properties, in the cities I buy, using a 1.33-1.5 DSCR and the lower end properties ideally with as little down so likely something to fulfill 1x DSCR but I bid deep and barely win. Again, barely win. I keep it 80/20 or 60/40 on ratio of primo:path of progress. Really depends on city. Austin, Houston, it's 80/20. Savannah and Knoxville it's 60/40, for example. Among other cities.
That's for LTRs/I rent usually long term(1 year leases, then 2 year offers if great tenants.
For any STRs it's usually sub 40% LTV as cash flow is highly volatile. Ideally closer to 20% and I buy excellent properties in excellent areas as these are real stores of value that can cash flow sometimes greater in a year than 3 LTRs. So capital concentration is the net input and I am grateful for these. I also (rarely) visit these. My Oregon one went from a risky but possibly great investment to arguably our family's favorite.
I rent usually long term(1 year leases, then 2 year offers if great tenants)
When you say you only do sub 40% LTV on STRs, do you mean you put down 60% or more on these properties?
And thanks for sharing your approach on rental terms.One more question, Jason. How do you accumulate capital? Was it equity from your other properties, syndication with others, your own capital reserve from working in other professions?
- Mainly made it from my career. Then everything invested in RE since top of 2023 was made during managing my FO. All recycled capital.
Quote from @Ann Vo:
Quote from @V.G Jason:
Yes, 60% or more. STRs are difficult leveraging mechanisms as you buy the underlying real estate but you're truly creating a hospitality business. Most businesses do best with 20-40% leverage, any more can be quite devastating. Less could be not optimizing. Ideally, I'd get to less as I get older but that's my sweet spot.Quote from @Ann Vo:
Jason - I gather that you have great capital for most of your purchases, especially the ones in the cities. Love it! I need time to build this leverage.Quote from @V.G Jason:
Quote from @Ann Vo:
Jason - I have to agree with you on cash flow. I was calculating the estimated rent for a couple of properties I like and cashflow is almost non-existent at the current interest rate. I'm mostly investing for appreciation value and I really love the location for long term investment.Quote from @V.G Jason:
None of this stuff cash flows "great". Cash flow is a function of leverage in the deal.
It's a pretty solid store of value. And they'll grow faster than the median of Houston, but not as much as same neighborhood properties due to being multi family. I own in this areas, but always SFH. Been excellent experience, albeit short.I own heights, memorial park, rice/West U and some acres home. Did barbell esque approach in Houston.
Can you help explain more on the "grow faster" if it were SFH? Why don't multi-family grow as quickly in this area? Another question is what does renting SFHs in this area look like? Long-term multi-year tenants or shorter 30-90 day tenants? Also, would love to learn more about your barbell-esque approach in Houston. Do you mainly invest in A areas and high priced properties only?
Thanks in advance!Then to address the other questions.
I usually buy higher end properties, in the cities I buy, using a 1.33-1.5 DSCR and the lower end properties ideally with as little down so likely something to fulfill 1x DSCR but I bid deep and barely win. Again, barely win. I keep it 80/20 or 60/40 on ratio of primo:path of progress. Really depends on city. Austin, Houston, it's 80/20. Savannah and Knoxville it's 60/40, for example. Among other cities.
That's for LTRs/I rent usually long term(1 year leases, then 2 year offers if great tenants.
For any STRs it's usually sub 40% LTV as cash flow is highly volatile. Ideally closer to 20% and I buy excellent properties in excellent areas as these are real stores of value that can cash flow sometimes greater in a year than 3 LTRs. So capital concentration is the net input and I am grateful for these. I also (rarely) visit these. My Oregon one went from a risky but possibly great investment to arguably our family's favorite.
I rent usually long term(1 year leases, then 2 year offers if great tenants)
When you say you only do sub 40% LTV on STRs, do you mean you put down 60% or more on these properties?
And thanks for sharing your approach on rental terms.One more question, Jason. How do you accumulate capital? Was it equity from your other properties, syndication with others, your own capital reserve from working in other professions?
- 1yDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 1k+ posts · 659 votes
Hi @Ann Vo nice to meet you here on BP and Welcome to multi-family investing! So older properties like those in Houston’s West U area can have great charm and solid cash flow, but they often come with updates needed for electrical, plumbing, HVAC, and roofing. It’s important to get a thorough inspection to uncover any hidden issues. Also, consider the local rental demand and how upgrades might affect your rents. Connecting with local contractors and investors familiar with these neighborhoods can be a huge help. Keep digging, and good luck with your search!
Spark Rental Co-Investing Club584 ReviewsQuote from @Denise Supplee:
Hi @Ann Vo nice to meet you here on BP and Welcome to multi-family investing! So older properties like those in Houston’s West U area can have great charm and solid cash flow, but they often come with updates needed for electrical, plumbing, HVAC, and roofing. It’s important to get a thorough inspection to uncover any hidden issues. Also, consider the local rental demand and how upgrades might affect your rents. Connecting with local contractors and investors familiar with these neighborhoods can be a huge help. Keep digging, and good luck with your search!
Hi Denise - Thank you for the warm welcome!
Good to know that I need to budget for those updates. I've almost always had issues with plumbing, thanks a lot oak trees!!
I will look for investors in this area to learn more. Any connection you can introduce me to is appreciated. I'm just starting out over 2 years ago with 3 SFHs in the suburbs. Inner cities and older homes are new to me. I also read that most multi-family properties here don't have separate utility meters. What's the likelihood of being able to do this with those properties, if you have insights into this?
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