All Forum Posts by: Albert Tsang

I have inquired with local banks if an equity line of credit or HELOC is available against investment properties. Unfortunately, they have all declined claiming that Texas regulations prohibit this type of product on investment properties.

Is this true or are banks simply avoiding this type of loan in Texas?

Thanks for all your replies. Based on these responses, it seems there is a tendency towards higher turnover for high end rentals. So, they confirm my suspicion. I guess the pros will be they generally attract high quality tenants but on the other hand, there is likely a higher turnover rate. I guess you can't have the cake and it too...

Honestly, I don't really know. Some former tenants have indicated that they want to move closer to job/family. Others just want to 'change'. None of them have indicated a problem with quality of management or property conditions.

I own nicer SFH rentals nice and establisehd neighborhoods and I wanted to understand if there is a correlation between nicer rental = higher turnover when compared with average rentals. The reason I ask this question is because I have been experiencing yearly turnovers on all my SFHs. I didn't receive any negative feedback from the property nor the PM team, so the move out conditions are beyond my control.

In talking with fellow RE investors that are more focused on average blue collar rentals, turnover seems to be much less. An explanation I can think of is that people who can afford a nicer SFH have the ability to eventually purchase a property. However, from what I have noticed, I would say less than 25% are planning to purchase a home after terminating the lease.

Just want to ask BP members if this is a common theme for nicer SFHs and if not, are there any strategies to attract longer term tenants in this type of property?

It is definitely a very high demand area due to a lack of student housing in the area, less than 5% vacancy but turnover is expected to be high. I recently read a FNMA report on student housing and the cap rate for large apartments has been falling for a few years now, from over 9% down to around 6.5% earlier this year. Is 6.5% a realistic and fair number for for smaller apartments (10 units or less) or would you expect more or less given the age of the property, higher turnover and the high demand.

I would like to understand if there is an average cap rate or minimum cap rate for student apartment investing (approx. 10 units)? The apartment is an older building (50+ yr old), so updates are expected. Due to the high demand for student housing in the area, it seems the cap rates are generally lower than a typical non-student apartment complex because of the presumably more stable demand.

I used Texas Pro Tax before and had good results with them. However, they are a little more expensive than others serving Austin, but based on other feedback, they are likely one of the best in town.

Thank you for your replies. In fact, the interest rates for these properties range between 4-5%, so from an interest perspective, the difference is not significant. As for the outstanding amounts, they range between $150k-$250k. At this point, the goal is to payoff these properties to prepare for retirement. Improved DTI would be nice should a great opportunity arises in the future.

Assume you have 10 SFHs with different purchase prices and all of them have different interest rates and monthly mortgage payments. If you are at a stage of consolidation and want to pay off the 10 SFHs as fast as you can, which one do you choose to attack first.

- the property with the highest interest rate
- the property with the lowest balance
- the property with the largest monthly payment
- the property with the largest balance

I know intuitively, it is best address the mortgage with the highest interest rate. But, I also read that if you pay off 1 property, you can use the snowball effect of using that amount and pay off the next property much faster, then repeat and rinse. Also, your DTI will be at a better standing from a financing perspective should you choose to pursue other investments.

Thoughts ?

I have SFH investment properties in A to B areas and all have front and back yards. Based on my past experience with tenants, most will maintain the interior fairly well, but they will ALWAYS neglect yard maintenance even though it is written on the lease (e.g. mowing, trimming, watering...). I was hoping if some fellow landlords have strategies to encourage their tenants to maintain the yards.