Houston Area Buy and Hold SFH

28 Replies

Wondering who all in Houston, TX is currently looking for their first rental property investment? I have been actively searching for the past month with a RE agent but have been outbid on 4 homes thus far. I am bidding on home that are on the MLS, both turnkey and some needing rehab.

Any advice on finding better deals off market? MY RE agent runs off market searches but I havent seen much. We also started looking at foreclosed homes as well.

I am not in a rush to seal my first deal but finding more deals and putting in offers would help my odds.

Look forward to any advice! 

Make sure you're looking places that you may find owner listed sales. There are a few sites if you Google "Texas FSBO". Also scour Craigslist. Driving through the neighborhoods you're interested in for yard signs is time consuming but may be helpful.

Also remember that as an investor you're looking for that home that's got some "ugh" factor to the other buyers that you can easily fix. Smoker's homes are the "best!" 

I didn't use a RE for the house I bought on the MLS.... kept the 3% for myself. No reason you need one unless you want someone to find you properties and walk you through paperwork.

Be aware if the seller is also not using a RE you will need to find legal council to draft the sale. You cannot use the standard TREC 1-4 contract unless there is a licensed RE on the deal. It is technically legally void without one and could get thrown out in court. 

Updated 7 days ago

Edit: This is incorrect. TREC 1-4 does not have the voidable without a realtor clause.

@Brian Nel good for you for not using a realtor. I guess even if someone uses a lawyer ($150-200/hr), the cost will be less than 3%. And that would also provide a counsel with no conflict of interest.

So what’s the point of using a realtor for someone on biggerpockets (assuming people on Biggerpockets are savvy)? Not enough time to find deals?

@Brian Nel Hi Brian, I never heard anything about the TREC 1-4 contract being void if not used by an agent. You might be confusing that with the contracts made available only to Realtors by the Texas Association of Realtors (TAR). I know many a seasoned investor that uses the 1-4 you can download off their site. However it is the situation that a Texas agent is not allowed to use any contract other than those promulgated by TREC where one is available. They are regulating real estate agents, that's all. Also, there's technically a difference between void and voidable.

@Sakib Jamal Hi Sakib, I do have an agent I use for all of my insurance including on my home. She usually ends up writing me a landlord policy with UPC Insurance that has a self-inspection feature where you upload pictures to their portal. PM me I'll be glad to share her contact with you. I'm in Texas, don't know about other states.

Hey Mark, I'm assuming you're a cash buyer. The best deals are off-market, not on the MLS. Most real estate in Texas trades off the MLS. Go join a couple of real estate investment clubs. Get your email on the buyer lists of as many wholesalers as you can. Get a fresh list of owner-occupied pre-foreclosures in area of interest and go knock on some doors. Go to the tax auction and make connections there, just watch & learn while you're there, it's fascinating! Don't use an agent to get your deal, maybe pay one to help with paperwork only.. unless you are buying a listed property. When the other side has agent representation, it's illegal for the agent to run both sides of the table. So they'll get someone else on their team to represent you. That's like suing somebody but letting them pick your attorney. Otherwise, the time to use an agent and the MLS really is to get top dollar on the retail market when you want to sell. Hope this helps.

Ok so if you're going conventional loan route, you have to play by lender rules. That knocks out any kind of wholesaling, off-market deals. Unless...occasionally there is a motivated seller that is in a position to seller finance! I jumped back on here to let you know about a house that is on the MLS but cas-only & I'm sure will go into contract by tomorrow. 8715 Rocky Valley Drive, Houston, Texas 77083

bid high, get under contract, do an inspection, wait till end of inspection period, negotiate down some, buy house

Anything you bid over value should be made up with appreciation the first year +/-. Be prepared to bring some extra cash to closing if needed if the property does not appraise. This is a winning strategy right now in my opinion.

It is not worth 5-10k to lose a home if you are in for the long haul. Every 1k in financing is under $5 per month.... so it is not painful.

Originally posted by @Sandy Sawyer :

@Brian Nel Hi Brian, I never heard anything about the TREC 1-4 contract being void if not used by an agent. You might be confusing that with the contracts made available only to Realtors by the Texas Association of Realtors (TAR). I know many a seasoned investor that uses the 1-4 you can download off their site. However it is the situation that a Texas agent is not allowed to use any contract other than those promulgated by TREC where one is available. They are regulating real estate agents, that's all. Also, there's technically a difference between void and voidable.

You are correct! Thanks for the clarification. I was confusing it with the TAR lease agreement which has a copyright section.

 

In my area 200k S.F.H are a bidding war  most are  bidding  over 10 to 15K may be more of course the issues of the  home/location  will push the $ up and down .

Market is RED hot !

When the other side has agent representation, it’s illegal for the agent to run both sides of the table. So they’ll get someone else on their team to represent you.

Can you not just represent yourself or get your own real estate lawyer?

 

Also, foreclosure and pre-foreclosure are 2 different animals. In pre-foreclosure, you're negotiating a deal with the homeowner, finding out how much equity he has, even offering to take over his payments and save him from getting a foreclosure on his credit. After foreclosure, it's now owned by the bank, not a motivated seller. They'll set the price and not budge until it's been on the market for a while, and you're fortunate to get anybody's attention.

Originally posted by @Danny Webber :

bid high, get under contract, do an inspection, wait till end of inspection period, negotiate down some, buy house

Anything you bid over value should be made up with appreciation the first year +/-. Be prepared to bring some extra cash to closing if needed if the property does not appraise. This is a winning strategy right now in my opinion. 

It is not worth 5-10k to lose a home if you are in for the long haul. Every 1k in financing is under $5 per month.... so it is not painful.

Great point! I could not say it better.