All Forum Posts by: Alex T.

@Lyall Storandt conventional loan

@Account Closed 

@Rich Weese 

I don't understand how HOA is that different from a property management company, is it because I can't fire them? I do agree that the HOA fees here do seem high, the way I was looking at it though is that they also account for the bulk of my insurance, repair, and management costs (once all 3 are factored in, my fees would probably be similar). I'm also concerned that the owner is selling it because he's moving away yet my plan for managing it is not any better than his existing plan (in other words, if it really is hassle-free, why doesn't he keep it?).

Also wanted to mention that the tenants are already paying via ACH deposit.

I'm currently looking at a property in Houston (Humble area) as an out-of-state investor. It's a fully-occupied triplex with rents totaling $2495/mo. Here is the data I have on it, hoping that you guys can tell me if this is a good deal:

asking price: $179,000

rent: $2495/mo (800+800+895)

taxes: $2548/yr

HOA: $7749/yr (all external maintenance + external insurance, $215.25 per unit per month)

internal insurance: $630/yr (figure from seller, this number is much lower than it would normally be due to HOA insurance)

Since all external repairs are done by HOA, I factored in 5% repairs and 5% vacancy (both of which seem conservative given the area), which gave me a ROI of 14.71% with 25% downpayment.

Here is where things get interesting, and tell me if this is fine or if I should run from this deal. The seller's agent was extremely friendly, went out of her way to tell me all the details and explain why the seller is selling (moving long-distance apparently). After I mentioned that the PM companies I talked to would not give me a discount just because most external repairs are handled by HOA, she volunteered to be the boots on the ground if needed, saying that she has worked with the seller since 2007 and knows this property really well. When asked how much it would cost, she stated that she'd only expect to be reimbursed for the mileage of driving there when needed (obviously the repairs would come out of my pockets) and 0.5 of monthly rent if I decide to list through her. One thing that concerns me is why the current owner doesn't just do the same if he's moving out of state.

I've been reading Houston threads on this forum for a while trying to see what kind of return rates to expect in Houston. It seemed like 1.3% is doable for rent/price ratio, and some recommend trying to get 1.4%. Talking to an agent in the area, however, she stated that the current ratios are much lower, an example she gave me barely meets 1%, something I would be able to get with a turnkey provider anyway (although it's probably the area I'm paying a premium for).

Could Houston investors advise what kind of return ratio I should be aiming for in today's market? Are there certain areas you recommend for better returns with good tenants? I was advised to stay north of Houston. Spring seems to be a good area, although it sounds like it already appreciated quite a bit, what are some alternatives? Are there nearby areas that would be better for cashflow? I'm not too picky about age of property, do you recommend expanding my search to include older properties, if so, how old? Here in MA it's typical to see 80+ year old properties, it seems like in Houston people don't look at things older than 1980.

Thanks

Welcome to the forums @Karen Theriot , I'm actually looking at Houston area right now as an out-of-state investor and was hoping to meet wholesalers/agents who could help me out. I just sent you a pm.

@Sandeep S. Congrats that everything worked out well. Out of curiosity, how did you go about finding/rehabbing this house remotely? It seems hard to manage this remotely without a turnkey provider. What kind of resources do you recommend having on the ground in an area like Houston to be able to do a purchase remotely? From my understanding, PM is the most important, but did you do everything else (scheduling repairs, hiring inspector, attorney, title search, etc.) online?

Welcome to the forums Matt, I'm actually in a similar boat as you. I'm a software guy (Athenahealth) who lives in Boston but would much rather invest out of state, and I'm researching my options right now. Let me know if you want to chat more and exchange notes.

@Vincent Cholewa Welcome to the forums, where in Boston are you located? There are several meetup groups here that I would really recommend, Black Diamond (Waltham/Worcester) is very informative and a lot of experienced investors tend to attend it, I've made a few connections that way. Boston Wealth Builders is another good one typically done in Dorchester/Boston, and presents topics that are useful to beginner investors (incorporation, finding the right lawyer, etc.). Both can be found on meetup.com.

@Brie Schmidt Congratulations, it's very inspiring to read a story like this! I'm still in the analysis paralysis phase, mostly because I've been looking for deals locally in Boston and have been more discouraged than anything else by the market here. Since you know the Chicago/Milwaukee area well, would you recommend it for a rookie turnkey investor to look into?

@David J. thanks for sharing the name of the company. I'm not at all familiar with the Houston area, just starting to research it and this definitely helps.