Seeking advice for investing in University Place/Rice/Museum District area

[Ann Vo]

Hello, I am a rather new investor with 3 SFHs. I'm looking to invest in a multi-family near West U/Rice/Museum District/Med Center in Houston. I'm interested in Duplex, Triplex with garage apartments etc., not more than 4 units. The ones I'm looking at will most likely need some work done just from seeing the pictures on the MLS, without any inspection yet. Has anyone bought or owned these properties (built in 1930s, 1940s) and what kind of major repairs, updates do I need to look out for?

Any other advice when investing in these types of assets in this area you can give me would be greatly appreciated!

[V.G Jason]

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.  

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. 

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.