Investing in san antonio

15 Replies

Hello all, I will soon be relocating to San Antonio and am hoping to get some insight into the market there. I am specifically looking at properties somewhere near the medical center or near the airport but I am open to other neighborhoods in or around the city. Is it realistic to get returns in the 1% rule there for either single family or a small multifamily such as a quad? I would also appreciate any recommendations for investor friendly agents, whole salers or property managers out there.

Hey Henry, welcome to BP and San Antonio.  SA is a good city, I think 1% would be achievable for the areas you mentioned. 

Let me know if I can do anything to help.

Henry while I am biased because San Antonio has been my home 20+years and I have personally & professionally invested in this market for the past 14 years. The 1% deals have definitely become more scarce in the past 2 year's however they do pop up if you have your finger on the market's pulse. The advice we provide to all investors regardless of the market is to do your due diligence and structure a solid team knowledgeable in that market.  The 3 core pillars would be The money (mortgage lender)  Acquisition specialist (buyer agent) and a property manager.  We refer our clients out to a mortgage lender @Brooke Noth out of Austin Texas. Brooke is a phenomenal investor lender as also being a real estate investor here in San Antonio. @Sterling Williams is the markets specialist in small multi-family assets and truly has his finger on the pulse that aids in him often knowing where the off-market deals are. Henry, I hope this helps a bit, happy investing!! 

@Henry Vu when are you relocating? We find one percent deals still but as others have posted, they are tougher to find. Networking has been key for us. We are speaking next week at a group but doubt you'll be here in time. We utilize the BRRRR method often. We sometimes flip as well. There are fourplexes in San Antonio but not as many as in some parts of the country. Many are old homes that have been divided into multis. Both of the areas you mentioned can be good rental markets but I'd recommend getting a feel for the whole city. We have tried areas outside of our "comfort" zone and been pleasantly surprised by the quality of tenant we have found. Let me know if I can help you understand areas you are considering. My day job has allowed me to figure out where bullets fly more often. All in all we live in a great city. I think you will enjoy living here and investing here. Best of luck to you.

Henry,

Both markets are stellar but it's going to be tough to find 1%+ MF deals in both of those areas and if one does come available, it's going to be located in C class pocket if you're open to that asset class. The Medical Center is really achieving premium sales prices and compressed CAP rates in the MF space and has been better suited for the 1031 Investor coming in with 30%+ down.

Castle Hills and some of the other area's around the airport are great locations in the MF space but we haven't seen much liquidity in the open market. Our most recent deal within Castle Hills that we closed on last week was 1026 Fabulous which was listed for $449k and failed to appraise due to an incompetent appraiser and an out of city flat rate broker who failed to go to bat for his client to appeal the appraisal. We had the fortunate ability to be in direct contact with the seller due to his agent sending all interested agents and buyers to his client directly. Long story short, we were able to get the property under contract for $410k and by adding a few additional properties to the appraisal comp sheet, we got the appraised value up from $380k (where the seller refused to sell) to $420k, so the buyer walked away with $10k in equity out of closing. Point being, sometimes there's value to be had within some of these pockets, you just have to find it. 

San Antonio is a super competitive market because there are so many investors there. Our comps service has more clients and uses more agents there than anywhere else in the country.

One reason why there are so many investors there is because Armando Montelongo REI Mentoring Co is based there.

That doesn't mean you can't find great deals there. It just means you have to be creative to stand out, create lots of relationships, use birddogs, offer agents finders fees for pocket deals, etc.

Hi @Henry Vu

There is lots of great information on these responses! One of the other ways you can find a great deal is to have a quick close option on your offer. You are going to need to compete with cash buyers for a lot of San Antonio purchases. We help our clients close in 15-21 days after pre-approval. That way you can compete and show that your offer stands out. Hope this helps and let me know if you have any questions I can help with! 

-Brooke Noth

Your first find in a market that you may not be living in .... is a Property Manager.....a big one.  Reason being: 1) they have buyer agent specialists that will focus your home search to homes they can actually manage, 2) they have off market pocket listings that come up on a regular basis that you can be first in line for and 3) they have all of the vendor referrals for make ready items you may need.  

An everyday Realtor who has no involvement in the management side will sell you anything.  They have no real experience in renting or managing.  Anyone can pull comparable rental rates, that is not the issue.  Marketing, leasing, insurance, management, repairs, make readys, inspections, and security deposits are where they are lacking.   

Start with the end in mind.  A long term rental making great cash flow each month under solid property management allowing you to go find more of the same deals and not deal with leaky faucets!  Good luck and welcome to San Antonio! 

Thank you to everyone for the advice and connections made. I am definitely excited for the move and to start investing in San Antonio. I was really hoping to find a primary residence that would cash flow if I ever move out but that seems hard to find. Ill keep looking and I might have to bite the bullet on my own home and just find good investments in other places in town that cash flow better

Henry, 

It may be worth looking into short term rental opportunities with your primary residence as well. You could even attempt to find a place with a mother-in-law suite as well.  Just something to think about.

Welcome to San Antonio! Our market is primarily single-family residences and the best bet is 3-4 bedrooms, 1400-2200 sq ft with rental rates between $.75-1.15/foot per month for rental rate. There are always outliers obviously and slam dunk deals do come up frequently, but tend to go with multiple offers.
Zip codes I recommend near military bases:
78218, 78109- Converse, has newer construction homes that tend to rent quickly but some of the lowest priced new homes in San Antonio. Near Randolph AFB and Fort Sam. Neighborhoods: Hanover Cove, Several near Randolph Blvd and 35, Windcrest area
78251, 78250- Alamo Ranch- has a lot of new construction but priced tend to be a little higher, this is where a lot of people who work near Lackland AFB or work at USAA, Frost, downtown tend to live. There are numerous neighborhoods here, great school systems, high demand
Taxes tend to have a big impact on profit here, so there are definitely advantages to being just outside the Bexar county limits, just needs to be a case by case.
78249, 78254, 78240 UTSA area also offers some great rental houses at decent return rates, but they will be older and likely need more initial capex or maintenance, college rentals get more monthly but are more seasonal and tend to be lived in harder. Neighborhoods: Hunters Creek, Regency Oaks, Tanglewood. Hope this helps!