I'm San Antonio born and raised living in California now. Looking to develop a network in San Antonio to help find deals. I'm an architect by training with pretty robust construction experience. First property was a home for myself in Austin that was literally a meth house before I got a hold of it. I did the rehab myself and added a bathroom and second unit. Second property was a duplex purchased from relatives at a discount (a gift). Both properties cashflow, and I mange all four units from here in CA. I want to expand this portfolio, but haven't really done a true investment deal yet, so looking to talk it through with more seasoned folks. I live in CA, so my ability to perform a rehab myself is limited. However, I still want to put my money to work in Texas real estate, as I plan to be back there in the next 2-3 years and would like to have my investments in one region so as to be able to manage them more efficiently. From my perspective, my competitive advantage of being able to do rehabs myself has been removed with my move to California. But I know that there is still a way to make money with real estate investing from out of state, so I guess I'm just looking for advice and stories of how others have done it, specifically in the SA metro area. I'm also looking for local realtors and contractors that specialize in investment properties. I still need to do a bit of research into how much cash I could pull out of a refinance of my first property, but I think that I would have somewhere in the range of $60,000 to $80,000 cash available for my next deal. Can't wait to hear from y'all.
If you know how to do the rehabs yourself, you can find someone else with your talents and hire them. We have many clients investing in rehabs that are out of market who do fine, but they have the right contractors running their job sites of course. Texas is great. Keep it going man! Let me know if you need help with figures on the refinance, but I would guess Texas banks and/or conventional financing may be your best bets there.
Very low unemployment rate means people are very busy right now. Sometimes people can be less than trustworthy especially if you or your manager can not be at the jobsite everyday. Be careful. I have heard too many horror stories about Cali folks who bought from a wholesaler or Realtor and the rehab never finished or it ended up WAY over ARV.
You can always be the lender for friends who are still in the SA area.
Buy 1sts or 2nds that are performing or non-performing in SA or surrounding areas.
Remember just because an area or city is cheaper than where you are does NOT mean it is a better deal. You could buy a 200k house that is worth 180k and just because it sounds cheaper than the 800k houses in LA, it might not be a deal.
For your first property - That seems to be a duplex and is now an investment property from what I am reading you can pull out 70% LTV for your next investment property purchase. Let me know if you have any questions.
Welcome to BP Ben,
As Rick mentioned numbers are getting tighter here and it's difficult to find contractors. With that being said I was tell folks to make sure they are running their own numbers and that the numbers truly make sense (even if I'm the one giving them the numbers). There have been several horror stories with out of state investors and it's not uncommon to be sent deals on foreclosed properties from hard money lenders, but with that being said there are definitely folks doing it and doing well.
If I can be a resource let me know.
Thanks for the referrals and encouragement. After a few tough weeks at work, I realized that I need to get more serious about real estate investing as a strategy to supplement and eventually replace my day job income. I'm working through the BRRRR book by David Green. He's constantly talking about how you need to bring the skills you are good at into your real estate investing, and find others to fill in the gaps (and your own shortcomings)
It has occurred to me that one of the big ways that I can still bring value added is through my architectural skills. I work on additions and new builds day in and day out here in LA, and spend lots of time thinking about how to get the most out of any given space or property. On the tight lots in LA, we often have to build right up to the allowed zoning envelope. I draw kitchens, baths, and all the spaces in between, and have the privilege of seeing the final results and knowing what works and doesn't work. I produce drawing sets for permit on a regular basis. I reconcile and mark up contractors bids fairly often as well. Lastly, I'm on site when jobs go into construction to make sure it gets done right and get to see all the ways that it doesn't. These are all skills that should directly transfer to investing with the BRRRR strategy.
I think my twist on the BRRRR strategy would be to always look for properties that are ripe for additional bedrooms and extra dwelling units, as is allowed by code. I can look at a plan and site map and the zoning regulations and quickly determine if there is room for the interior space to grow either out or up. If there's room for extra space, I could put together builders sets to get bids and go through permit quickly and efficiently, hiring on team members like structural engineers if needed. As I understand it, additions and extra units raise ARV more than anything else. Has this been your experience?
How many of you out there do rehabs that require architectural services/ permits? Are your contractors providing these services, or do they hire draftsman to make permit sets? Thanks for letting me know.
Eventually, I plan to be back in San Antonio full time, and plan on starting a business as a design/ build contractor, saving substantial money on rehabs by performing them with my own company. For now, the idea is to grow the portfolio and get some "reps" in the local market, learning about the specifics of what works and doesn't.