All Forum Posts by: Boone Tyson

Investment Info:

Single-family residence fix & flip investment in Mcallen.

Purchase price: $54,000
Cash invested: $30,000
Sale price: $112,000

3/1, 1200 Square feet. Gutted and opened up the kitchen and living area. There was a partial 1 car garage conversion that we converted back to a garage which housed the laundry and WH. moved the AC and had to redo the old cast iron plumbing. Fun project

What made you interested in investing in this type of deal?

Easy area to resale. Good purchase price. We knew that at that price for purchase we would have a lot of options.

How did you find this deal and how did you negotiate it?

MLS. Lucked out and happened to view while the agent was at the property. Did a 90 second walkthrough and offered cash. She called the seller on the spot and we settled before we left the house and before anyone else could offer on it.

How did you finance this deal?

Line of Credit

How did you add value to the deal?

It was ugly and didn't flow well. We opened it up and redid everything.

What was the outcome?

Flipped and made about 20K after everything

Lessons learned? Challenges?

That area had issues with the old cast iron, so we learned to look out for that. Also learned to be aware of non-insulated walls with that construction. I had never opened up a span more than about 6 feet and this one was about 15-18 so that was interesting.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I'm an agent

@James Bridges, if you have any equity in your other property, you could talk to a bank about a home equity line of credit (HELOC) or you could look for a higher balance credit card with no interest for your first year and pay that balance off before the year is up. Its a small enough amount, you could also try to find a hard money lender because a high interest rate wouldn't sting too badly since it's a small balance.

@Charlie Moore I'm about to start a rehab on a property I'll be holding, but I don't want to run my funds down. If you have another property with some equity, you could use a Home Equity Line of Credit (HELOC) to finance the repairs. Another option, which I will probably use, is to find a credit card with no interest for the first year and see what kind of limit you can get on it. Depends on what you anticipate in repairs.

@Ishan Puri see above. Sorry, didn't copy you on the first post

We recently flipped a small house that had a kitchen/living area that functioned like an open studio setup. We went with home depot's prefabricated basic white cabinets. We looked for ones that had been returned or had minor damage because they heavily discount lumber when it has a flaw. We put all cabinets on one wall and used the small island as a break between rooms. We built the island top out to function as a bar since there was not much room for a dining table. Because it was a small space, we were able to use higher end finishes and went with an eye-catching backsplash and good lighting to open the space more. 

For an inexpensive job, it turned out really nice.

@Lauren Garcia

I'm a realtor and flipper in McAllen. What I have found with flips and rentals here is that you can do some very inexpensive value additions and get that rent up a little higher. $1,100 is a fairly common rental rate here, but I wouldn't be surprised if you couldn't find some minor changes that would allow for you to up the rent somewhat.

Do you have pictures of the property or some info that might help give you some ideas? Also, labor is very inexpensive here. My investors and clients from other market areas typically see about a 30%-50% lower labor and material cost rate when investing here. From my contracting work, I can probably give you an idea of what you could expect to pay and maybe refer you to a couple of different local subs I work with regularly for an estimate on some minor updating.

At that point, just compare the cost to the additional rental income to see if its worth it.

@Abraham Moreno, are you looking to invest in the area? I'm a realtor in McAllen/Edinburg

I live in the Rio Grande Valley area of South Texas and work as an agent and investor. In this region, the rental market is very strong. We regularly see rental investment are opportunities, including SFH and MFH that are well above the 1% rule. I see SFH on a weekly basis that are probably closer to 1.15%-1.25%. The greatest opportunity looks to be value add investments and BRRRR strategy because you can get into the deals fairly cheap and labor is cheap to remodel. The purchase price here is really low, about $130,000. Properties cashflow really well, stay rented, and many tenants are long-term. We also have a D1 college in the northern part of the city contributing to a large renter population, but it comes with high turnover. On the negative side, this area's appreciation is barely paralleling inflation and property management fees run about 10% per month. I've heard its all relative, but it made me curious to know what other people see in the regions they invest in buy and hold deals.

Are you hitting your 1% rule all the time? are you getting good appreciation? What about cashflow?

Tell us more about where you invest and what you are seeing!

I work down in this area as an agent and investor. The rental market is top notch. Daily deals well above your 1% rule with SFH and MFH. I just saw a 4-plex that is @ about 1.15% at original asking price. The greatest potential for margin based on what I see is with SFH though. By doing value add or just scouring the market and being patient, there are some wonderful opportunities for buy and hold.

...