BRRRR in Rio Grande, McAllen and surrounding cities
Investor 路 Poland 路 Member since 2019 路 50 posts 路 16 votes
Hello and great day to you fellow Texans,
I think Rio Grande has some great potential! 馃搱
1))) I have around 200k in cash and want to scale up rather quickly, so I am thinking to BRRRR it!
BUY - in a C-B neighborhood.
Single story 2-4 units. (or more maybe...)
$170 000 ALL CASH buy!
REHAB - up to 30k rehab.
RENT- My main goal is to cashflow minimum $150 per door so a 4plex would give 600$ PURE cashflow in total.
9-15% Cash on Cash return.
REFINANCE- And of course refinance it to pull most if not all of my money out
Repeat...
2))) Could you share any multifamily BRRRR deals you have done lately? Any area in Rio Grande or even around to San Antonio, Austin is highly appreciated!
3))) Any recommendations for GREAT people in the industry like PM,Agent, Lender, Investor would also be HIGHLY appreciated
// Adrian
Adrian, great post. Love the title.
Why do you think the RGV has potential? Why do you think SA has potential? You will be placing with a property manager? Are you thinking of looking for off market properties?
The RGV not too long ago was a rural agricultural based economy. It has grown into a major international trade hub welcoming commercial/retail/industrial businesses. There are more higher education institutions in the valley than ever before. I know a good amount of investors who like to invest in Mcallen and Edinburg as there are universities near with fourplexes that they lease to students. Mission (Sharyland especially) is another town that attracts investors as it has a highly rated school district that attracts many families. Brownsville has got some recent attention with SpaceX becoming the largest employer in Brownsville. For that reason I believe Brownsville is a bit more risky. If SpaceX were to leave what will happen? Some may argue that with so much money invested why would SpaceX but to each their own on the types of risk they will take on. Rents in the McAllen-Edinburg-Mission & Brownsville-Harlingen are lower compared to other metropolitan areas in the state. The market is very different compared to San Antonio-Austin. I see tons of new multi family development in the RGV. You also find re-sale mutli-fam in the valley that are not as old as you would find similar list price in San Antonio. For example in SA right now there are 35 multifam (2-4 units under 400k) there is only one unit built after 2005. Majority of the rest were built before 1965. A few are fully rehabbed while most are somewhat renovated. Not a big deal for some investors, but it is a difference that I feel is worth mentioning.
San Antonio is a great market for investors as well. AKA Military City, the area has tons of veterans and active military personnel. It is also known for its growth in green initiatives, cyber security, aerospace, and bio-tech/healthcare. Tons of higher education universities. I have seen rent by the room become a popular model due to the lack of attractive multi-fam opportunities and the demand for affordable housing. Lots of flips in the downtown area especially Denver Heights. Tons of short term rentals all over! San Antonio was a market that did not face as much downside as others during the GFC due to its economic foundation (amongst other reasons) and I believe that has attracted many long term investors. An article came out in May stating that NAR believes 46% of homes sold in Bexar county during 2021 were to "instituitional investors". It even said that the data was higher for investor purchases in San Antonio than Austin. Putting offers on properties that are tenant occupied seemed to get great discounts. One thing to be aware of in SA is foundation repairs. Lots of homes that need foundation repairs-can be very costly.
@Adrian Mahdian if I am reading this correctly it seems like you are out of country? If so, that's ok but just know that lending options will be an issue for you on your REFINANCE step. Now as far as "what area to invest in" my default answer is What area do you know people that you trust? When you are investing long distance you may never see your assets. That's a lot of trust to put into a complete stranger. But if we don't know anyone anywhere...ok, then our starting point is even across the board. But always go with the city/area that you have TRUSTED people in. A city that looks more profitable on the surface can easily have those profits erased by one bad vendor. Go with where you trust.
Now, as far as San Antonio goes - it is a good investment city. In Texas, the population has doubled in the past 30 years. And 90% of that growth is within 50 miles of the I-35 corridor. That means that San Antonio is included. However, Rio Grand is not. So stick to where the people are moving to and living and that's usually the right technique. Likewise we focus on 3BR 2BA homes that are below $250,000. There's not very many multi-family units in Texas because land is so cheap here. They'll build a house on an acre of land here! So 2-4 units are not as prevalent as other cities. With a multi-family I would not exceed $200k per unit. The cheaper the better.
Anyways, I hope all of that makes sense. Thanks for posting!