All Forum Posts by: Cody L.

Houston is a great area to buy, but I might be a bit biased as almost all of our properties are here.

In Houston you can buy a huge house for little $ (burbs, BFE, gangland) or a little house for crazy $ (Montrose, heights).

Like all investments, there is a risk reward when it comes to SFHs. The better the area, the "safer" the investment, the lower your return. If you buy out in SE Houston or other bad area, you can buy a house with a lot of income relative to it's price. I have homes worth under $100k that rent for $1,200+. So they crush it on cash flow but have the disadvantage of low liqudity (hard to sell if needed).

The return on downpayment from someone getting a traditional loan would be tremendous on most any property.

What I did when I started was look for two things:
1) Buy where I'd be willing to live
2) Try to find a property where the purchase price is no more than 100x rent. So a $100k house should rent for $1k/month. That's easy to do in bad areas, hard to do in good areas.

If you can get a traditional loan (you lucky dog) then you might want to consider a lower fixed rate at the expense of a higher amortization (faster payback). It's amazing to cash flow on a property that you put little down on, while at the same time knowing your loan is being paid off fast. After doing that on my first investment property a light went off in my head and I thought "Why doesn't everyone do this?" and I started to buy as much as I could.

tldr: Houston is a great market, but changes a LOT depending on location. Target the best location you can while still getting 1/100th of the purchase price in rent. If getting a traditional loan, but as MUCH house/income as you can since you can only have so many traditional loans on your credit report.

TOTALLY market dependent. In our area of Montrose, our vacancy is actually less than 0%. Meaning our rent collected on some properties, exceeds our rent roll. This is typically because we stay full and occasionally have someone break a lease, giving up their deposit, and we get someone else in quickly.

On the flip side I have properties I've bought in bad areas where I know vacancy will be a problem, however they were priced with that in mind. Some of them would be rocking and rolling if I keep them above 50%

First time poster. To answer your questions (since I had the same one when I started):

1) I'm an agent. I'd be a broker but in Texas it's not just a matter of classes and tests. You have to be an agent for several years.

2) I work for my own company, however (as required by law) my licence hangs with a random broker. B

3) Pros of being an agent are numerous. But the bigger ones are access to forms, access to MLS, and often when I buy I'll put myself down as the selling agent and use the commission to lower my down payment. Another big advantage, frankly, is as an agent you have to deal with other agents less. Meaning if I see a property I want, I can contact the seller/agent myself and view (via supra or other) without having to have another agent set it up for me. If I like a place I fire off a contract that's filled out and ready to be signed and don't have to have someone else do it.

The only "negative" really is that when you deal with a buyer/seller directly (that doesn't have an agent) you need to be sure to disclose you're an agent. There are also small costs and time (continuing education) but they're pretty small given the advantages

4) Zero time taken away, with the exception of the random classes you might have to take every year or so. They're done online (or can be) and are pretty easy to knock out.

5) Never lost a deal, but gained countless because of being an agent.

6) I found a broker who, honestly, does nothing. And that's what I wanted. There are no marketing, classes, etc. with him. I've never met him in person (I hope that's okay to admit?) I pay him a fee to work under him and pretty much do my own thing. I pay him $80 or so each time I close a deal (to cover E/O, doc review, etc.) and $100 or so a year. That situation works perfect for me as I'd shoot myself if I worked for a big brokerage and had to follow their rules. But that's me. I need to do my own thing to do well.