All Forum Posts by: Seth Teel

I always think it's funny when people worry about oil. The boom may subside, but the need (and likely the resource) will always be there.  First, let me say, investing in a boom of any kind is a short-term prospect. If it was always booming, it wouldn't be called a boom.  In all things, the bubble will burst and you need to know your exit plan before you enter into the investment.  That being said, oil isn't going away, people, companies, and governments aren't going to stop needing oil as a fuel source.  Sure you can speculate about "peak oil," but I remember first hearing this term in the early 2000's, long before the current booms were at full strength.  Oil usage and need aren't going way.  Oil isn't drying up.  Like all commodities the price and demand will ebb and flow.  

If you want to invest in or near fossil-fuel rich areas, consider a longer-term investment.  Invest in infrastructure or living necessities (grocery stores, strip malls, gas stations, hotels, etc).  These types of properties are in demand and create a sense of place.  It takes the "trailer park cities" and gives them the much needed infrastructure to actually have some of these people put down roots.  It may be riskier play, and may require much more due-diligence, but there are reasons Haliburton, Baker Hughes, Weatherford, and others have made a decision to locate their headquarters in between San Antonio and the heart of the boom.  

Try going into the HEB in Carrizo Springs on Friday night and finding a case of beer or some meat to grill.  Field bosses will go in and buy up all beer and meat for their employees.  The vendors simply can't keep up. And the oil workers have limited choices of where to shop.  So far the only industry I've seen capitalizing on these trends have been auto dealerships.  New truck and luxury car dealerships are popping up all over the valley.  Between the oil boys and the cartel money, there are plenty of opportunities for investment. 

I have been to the auction several times, but never bought at the tax sale.  My pockets aren't deep enough to sit on a property for 6 months.  I prefer to try and buy the properties directly from the owners pre-foreclosure. Usually when it's cancelled the back taxes have been paid or the property has been sold (and back taxes been paid).  

When you go to the auction next week, make sure to be there on time.  The tax sale (Sheriffs Sale) happens before the bank foreclosure auctions.  The entire process is archaic if you ask me.  There is a much more civilized and efficient way to auction these properties.

There are plenty of deals to be had at the tax sale, however you need to know there is a "right of redemption" period for all tax sales.  If the home was the owner's homestead, their right of redemption is 2 years. If it was not their homestead, the right of redemption period is 6 months.  During this period the previous owner has the right to pay the back taxes and purchase the home back from the new owner for an amount greater than the tax sale purchase price.  I believe it's 125% of the new owner's purchase price, but I am not positive.  

This redemption period means you need to do your research on each home you bid on, and be prepared to hold the property for at least 6 months prior to making any repairs or upgrades.  Alternatively, you can seek out properties that may be on their way to tax foreclosure and try to buy them directly from the owner prior to the tax sale.  If you can get the property under contract prior to the tax sale, your title company can contact Bexar County usually get the tax sale stayed until the property is closed.  

Welcome.  Happy house hunting.  There are many deals to be had here in San Antonio.

I plan to attend.

I would start by talking to a good lawyer who understands the owner-finance transaction and the parameters set forth in the Dodd-Frank Act.  On the back end note sale, most note buyers want some seasoning, but I have found a few that will buy the note with as little as one full month seasoning.  There is no set percentage for purchase of notes, as each deal will have pluses and minuses the note buyer.  Typically I am seeing them buy at 80 to 85 cents on the dollar.   I am no expert in these transactions, but have recently started down this avenue of investing.  Good luck, I am interested in hearing how it turns out.

@Justin Kane 

 @Michael Roy 

You can buy a 4 plex with an FHA loan, but you have to live there for at least a year in order to satiate the resident requirement of an FHA loan. This is how I got into real estate investing. I bought a duplex with FHA loan when I was 20, lived in one side rented out the other. After a couple years, I repeated the same process. I got to where I had 3 duplexes and was only making about $45K/year at my day job. Tough to do in some cities, but the cost of living and housing in St. Louis (where I lived at the time) was so low. I did the same thing when we relocated to San Antonio 3 years ago. Except for this time I got my real estate license and started investing full-time. I guess I am one of the odd agents that owns rentals, flips properties, and still buys and sells for other investors.

I have bought several properties from wholesalers and wholesaled more than 100 properties here in San Antonio. The biggest thing to realize is that both ARV & Rehab Budget are subjective. If I take 10 investors to the same house each will come up with a different rehab number. Likewise if I ask 5 wholesalers to run comps and pull an ARV on the same property, I will likely get different ARVs, and different price-per-square foot. This is not to say that any of these numbers are incorrect. It's no more incorrect than difference in value from two different appraisers.

The best way for you to hedge your bets is to always run your numbers conservatively.  If you are comfortable with the potential profit on the worst case scenario, then do the deal. If you're not, keep looking.  It's also important to make sure you're educated and as well informed as possible.  You need to be the expert, not the wholesaler.  Many wholesalers have little to no real estate experience, let alone ever done a rehab project themselves. That being said, it doesn't preclude them from bringing you a good deal.   Interview your wholesalers, test their knowledge, ask about their experience.  A good wholesaler will always be concerned with good numbers, because they want your repeat business. 

Welcome @Brent Cullipher !  Plenty of good people in San Antonio to connect with.  A ton of knowledge on these forums, but to make good connections, I recommend going to some of the meet-ups around town.  Here are some of the meet-ups.  There is also a BP group meet-up run by  @Chad Clanton . I beleive Alamo REIA is tomorrow evening.

San Antonio Real Estate Investment Association
http://www.sareia.com/

Alamo Real Estate Investors Association
http://alamoreia.org/

Real Estate Investment Association - San Antonio
http://sanantoniorenc.com/

SA Cash Buyers - Thirsty Thursdays
http://sacashbuyers.com/

It appears to be one overzealous poster.  I like the enthusiasm, but there is definitely a right and wrong way to use the forums. I appreciate a go-getter, but haven't ever liked the used car salesman approach.  Business is built on establishing relationships, not on forcing your product or service on any/all prospects.  Reminds me of the guy the bar that hits on every lady; his close rate may be pretty good, but he probably doesn't have too many repeat customers.