Taking a leap into Houston real estate

2 Replies

I want to take the leap into real estate investing with my first home -- so looking to buy 3-4 units in Houston TX market. But most of the properties I find are a bit too expensive


How do you analyze deals. What are the things you look out for as an investor. Your comments will be appreciated. 

My answer may seem like I'm punting, but it's an important lesson. Patience is essential.

That said, there are a lot of active steps you can take while sitting in a passive, patient position.

  1. Build relationships with major deal sources - brokers, owners, and influential third-parties
  2. Underwrite every deal that seems to make sense
  3. Find a small group of trusted advisors (your "kitchen cabinet") that can answer questions - BP is great for this
  4. Put out some offers at the prices that make sense in your evaluation - even if you don't win the deal, this will give you a taste of the process

As far as analyzing deals, my strategy is usually macro-driven. I look for locations with a great economic fundamentals in-place - solid rental demand, good area demand drivers, and reasonable barriers to new supply.

After that, it's all about the deal.

Get to know a submarket better than any of your competitors - rental comps, sale comps, new developments, active players, etc. After that, underwriting each deal will become a breeze. You just drop it into your template.

Originally posted by @John Wijtenburg :

My answer may seem like I'm punting, but it's an important lesson. Patience is essential.

That said, there are a lot of active steps you can take while sitting in a passive, patient position.

  1. Build relationships with major deal sources - brokers, owners, and influential third-parties
  2. Underwrite every deal that seems to make sense
  3. Find a small group of trusted advisors (your "kitchen cabinet") that can answer questions - BP is great for this
  4. Put out some offers at the prices that make sense in your evaluation - even if you don't win the deal, this will give you a taste of the process

As far as analyzing deals, my strategy is usually macro-driven. I look for locations with a great economic fundamentals in-place - solid rental demand, good area demand drivers, and reasonable barriers to new supply.

After that, it's all about the deal.

Get to know a submarket better than any of your competitors - rental comps, sale comps, new developments, active players, etc. After that, underwriting each deal will become a breeze. You just drop it into your template.

 Thanks a lot for the input. 

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