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All Forum Posts by: Seth Teel

Seth Teel has started 60 posts and replied 562 times.

Post: What is the average Cap Rate in San Antonio Area?

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Adriel Ramirez

Do you plan to buy single-family dwellings, 2 - 4 units residential properties, 5 - 24 unit apartment buildings, or larger apartment complexes? I've never bought anything over an 8-unit property, and I've never owned (for any length of time) or managed anything larger than a four-plex, so I will speak to what I know.  

It's important to realize that cash flow and cap rate are two different things.  A property can have a good cap rate, but zero cash flow.    It all depends on whether you pay cash, finance it, loan terms, how much work is required, lease rates, vacancy rates, whether you manage it or pay a company, property taxes, and several other factors. 

When I look at residential rentals, I typically buy 2 - 4 unit buildings. I look for $500+/month cash flow in an area that will appreciate rapidly (typically central city, in and around historic districts).  My strategy is to only own a few years, cash flow well and capture equity through rapid appreciation, then sell. 

Conversely, I know several investors that only invest in SFRs in Northwest & Northeast San Antonio.  Typically 80's & 90's tract-built homes, with solid rental bases.  Most of these investors are happy with $300/month cash flow, little appreciation, and low vacancy.  There is also less turnover in SFRs.  Just a different strategy.  

I have heard of investors using the 1% & 2% rules in this market and others, but I have never paid much attention to those "rules."  I may use them as a starting point to evaluate a deal sent to me from and agent or wholesaler, but I don't let them make or break my purchase decision.

I know this didn't give you a definitive answer to any of your questions, but the reality is type of acquisition and end goal (strategy) help define the answers to those questions. 

Post: Hard Money Loans and Closing Costs

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Wardell Picquet

 Most HM Lenders require you to "have skin in the game" and bring some cash to the closing table.  By most, I mean 99.9%.  There is a new HM Lender in San Antonio that is rolls your points and fees into the loan and you pay them on the back-end when you resell. The company is Texas Quest Capitol. They are new to SA, but have been lending in Houston for many years.  I have never done a loan with this company, but do know the guy running it here in San Antonio.  If you'd like his contact info, send me a DM.

The other alternative is finding a private lender.  I have been using private funds for my flips and bring no money to the closing table and pay my points, fees, and (depending on terms) my monthly payments when I resell the property. It took me a couple of years to find some good private funds, but once I found some the flood gates opened. My best suggestion is to document everything you do: wholesales, flips, rentals, sub2s, etc, this will make it easier to woo a private lender when the time comes.

Good luck!

Post: San Antonio Meetup

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Patrick Mahaffey

 I am pretty sure the meetup you are referring to happened last year on 8/12.  See below.

http://www.biggerpockets.com/forums/521/topics/142054-san-antonio-meetup---12-august

Post: RE Attorney in Texas??

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

See this forum post.

http://www.biggerpockets.com/forums/51/topics/189220-real-estate-attorney

Post: Sponsoring Broker in San Antonio, TX

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Carlos Montenegro

I hold my license with Daryl Zipp at Texas Premier Realty. There is a $199 per transaction fee, and E&O insurance at $200 per year, but that's it. It's the best I have found in SA. Let me know if you want more info. I'd be happy to make an intro.

Post: Tonya in San Antonio, TX

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

Welcome!

Post: 22 year old investor starting out in the San Antonio market

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

Congrats on buying your first investement. Hopefully it's the first of many. 

Post: Funding a rental

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Nancy Brook

I have not been advertising specifically for subject to properties. I make it known to the seller that it is an option at first contact. My leads are costly, so every lead I get I want to make money on in order to maximize my return. Many times the lead I get doesn't have enough equity to flip, wholesale, or owner-finance. However, there may be enough equity to cash-flow it as a rental or take over payments and then sell Sub2 and collect the down payment as my "fee." I generally explain the "ins & outs" to these transactions to the sellers myself, but I have seen some great info used by others from REI Matcher. If you'd like a link to that info send me a DM. Sorry I can't be of more help.

Post: Funding a rental

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Marcello Saldana

You're likely going to need more than $15K to buy a property whether you go conventional or use hard money ($15k may be sufficient if you buy owner-financed or sub2).  Otherwise this limits you to purchasing a property for +/- $75K (conventional).  No room for repairs & closing costs, or you're buying a property in a low rent area which often means high turnovers and rent chasing.   If planning to use hard money, most lenders want to see at least $25K - $30K liquid and you'll have to front the money for any repairs before taking your first renovation draw.  

I bought my first three rentals with FHA loans. They were all duplexes and I lived in one side and rented out the other. FHA only requires 3.5% down and you only have to live there 1 year; and after two years of reporting the rental income you can repeat the same model.

Finding an owner-financed property that can rent for 300+/month over your monthly mortgage may be an option.  Most owner-financiers here in SA require down payments between $5K & $10K.

Lastly, you could buy properties "subject-to" their existing financing. This is a good way to pick up property with little (or sometimes zero) cash outlay. For example, I just closed on a property "subject-to," the owner owed $65K, the property can rent for $1300/month, I paid the owner $1500 to deed me the property and I take over payments "subject-to" the existing financing. In this instance, I will likely do some cosmetic updates and list on the MLS for sale, but if I wanted to I could rent the property as-is. You should read extensively about this prior to using this strategy and I would also consult a RE lawyer. I can make a recommendation if you like.

Post: 80% LTV Refinance loan

Seth Teel
Posted
  • Investor
  • San Antonio, TX
  • Posts 596
  • Votes 587

@Jordan Brown

Try Marco Balado (210-286-8136), he has a bunch of different programs, and not all require seasoning. Tell him I sent you.   I would also call Schertz Bank, they hold a lot of their own notes and will lend without seasoning.