Updated almost 10 years ago on . Most recent reply
New member from Houston, TX
Hi, my name is Steve. I am a Jr. High School teacher of Engineering and Technology. My wife and I own six units so far and our goal is to invest in both buy and hold and flip properties. We are looking in the Katy, Waco, Killeen areas of Texas currently for single family and multi unit properties. BP podcasts have filled much of our time traveling to Waco on weekends as we currently work on a Reno there. We are both looking forward to building investor relationships on BP.
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@Kevin McNeely "Flipping is tough business here. There is a lot of competition and suitable potential equity is hard to find." Hit the nail on the head. The last 20 or so deals I analyzed were offering no equity. Fix up estimates (by the seller) were quoted lower than the actual repair values after preliminary inspections. Bottom line is most list prices do not justify a profitable deal...or to much risk. My agent has told me that some investors are busted immediately after closing. Most have been slapping lipstick on a pig and leasing as an alternative.
In the past I've always allowed myself to have plenty of equity capture in a deal in the rare case that inspector was wrong which would allow some cushion. Lots of folks have moved and are still moving to Houston for the lower cost of living. So, in addition, you are simply competing with people who are not investors, who are willing to own properties that need a little rehab, yet still habitable (weekend rehab warriors). This takes any equity capture (after rehab) out of the picture. So flipping is risky right now. BRRR is an option, however due diligence is a must. You can choose to cut corners on the rehab, however your manage company will probably want to drop you after a month after all the calls they receive from your tenants.
Calculators, like the ones here at BP are a necessity along with accurate comps (I pay a hefty monthly fee for access to real comparables). Without tools like these, you could end up in deep water before you realize it.
Despite all of the above, I continue to make offers within my parameters. The market is just not the same market it was in 2009-2011.