All Forum Posts by: Eric Benzenhoefer

@Michael Ran 

Sound like a great service.  Can you detail out what it cost you?

Howdy all,

Context for my question

With Houston so hot, I am looking at other parts of the state to market to for wholesale and flips. To decide where, I would like to look at one main factor - Days on Market (DOM).

The thought is that in Houston, if you need to sell, just discount and sell for more than a wholesalers cash offer because the DOM is low and it will sell. However if the DOM is high, and you need to sell now, then a cash offer bring more value to the seller at a price that makes sense for the investor too.

My Question is:

Is there a way to look at a spreadsheet of neighborhoods in the state of Texas and filter by average days on market?

A bonus would be to sort by bedrooms, bathrooms, lot size etc, but the DOM is the main thing I am looking for.

I am a realtor and have access to the Harris County MLS, but would like to explore the neighboring markets as well.

Howdy all,

Context for my questions

With Houston so hot, I am looking at other parts of the state to market to for wholesale and flips.  To decide where, I would like to look at one main factor - Days on Market (DOM).  

The thought is that in Houston, if you need to sell, just discount and sell for more than a wholesalers cash offer because the DOM is low and it will sell.  However if the DOM is high, and you need to sell now, then a cash offer bring more value to the seller at a price that makes sense for the investor too.

My Question is: 

Is there a way to look at a spreadsheet of neighborhoods in the state of Texas and filter by average days on market?

A bonus would be to sort by bedrooms, bathrooms, lot size etc, but the DOM is the main thing I am looking for.

I am a realtor and have access to the Harris County MLS, but would like to explore the neighboring markets as well.

Thanks for asking @Waylon Themer, and yes let's get some more tacos which is a great perk of Houston investing!

Permitted Units

Everything inside the apartments is done and we have a green tag for our final plumbing and electrical. The final step of the permitted work is to install a backflow preventer, which is happening today at 2 pm. Monday we should have our application in for our certificate of occupancy (COO). I am going to expect a month until we get the permit to be conservative.

Make Ready Plus Units

We got our temporary COO for the units that were occupied when we bought the place and just needed a make ready. Doing this took some additional work filling up holes around the apartment where bugs and mice could have but now cannot get in, and we had to add a new window in our corner unit to have sufficient fire egress. Once that was done, the city came on site and gave us the green light to fill those units up.

Leasing those units

We have had great success from an ad in the greensheet in filling up our units and we are down to 1 unit vacant. To get the better qualified tenants we had to offer a $199 move in. With a deposit, we were only getting applicants who had red flags on their background check and rental history. The people with good jobs and clean histories would call, ask if we had a deposit, and if we did they would move on. We decided to match the market with a $199 first months rent, and then we could pick the lowest risk tenants which is best for us, the other tenants, and the neighborhood in the long run.

We also have found it to be good to schedule the viewings at one time on Saturday as much as possible to create a busy feel to the place when showing.

"Clean and Functional" Finish

An interesting observation is that people are either excited about the property or they complain about everything / don't even stop for the showing. It gives a very practical meaning to the idea of making a class C apartment "clean and functional". Any perks above that would be wasted money as the people who want more than "clean and functional" are going to find a class B, A or a rental house.

Not paying for the non-value added extras enables us to keep our rents low (or in our case offer a first moth special), provide a clean and function apartment, all while maintaining good cash flow. Win-Win.

Next Steps

We will get our certificate of occupancy, fill the remaining 3 units, get it refinanced, and then either sell or hold. We have it listed on Loopnet right now along with craigslist. We plan on increasing the price as we get more units occupied.

Been hearing Radio ads on Nasa Federal Credit union with some good sounding deals.  Has anyone dug into their High Loan to Value Mortgages program to understand the fine print? 

Do you have an option period on the contract?  I assume that the move here is to opt out of the current contract and renegotiate based upon this new information with the seller or walk away from it. 

I am interested to hear someone with more experience chime in.

What is the total of the liens and back taxes for both properties?

Howdy all, sorry to disappoint but I have for now abandoned this strategy.

Hi Pavel,

I am a realtor with Keller Williams Clear Lake and I am also an investor.  Send me a PM and let's see if I can meet your needs.

-Eric

Delays = Dollars

There are no two ways around it. Our previously described (and now solved) problems with getting our building permit have cost us 6 delayed months.

Solutions

This lost time means the lost opportunity for rent, which means that we have to cut our budget somewhere while still:

1. Paying our investors on time and through the end of the loan

2. Finish enough work so that we can refi out of our construction loan to either sell or hold

When we started the project, we had 8 units occupied or in need of a simple make ready rehab. There were also 3 down units in need extensive rehab. We are cutting these 3 down units from our scope. The budget for those 3 units equals what we lost in the delays. We cleared this with the city and our permit was updated.

Good News

We did get our permit! It took calling our trades daily and from one of many different phone numbers (as they were ignoring our calls) in order for them to finish the drawings that we needed for the permit.

As of this week, we have completed all of our pre-cover up inspections. From here it should be about 3 weeks of cover up and make ready until our final inspections. Then we will have some handyman work to do based on those inspections and then finally we will be ready to fully occupy the place.

Final 3 units

As I stated above, the increased demand is leading to higher trade prices. Once the the trade pool stabilizes and if rents continue to increase, we may go back in and finish the last 3 units.

Any questions? I am sure that I have lessons learned for others to learn from. Feel free to ask!