Properties in San Marcos, Kyle, New Braunfels

6 Replies

I've been looking at SFH, MFH, and condo properties in these areas, however, all of my deal analyses turn up with a negative cash flow and negative Cash on Cash ROI. Is that just the nature of the seller's market there, or am I being too conservative with my assumptions?

For example, for a 2-3 bd, 2 bth SFH, the price is about $125K to $160K, and my real estate agent says the the average rent I can get is about $1200-$1450 a month. I feel that I can't even make the 1% rule, and usually average between 0.7% and 0.9% on the best deals.

For a duplex, it's about $265K average, and I estimate the total rents to be about $2000-$2200.  That's not even close to the 1% rule.

For the cash flow analysis, I use a 10% vacancy, 5% repairs, 5% capital investment, and 4.2% interest rate.

Overall, I feel like I can't get a good deal unless I bought a really ugly house and then fixed it up.  However, it's been difficult to find a house that's a good deal with few repair issues.  Has that been others' experience as well in these cities?  The issue for me is that since I'm not local to the area, I'd like a place with relatively few repairs.

Has anyone just invested anyway if they are only hitting 0.9% or 0.8% for the monthly rent over purchase price?

Thanks for your thoughts!

Yes, you are in a very competitive market. Are you only looking at MLS, or are you also seeking out off market deals? You might consider a direct mail campaign to find wholesale deals. You should be able to find one percent deals that way.

Ah, the issue is that I'm a remote investor -- so any properties that need heavy rehab would be difficult for me.

Some of the real estate investors I have worked with in this area have used aggressive marketing tactics. Theyve done things like pay a college kid 50 dollars to hang a sign on every door in a neighborhood, after a few days and a lot of useless calls a deal or two will pop out. Then any homes that still have the sign hanging are more likely to be vacant and its easier to start doing a more targeted letter campaign. Every now and then you get a few slam dunk deals. 

I recently bought our first SFH investment property. We live in Kyle and looked in all the areas nearby- Buda, Kyle, San Marcos, new braunfels. But we ended up purchasing in Lockhart not our ideal but seems to be a nice area. I set my top price at 100k -that really helped get positive cash flow- and limited the houses to shop. We were able to purchase a house for 92k so we have great cash flow although don't yet have a tenant. Cade's suggestion above is a great idea but u need someone in the area. Can I ask why you are looking to buy in this area?

Originally posted by @JoAnn Marcantonio :

I recently bought our first SFH investment property. We live in Kyle and looked in all the areas nearby- Buda, Kyle, San Marcos, new braunfels. But we ended up purchasing in Lockhart not our ideal but seems to be a nice area. I set my top price at 100k -that really helped get positive cash flow- and limited the houses to shop. We were able to purchase a house for 92k so we have great cash flow although don't yet have a tenant. Cade's suggestion above is a great idea but u need someone in the area. Can I ask why you are looking to buy in this area?

Hi JoAnn,

Thanks for sharing. I'm glad you were able to get a place for $92K! I'm interested in this area bc 1) the price points seem to be lower than where I live and 2) bc I have family in the area.