Investing in single family house - Houston Area under 100K

43 Replies

Hi BP, 

I currently own a townhome in the Houston area which I purchased back in 2005. Times are different now and I would like to purchase once again in the Houston area, if profitable. I have family in Katy and would like it to be in the surrounding area. So to my question, what is the down payment required for this investment and can someone lead me into an area that would provide profitable with an up and coming neighborhood since there is so much development going on? Thank you and I look forward to the discussion.

Welcome I've noticed a few duplexes in the Spring, Tx area that fit that criteria. 

Try zipcode 77373 on Har.com

I actually talked to my mortgage broker yesterday for my third property. Investment downpayment is 25% down with 6 months cash reserves. You should check out Katy, energy corridor, and Spring.

This price range is everybody playground. it's gonna be tough and you have to be fast....good luck :D

I just bought one for under 100k in the 249 and beltway 8 area. the moment i saw the deal, i ran the number in 5 mins, turned back my chair and tell my boss i need to get the hell out in the middle of work day, Drive from Energy corridor to there to go see the property - with no time for a detail inspection and decide to bite on it. Then I kidnapped my wholesaler and drove him directly to the bank and give him the deposit check and sign the contract in the bank. 

All happened in 1 hour and a half...

Wow! This is great information. I live in Los Angeles and my purchasing power isn't what it is in Houston. I will start look into Spring and the other zip codes mentioned because I visit there roughly 2 times a year and really want to grab up another property before the end of the year. Thank you guy! 

PS. Do you notice that most of the properties under 100k are foreclosure/short sales or are there standard sales available as well? Thanks again for the info.

Originally posted by @Huy N. :

This price range is everybody playground. it's gonna be tough and you have to be fast....good luck :D

I just bought one for under 100k in the 249 and beltway 8 area. the moment i saw the deal, i ran the number in 5 mins, turned back my chair and tell my boss i need to get the hell out in the middle of work day, Drive from Energy corridor to there to go see the property - with no time for a detail inspection and decide to bite on it. Then I kidnapped my wholesaler and drove him directly to the bank and give him the deposit check and sign the contract in the bank. 

All happened in 1 hour and a half...

 Wow did you have to put any work into the place or what made it such a sweet deal?

@Kevin Wood ,

nothing sweet, it just fit my number: less than 90k after repair with rent in the 1200+ in an ok area (i might be wrong on this as my plants and flowers were stolen!) If things turned out to be ok i might post in the success story 4rum, I think we should have another 4rum section call the Failed Attempt or honor story because i do have some as well :p

Originally posted by @Huy N. :

@Kevin Wood,

nothing sweet, it just fit my number: less than 90k after repair with rent in the 1200+ in an ok area (i might be wrong on this as my plants and flowers were stolen!) If things turned out to be ok i might post in the success story 4rum, I think we should have another 4rum section call the Failed Attempt or honor story because i do have some as well :p

Great story either way. It does seem to be competitive on SFR. Buyers and investors seem to be competing. We are actually looking at some multis right now as it seems to be a little less crowded.

Looks like a great Buy Huy. 

I'm looking a SFR as many others because since I live in California and a multi unit would be to much work. Do you use a management company or manage it yourself? Any management company recommendations? Thanks.

@Tony Duranundefined

On a short note your conventional loans your looking at something around 10-20% down payment.

But this can vary. To get an idea you would have to look at the type of loan are you using, your credit, liquid assets, debt-to-income ratio, etc. Also, the type of loan. Is it conventional, VA, FHA, Hard Money, etc.

Some areas that have a lot of movement are Katy, Cypress, Spring and Kingwood.  You can find your cash deals around 100k or more.  Energy Corridor, Sugar Land, Heights are other good areas but go much higher in price.

Keep in mind that you will have to pack yourself with knowledge and tools so you can find the right niche because on your straight cash deals demand is very high and competition is strong.

Originally posted by @Tony Duran :

Looks like a great Buy Huy. 

I'm looking a SFR as many others because since I live in California and a multi unit would be to much work. Do you use a management company or manage it yourself? Any management company recommendations? Thanks.

Hey Thanks for the comments

Look up @Jerry Ta  on BP. He is my property manager.

Thanks

Huy

@Tony Duran I think the best advice I could give is go where the numbers and the deal dictate. If you have a business plan and want a certain return and the property appears on the surface I would continue to the next phase of putting a contract on it and doing your due dilligence. 

I look at is as if you are going to buy a stock your not interested in what city the company is located, your more interested in the P/E ratio and return it will give you. Same with properties, we manage over 400 homes in our portfolio and 50-60% of all of our clients are out of state and out of country owners and never set foot in Houston and probably have no desire to. They simply look at the numbers and that is what makes them or not make them move forward. 

I do agree there are some hot areas of HOUSTON  no doubt, but there are other areas that I have investors buying as much as they can because people are out bidding each other in one spot and taking their eye off the proverbial ball.

You make money I feel 5 ways in real estate (as a disclaimer I have messed up personally buying wrong in each of these categories at one point in my investing career):-)...

1. Equity capture when you buy it below current market 

2. Tax depreciation 

3. Someone is paying your mortgage down to zero eventually

4. Future appreciation 

5. Cash flow

Whenever I speak to and help investors I tell them it's a 5 legged stool that true investors look at, not just one leg.

And as always this is just my opinion and personal experience of winning and losing at this game.

I love how you guys are just going with it. Niche, strategy, funds, analysis, and closing! I want to do this already, but I must acquire more knowledge. It's only been a few weeks. Congratulations to you all 

@Huy N. you have pics for the interior of that property if you don't mind showing.  I had to pass on a property today due to the fact it was thrashed and the rehab would break bank.

@Huy N. You can see more pictures of the home here https://propertycare.appfolio.com/listings/listing...


For any new investor looking to make their first investment purchase here in Houston, I really try to preach patience with them.  It is a very competitive market for good rental/investment properties and the last thing you want to do is make a bad investment.  

I believe the #1 item you have to look at when evaluating the rental property is to make sure you have positive cash flow, or at least set a minimum positive cash flow you're willing to accept.  

@Jerry Ta and @Steve Rozenberg With your resources on average about how often do you have trouble with tenants resulting in legal action being required? SFH vs MFH

I also agree with you Jerry on being patient👍

Thanks @Jerry Ta .  House looks nice and I'll be interested in knowing how long it takes for something like that to lease out in that area of town.  Thanks again.

@Steve Rozenberg and @Account Closed  

This is great advice and information to help with my second investment into the Houston area. I like the low cost of getting into the investment which reduces the risk of losing it all. Thank you and I look forward to finding a place hopefully in the near future. 

Could anyone chime in as to what the profit margin after all is paid (mortgage, insurance and taxes) is for a 3/2 in the Houston area? In the Los Angeles, the general rule is $100 per bedroom per month.

I help investors find properties in the Houston area. The problem with Katy for investors is the heat of the market. The properties get scooped up within days, so you have to move fast.

PM me if you would like information on properties currently available in Katy in that price range.

Originally posted by @Fred Heller :

I help investors find properties in the Houston area. The problem with Katy for investors is the heat of the market. The properties get scooped up within days, so you have to move fast.

PM me if you would like information on properties currently available in Katy in that price range.

Hello Fred,

Do you help investors in the southeast side too (45S and beltway 8)? I just bought one but it took me 6 months.

@John Truong I'll help anyone find anything anywhere. I guess I should put that on my business card :) 

There's a pretty diverse group of rentals in the 45/BWS area. I just checked the comps and they run from $550 to over $2000 a month. I recently found a tenant for a nice 3BR home in a development along BW8 and Cullen for $1200.

Originally posted by @Jimmy H. :

@Huy Nguyen you have pics for the interior of that property if you don't mind showing.  I had to pass on a property today due to the fact it was thrashed and the rehab would break bank.

 here is some before pics

Thanks @Huy N. , that is not bad at all ... it solidified my decision to pass on the lead I had that would've required way more rehab $$$ and not enough of a discount from the purchase.  Thanks for the pics.

Originally posted by @Fred Heller :

I help investors find properties in the Houston area. The problem with Katy for investors is the heat of the market. The properties get scooped up within days, so you have to move fast.

PM me if you would like information on properties currently available in Katy in that price range.

 Thanks Fred Heller as I will hopefully be looking at the end of this year or early next which I hope will be a down period. 

Originally posted by @Fred Heller :

@John Truong I'll help anyone find anything anywhere. I guess I should put that on my business card :) 

There's a pretty diverse group of rentals in the 45/BWS area. I just checked the comps and they run from $550 to over $2000 a month. I recently found a tenant for a nice 3BR home in a development along BW8 and Cullen for $1200.

Is a SFR easier to rent than a townhouse/condo?

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