I'm a new investor trying to get started in San Antonio. I'm looking for strategies that will cash flow in this market and coming up short other than doing an STR. Since i'm going to be living in it as an owner occupied loan, do people have any suggestions on property types i should target. It seems that a small multi would be better but i'm struggling to assess what a true multi in this area is. There are casitas but it seems a lot of those aren't actually permitted and allowed as ADUs. Any suggestions. (High credit score. Make above the medianm SA income, healthy down payment amount saved)
Realtor · Providence, RI · Member since 2022 · 404 posts · 262 votes
3y
@Trevor Candice - what I'd like to think is the most commonly thought of multifamily on this platform is an attached multifamily home; meaning multiple dwelling units within the same structure. A 2-4 unit MFH would be a great target assuming you are occupying one of the units. Anything in addition to 4-units you would be forced to seek out commercial financing.
Realtor · Providence, RI · Member since 2022 · 404 posts · 262 votes
3y
@Trevor Candice - what I'd like to think is the most commonly thought of multifamily on this platform is an attached multifamily home; meaning multiple dwelling units within the same structure. A 2-4 unit MFH would be a great target assuming you are occupying one of the units. Anything in addition to 4-units you would be forced to seek out commercial financing.
Real Estate Agent · San Antonio, TX · Member since 2018 · 25 posts · 15 votes
3y
@Trevor Candice the plan they you are thinking about is a good one. Live in one unit and rent out the rest. There are several multi family properties throughout San Antonio. A duplex up to a four plex would be the best option. Let me know if you have any further questions.
Investor · San Antonio, TX · Member since 2012 · 596 posts · 587 votes
3y
This depends on several items, but mainly is predicated by two things: your type of financing and the area you want to live. If you're going to be using a conforming loan (FHA, Conventional, VA, etc) then you will be limited to 1-4 family structures. Most of the true small 2-4 unit buildings are located within the urban core, however there are pockets throughout the inner-ring and suburbs that have small multi-family developments.
Next you will want to look at the base zoning for the area: RM-4, RM-6, & MF-33 are the most common zoning classes that allow for multi-family buildings (including ADUs). There are several IDZ zoning classes that can be applied to properties to allow for increased density, relaxed setbacks, and multiple units. Assuming you're looking for an existing building and not planning to build new, zoning is extremely important. Purchasing a multi-family building or a property with multiple detached units without the proper zoning may keep you from obtaining your loan due to underwriters taking issue with "non-conforming use." I have seen this happen both on new purchases and refinances. Aside from re-zoning the property (which is expensive), the city does allow for a conditional use permit, but you have to apply for it annually and there are other requirements. Usually a conditional use permit is enough to satiate the loan requirements.
R-4, R-6 and other zoning will allow for an ADU as long as it's owner occupied. Should you move from the property or move your homestead exemption to another property any ADU automatically reverts to an "Accessory Structure;" which does not allow for living quarters. It would seem this would be difficult for the City to enforce this, but I have definitely seen it happen- and keep in mind, jamming up residents is just another way for them to generate revenue.
My suggestion would be to find a good agent that understands the nuances of zoning relative to your desired property/strategy. It's been my experience that most realtors in San Antonio have no clue about zoning, and/or zoning requirements as they apply to property/ land use; this includes understanding how the Short Term Rental Ordinance applies.
Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
3y
There are some multifamily opportunities in San Antonio if you don’t mind some rehab…and it matters what type of loan you qualify for.
A lot of properties that may cashflow only accept conventional or cash. Not FHA. There are conventional loan programs that can get you at 5% down with down payment assistance. So you'll need a bit of cash on hand to put down.
You can also purchase a nice SFH starter and either rent the rooms or stay for 12 months and move out.
The key in this market is to adjust to what is available. What you may want to do may be difficult and pivoting to another strategy could be key.
The important thing to remember is to start small and take action.
Real estate investing is a marathon that builds momentum with each house. Every house won’t be a home run. Be happy with a single. The home runs will come, but continue to allow facts to speak…
If you need an investor-friendly agent, hit me up.
@Seth Teel - 100%. I was looking at the ADUs but the fact that they stop being adus once the owner moves out seems like a massive headache. Any suggestions on finding someone that knows the zoning without them blowing smoke :)
Real Estate Agent · San Antonio, TX · Member since 2020 · 75 posts · 88 votes
3y
Hi there! If you do end up going the STR route, I have been running STRs in San Antonio for the past 4 years, and I am a licensed agent, so let me know if I can answer any questions for you (:
@Seth Teel - 100%. I was looking at the ADUs but the fact that they stop being adus once the owner moves out seems like a massive headache. Any suggestions on finding someone that knows the zoning without them blowing smoke :)
Feel free to send me a DM. I sat on the Zoning Board of Adjustment for 6 years, and am quite familiar with the city's processes, zoning, and unified development code (UDC).
Property Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes
3y
We work with a number of homes that have casitas. Normal inside 410, but not always. I have seen places where they can rent separately. However, that depends on how you want to do things. The easiest way to work with both units which provides a good experience for everyone involved, is to make sure they are metered differently, where is parking, how does mail for each unit work, and are there any common places? (shared walkways or driveways, ect.)
If you are using a PM company to manage them, add the above-mentioned questions to your "interview" list.