New Investor in San Antonio Area

1 Reply

I am new to Bigger Pockets, and looking forward to building an awesome business. I am also interested in meeting like minded individuals in the San Antonio area and learn from their experiences.  Sorry for the long post.

My wife and I are excited about building our real estate business on the side and she will be taking on a majority of the day to day work and we could use some help filling in a few areas of our business plan. 


I have a solid job and earn enough to cover our month to month bill and while still being able to contribute to my 401K and savings for this business.   We currently own 1 home which we are renting out ( it was our primary home for 9 years) which is at a great 3.25% 30 year loan.  In addition this property has about 90k of equity in it. This provides us a solid cash-flow property to build our business upon and we are looking to add a new property this summer. 

In addition to this home, we have approx 30k in savings allocated for the business as well as access to about 115K in private funds (my parents recently sold a piece of land and are willing to invest in this business ( more details below).  In addition our current home has around 108k of equity because of a large 75K down payment (20%).  We also have solid credit of 760+. 


We are wanting to pursue the BRRRR method but focusing on multi tenant properties in the greater San Antonio Market. We are planning to do some direct marketing to try and secure a few great deals but also plan to network with some whole-sellers and investors in the area as well. In addition I have a bank that will lend up to 85% LTV in the area and plan to adjust how much cash i pull out based on how the economy and business is progressing.

If the right SFH drops in our lap we would jump on the opportunity, but we will have a specific set of criteria that would have to be met.

Ideally I would like to on-board approx 20 doors over the next 2-3 years using the above method. This will allow us time to build a history with our LLC and have a solid foundation to jump into larger commercial deals.


I am still contemplating the best term structure for my parents loan. We have a great relationship and they have full confidence in my ability to build this business and handle their money responsibly. In addition they have had to help out my siblings over the last few years and i feel that they see this as a way to help me out without just writing me a check. That being said I am planning on success and want to reward my parents with a great ROI and something they can benefit from. I understand that there are minimum interest rates that need to be charged to prevent tax issues, but I am curious on how best to structure this loan. I have thought about making it a few different ways

  • flat interest rate annually (basically a CD, look at CD rates from banks and give them a point or 2 higher)
  • Success based profit sharing ( as deals are close they get a portion of the month cash flow of the rentals) 
  • Line of credit ( money that can be used on demand, rates will be higher than option 1 but still competitive) 

When a bank appraises a multi-tenant property to determine cashout refi amount (for this example lets say a 4 plex) what are they using to determine the value. Its pretty straightforward for a SFH, but on a 4 plex you may other things to consider see below

  • Property has 2 existing tenants that you don't want to displace, so you rehab the other 2 units and get them rented.  Will the bank want to view all units when building out its appraisal or will this be more indicative of combined rents for the building.  
  • Are there any useful tools or websites that can be used to calculate what multi-tenant property will appraise for?
  • If the bank is using cashflow as a lever on properties appraisal, do you find your self refinancing multiple times to pull additional equity out of properties as you are able to rehab all units and maximize rents. 

We are wanting to expand into commercial real estate in the future but wanted to get our feet wet with smaller units first to understand the ropes and to build our network and portfolio. I understand that in order to get favorable commercial terms you need to have an aged LLC that has a history of revenue associated to the business. We are looking to create an LLC this year and will be working to build our revenue over the next few years. Are there any targets or thresholds that we should strive for to get the best terms for these loans.

The other option would be to pursue owner financed deals.  How do you proposition this to the owners and what types of terms are usually agreed upon.  In most cases i would assume you would want to refinance this in a few years, so logically the lowest down payment and potentially interest only loans, would be your best bet until the larger commercial property can be rehabbed.  

I appreciate the help and I looking forward to meeting some of the local investors.  

Hey @Gregory D Coburn , the answer to all the questions is "It depends".

What do you want to do with your parents, it depends. Do you want to treat it like a real business loan? If so, give them 6% amortized over 5 or 10 years. That should get you started with your marketing and website. You do have a website already? Facebook pages? I did not see any on your profile, in fact I did not see a profile pic or anything that tells the community that you are serious about starting your business.

Before telling everyone about your great business plan, get a website name, get a facebook page, get a business facebook page, let all your friends and family know what you are doing, fill out your profile, post a pic. People want to see that you are already doing something. They dont want to see a plan. I see hundreds of people with plans here on BP, but then I never see them again.

I would not even worry about getting other loans or getting the best rate for that matter. I would start looking for deals. Properties at a great price IS the business. You have to have those before an LLC or loans or anything else. YOu may go a year or two before you get a deal.

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