New Real Estate Investor In Houston Market

14 Replies

Hello, Bigger Pockets Forum! 

I am currently an engineer working in Houston that is 22 years old and looking to slowly make the transition from full-time engineer to full-time real estate investor. I want to invest locally in buy and hold rental real estate, where my goal is to achieve financial freedom (making passive income that exceeds 1.5x - 2x my current full time monthly salary) by the time I am 30. I want to start investing in single family homes or small multifamily properties and I have set a goal to buy my first property by the end of 2018!

Since I'm new to Bigger Pockets, and new to real estate, I am learning as much as I can about rental properties and the different avenues I can use to find and close deals. However, I still have a lot to learn and not many connections in the industry. As such I have a couple of questions about the Houston market:

1) With the constant construction, the recent hurricane Harvey destruction, and the influx of people trying to move into the city, what does the rental market look like in Houston?

2) Is the market too competitive for new investors in Houston? Are prices still reasonable enough that a young investor like myself with little capital can get started buying properties soon?

3)What resources exist locally that would prove very beneficial to my real estate journey? Especially since I'm still learning and trying to connect with people in the industry.

Thanks in advance for your help and advice, everyone!

I'm hearing that labor is impossible to find right now, even for some seasoned investors. also was told by those active in our market that things are expected to slow down summer of next year. I was told it ll be easier to buy something that doesn't need reno if you are trying to buy in the near future.

Hope this helps

Great questions Jorge, I am still learning about the Houston market also so following this post.

@Jorge Quintero One easy way I have gained some familiarity with the Houston market is by listening to Right Path Real Estate radio, 9-10am each day on KTEK. They're on IHeartRadio also so you can listen online.

Another strategy I have followed so far is to focus on very specific neighborhoods instead of trying to understand the Houston market as a whole. I would not be interested in driving 60 minutes to check on properties, so I have focused on areas that are close to me. If you search "Houston MLS areas" you can find a map of neighborhood codes that should always be included on an MLS listing so you can make your property searches very specific.

I have also made some connections and learned useful info by attending the monthly JET Lending events at Redneck Country Club. Tons of people show up for those. Let me know if you go to one and I'll find you there.

I, too, am new to RE investing and operating in Houston. Houston has one of the most active angel investor networks in the US. As I understand it, our rental market is very strong, more so since Harvey. "Reasonable" is one of those terms that varies from person to person; however, real estate in Houston tends to be "affordable" compared to other major metropolitan areas. Having said that, many of the less expensive structures in the city were built between 1920 and 1940, pre-air conditioning, on pier and beam foundations (because Houston is built on a swamp,) and have relevant quirks and needs.

@Tim Johnson I had no idea about the radio station! I've been listening to podcasts (like the Bigger Pockets one) but never thought Houston would have one. Several people have recommended me to check out the JET Lending events and I plan to attend the next one, so I will definitely say hi!

@Elizabeth A Johnson does this angel investor network exist in Houston area REIAs or other RENCs? 

Hi everyone! I am new to REI in Houston as well, though I have lived here for the past 5 years. Thanks for the tips and info!

It would be absolutely shocking to have REIAs or RENCs without any angels in them. 

Hi @Jorge Quintero , @Elizabeth A Johnson@Victoria Weiss

After Harvey, the occupancy rate for rental properties increased considerably, but this does not mean that it will be maintained in this percentage (approx. 92%). Remember that there are many people who rented while they fix their houses (floating population). On the other hand, there are always business and investment opportunities, the correct question is, are you doing the work to find these opportunities? There are many strategies, but not all of them work for everyone. If you want, we can talk and I share a little of the information I have found.

@Camilo Rey that is a great point.  The occupancy rate for rentals has definitely been inflated due to Harvey and will not last (at the current rate) beyond the next several months.  I am not particularly interested in areas that flooded during Harvey, or even the surrounding areas.  I have been looking at more "up and coming" areas just north of 610.

@Camilo Rey that's some great info about the occupancy rate! 

@Victoria Weiss I've definitely noticed the same areas just north of 610. Are you having luck finding deals? I feel like the properties have appreciated a great amount, and the houses are constantly being bought by non-investors who want the convenience of being near the loop. Also, many houses are being rebuilt and are pretty new. 

Great post @ Jorge Quintero and I am also following this discussion. Ive been a loan officer for over a year now here In Houston and I’m also new the RE investing and I’m eager to get my first rental property before the end of 2018 as well.

@Tim Johnson I’ve heard about Jet Lending and I’m interested in checking them out as well to network and get more insight on possibly wholesaling to ease my way into flipping and eventually holding.

Welcome, joining BP is a great first step!  There are multiple real estate meetup groups in Houston and RE podcasts.  Find a few that interests you.  

My advice for a new investor is to decide and focus on which type of real estate you want. SFR, MFR, Retail, Industrial, Land, Notes, Wholesaling, Leases, and etc. There is a wealth of information and you will have to comb through it. All types of RE have there merits and downsides. A key is to FOCUS and not go after each new shiney toy that you come across.

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