Buying and renting out a house

9 Replies

So I started looking into real estate September of 2019 and since then I feel like I am stuck in the same place. Always reading and still all over the place all the while never making a move to actually invest anything.

I live in the Houston area and am looking for a mentor to help me break out of my shell and start investing. Or if anyone can shed some knowledge on the situation to help me better get out there to making my first deal.

@Adam D Rinehart I haven’t made any offers all I have done is read and try to learn as much as I can but I still feel like i am in the same place I was before I started reading up on real estate. I am going to get out there and do a deal I’d just rather not fail miserably if I don’t have to.

@Mason Hall what’s the worst thing that could happen if you “fail miserably”? I’m being serious. Post the worst possible outcome that could happen if you bought an investment property. Odds are the financial implications pale in comparison to the damage your ego will sustain based on a fear of failure coming to fruition. This is called a self fulfilling prophesy.

@Mason Hall

Have you figured out how you will buy the property? Loan? Cash?

You got an agent? Figured out your buying specs?

Once you have that, look for properties with an agent or on your own. Make below full price offers on a few properties.

I suggest one the first one be move in ready in a A or B class neighborhood. I’d keep the 1% guideline on rent rate as a minimum too.

Once you have the property, do the necessary touch ups, then advertise and screen tenants.

@Alf Holst unfortunately the A and B class neighborhoods in the Houston area either don’t rent out at 1% or don’t cash flow using the 1% rule, primarily due to our high property taxes. Unless you put a significant amount down of course...

Do you need a mentor or do you just need to start running in the right herd? Maybe find a couple folks that have one or two rentals and just start hanging out with them - go to meet ups, you'll find them.

Originally posted by @Adam D Rinehart :

@Alf Holst unfortunately the A and B class neighborhoods in the Houston area either don’t rent out at 1% or don’t cash flow using the 1% rule, primarily due to our high property taxes. Unless you put a significant amount down of course...

Adam,

You are right, I've been looking at the MLS for about 3 months now and the best deals I see don't fulfill the 1% rule because I am looking in good neighborhoods with good school districts. The area I'm interested in rent on average for $1,500 for a 2,000 sqft property but the sale price at best is $1/sqt so its more like the 0.75% rule. I guess the gold nugget is to find a 0.75% property in a neighborhood that has low taxes and that has most of the CapEx (roof, heater, AC) recently replace and hope your tenant stay for at least 2 years (that's why I'm so focused on good school districts).

I'm not giving up, I know the right one is coming but I am not risking going to a lower neighborhood just to get a property under my belt. 

JRG

 

Originally posted by @Julio R Gonzalez :
Originally posted by @Adam D Rinehart:

@Alf Holst unfortunately the A and B class neighborhoods in the Houston area either don’t rent out at 1% or don’t cash flow using the 1% rule, primarily due to our high property taxes. Unless you put a significant amount down of course...

Adam,

You are right, I've been looking at the MLS for about 3 months now and the best deals I see don't fulfill the 1% rule because I am looking in good neighborhoods with good school districts. The area I'm interested in rent on average for $1,500 for a 2,000 sqft property but the sale price at best is $1/sqt so its more like the 0.75% rule. I guess the gold nugget is to find a 0.75% property in a neighborhood that has low taxes and that has most of the CapEx (roof, heater, AC) recently replace and hope your tenant stay for at least 2 years (that's why I'm so focused on good school districts).

I'm not giving up, I know the right one is coming but I am not risking going to a lower neighborhood just to get a property under my belt. 

JRG

 


I think you've got to lower your standards bro. I've been heavy since December ‘19 and so far I’ve put in 2 offers with today being my second. I’m learning that you have to be willing to take on more risk. Based on what you are looking for…in my experience, you are seeking a home run at your first at-bat. I’m willing to settle for 3 base hits with a double to score. With my first offer I would have killed it, but there was a bidding war. I’m working with a good mentor who has a property management company and RE firm, plus and a young aggressive agent. With my construction knowledge, and their RE experience…we will get my first house this year.

I devote at least an hour each day to research and I don’t get tied to any one property. So far, it’s working. When I get my first house under contract….I’m poppin’ bottles. When we get it reno’d and leased I’m cracking open some 20 year scotch. Then I’m on to the next one. 


All the best.