Houston area newbies - let's share experiences
Hello fellow Houston newbies and semi-newbies!!!
I found BP less than a year ago and it has been an absolute godsend and has served as my motivation to jump into real estate investing after being interested for quite some time. So far I haave purchased a 3 bed 2 bath home on the MLS for $98,500 (June 2014) , spent $5,000 getting it rent ready :-| and rent it out for $1200/month. The house was vacant for 2 months while we made all the small repairs since we did them ourselves on the weekends (bad idea). We've had tenants since November since the sellers rented it back for 1.5 months and so far they've paid on time and there have been no issues. It is self-managed and there have been $260 worth of repairs. I feel okay about things so far but I'm waiting to see how a full year worth of owning this property pans out.
I am waiting to close on my 2nd property with a projected close date of April 10. This home is a 3 bed, 2 bath SFR in the same neighborhood but the foundation has been repaired, the roof is 1 year old and the HVAC unit was replaced 2 years ago. We are under contract for $100,000 with a $2,000 credit at the table for some minor repairs including termite treatment :-| We plan on spending an additional $1,000 on landscaping and a few other items. This home is smaller so we hope to get $1150/month. WELL, I entered my info into the BP rental properties calculator and...it says I will have negative cash flow. That sucks.
So, I shared all this to ask......
How on earth is is possible to have decent cash flow in the Houston area by buying homes off the MLS? I work pretty hard trying to find homes on the MLS that are decently priced and do not require a crazy amount of work. I really have no interest in buy, fix and rent. I'm willing to do repairs obviously but I find it extremely difficult to find properties that can cash flow and satisfy even the 1.3% rule. I plan on using my LOC associated with my investments to make cash purchases in the future from wholesalers, step outside my comfort zone and do more repairs, then refinance. That's the only feasible way I see myself being able to have decent cash flow.
How have you all coped with the Houston area with multiple bids on homes, high property taxes and high insurance rates??? Because at this rate, I will need a whole lot of properties to reach my goals.