All Forum Posts by: John Barr

@Steve Watson I have been an active investor in the San Antonio market for several years now and my take on the whole MF vs. SFR right now is EVERYONE wants an MF property right now. The issue with this is that the vast majority of MF owners are of the investor mentality them selves. They understand the value of MF and will only let go of the property if the right price presents its self. Unfortunately, the vast majority of those people are the out of state owners just because they are not used to the prices and cash flow that San Antonio should produce. I have seen MF price double in price in the last two to three years only because it's MF and Texas is red hot for investment.

I think all of Real Estate is pretty over valued right now just because of the nature of the market cycle but I think MF is the most over valued of all. While I think if you are able to put enough down you are going to be fine from a cash flow stand point I just think you are going to find better returns in SFR right now. Also from a long term equity play, I think SFR is a better play right now as well.

While I have seen SFR prices swell from the 150's to the 190's over the last few years I have seen class C duplex's go from 100K to 175K in the same time frame. What goes up must come down to its equilibrium and I think the smaller MF properties have further to fall than SFR do.

Also look at your buyer pool. SFR properties are the most liquid properties out there just because families would rather own a home over a smaller MF. So they are going to be quicker to recover from an economic down turn just because there is a much larger buyer pool.

I have not been able to locate hardly any MF properties that can produce higher returns than SFR right now just because of the competition level for those properties.

If you would like, shoot me a PM and I can send you a breakdown by zip code on my take of the entire city. I also put out a market report every month that I could send to you as well.

Best of luck!

@Jason Yahner I feel that we are a little over priced but I think real estate, in general, is pretty over priced just because of the market cycle the over all economy is in. One thing that I look at though is the price range we are in. 

For good cash flowing rental, I find the best properties to be under the 200K. at those prices, you should be able to cash flow several hundred dollars a month. Say our market is 10% over priced. So you would need to put 40K down on a 200K house to have a mortgage of 180K. Now the market corrects that 10%. Your house is now worth 180K but you are buying for the long term and as long as you bought right and are cash flowing several hundred dollars a month you are going to be fine. In a down market, rental prices tend to increase because people don't want to buy homes when real estate prices are falling.

Now say you buy the same house in the down market for 180K. Your down payment is 36K. It's only a 4K difference which isn't a whole lot when we are talking about prices in the hundred of thousands to get a cash flowing asset. 

That 10% over valued is a heck of a lot better in our market than say an Austin where rental properties are in the 250K+

@Keith Kaufman I have been active in the San Antonio Market for several years now and from a cash flow stand point we have a great rental market. Pretty much the only area that I focus on is SFR rental property.

While I agree with @Will Pritchett on the over valued part I feel we are far less over valued as some areas of the country but you are buying for cash flow not some much as equity. That being said over the long term you are going to win.

It isn't hard in the market to find houses that should cash flow at least $300 a month. The great thing about buying SFR for a cash flow rental property for the long term is even if values drop in the short term because of a down economy rent prices increase because no one wants to purchase housing when home values are falling.

You just need to be a little careful in the area that you are trying to invest. Depending on your strategy you need to understand where the good rental areas are. If you would like I can send you a break down on the city by zip code for a reference. Just shoot me a PM

I also put out a monthly market report that I can send out to you if you would like.

Happy Investing!

@Dannielle Hoffman I get all of my cabinets from InStyle granite and cabinets. Have everything you listed and the look a little more custom than your home depot cabinets. I get my granite from someone else and just like @Seth Teel mentioned I can give the numbers on here so shoot me a PM and I can send you a few.

@Aaron Brown I have been active in the Sa market for over three years now. I would be more than happy to share with you my take on the whole city from an investment stand point and you can pick which areas work best for you. I actually put out the monthly market reports for the Alamo REIA in San Antonio as well and can share that with you as well.

@Michelle Felux Then you definitely are doing well with the first two. $200 cash flow is still nothing to frown upon but I would start definitely make sure to save plenty of cash reserves for that property before you start taking that into your monthly cash flow.

I will look for your PM.

@Michelle Felux Love the story. 450-500 a month on cash flow is pretty impressive especially right now. Are you leveraging debt at all for these properties?

I have a great real estate attorney here in SA that I truly enjoy working with and she is very reasonably priced for the level of work that she does. The price depends on what it is you are setting up but for a simple LLC she charges. What I like most is she actually takes the time to make sure you understand why she sets things up the way she does and how to handle the LLC to make sure you don't pierce your own corporate vail. Which come to find out is surprisingly easy to do if you dont handle your accounting correctly.

I also have a CPA firm that is in the Stone Oak area that I have really enjoyed working with as well. 

Shoot me a PM and I can connect you with both!

@Marcus Jackson man 10-12 days is going to go by extremely quick for a hard money lender. While it can be done you are going to need to be extremely responsive to their requests. The vast majority of Hard Money lenders base their loans off of an appraisal which you will have to pay for (usually 350-400) and it is based on what they appraiser believes the ARV is going to be and they are going to need a detailed scope of work to do that. This where I see the majority of loans take longer and not meet their advertised closing times.

If I was in your shoes I would not already be calling every lender asking if they can meet your dead line but also getting a very detailed scope of work together from your contractors because without that the appraisal won't happen and the loan not close.

As far as rates. Right now the best product that I have seen so far is by Streamline funding. They have multiple products for different types of flips (depending on the level of rehab) at very competitive rates. Shoot me a PM and I can get you my contacts info.

Also depending on the title company they might make you disclose that you are getting a hard money loan in the special provisions. So make sure the title company is ok with you putting cash on the purchase terms even though it's a hard money loan. Trinity Title and Alamo Title are the worst that I have dealt with when it comes to investment type deals.

Best of Luck! let us know if you make the deal line!

@Dennis White I use safe loan servicing based out of Buda, TX. $30/month. they actually audit the escrow accounts every month and really stay on top of the loans.

@Andrey Y. and @Grant Garbo

Welcome to the SA area! I have been a full-time investor in this market for over two years and know the buy and hold market very well. I am a strong supporter of cash flow style investing over the appreciation style models. I put out a market report every month and also present at one of the local REIA's based in SA. From doing all of the market research I have it's pretty easy to see that SA is a cash flow type of city.

You mention that you are in town for a month. I host a meetup called craft brewed real estate of San Antonio and it is next week if you are looking for something to do.

I am also always open to sitting down over a beer or a cup of coffee and talking real estate.