All Forum Posts by: Leland Barrow

Basically what Greg said. Markets are not perfect and you will have lag. There is a lot of reasons why lag happens. The biggest one is seller mindset. People can be slow to adapt to changing markets. Sooner or later they

Canyon Lake is pretty small. Good inventory is low in SA just like many other places. You can find cheap houses but the size and condition will be sub optimal. Direct marketing is the best way to find deals but there is some pretty good competition going on with mailers. There is a strong Spanish speaking wholesale market that does a good job uncovering deals. East side San Antonio is a hit or miss. The good news it is fairly easy to recognize the areas to avoid. Outside both loops is doing good. North West, North and outside 410 are good. Competition is getting strong in some of the smaller towns. If there are a lot of houses on the MLS in certain areas then you know those are low demand areas. You can do some secondary research on Zillow and define your own target market. That will be better than getting advice. If wholesalers are working certain areas then direct marketing is not going to be as effective. Don't follow the herd. Instead define what you are looking for and work backwards. If your target house is 3/2/2 1965-1999 100-175k then that eliminates a lot of areas. Look at what schools are getting better. Look at areas that have low unemployment and new jobs. Are there areas that are being revitalized. Road, construction projects? If you get answers from here then you and twenty wholesalers will be marketing to the same people. Outside SA are great areas to look. In this market you really need to know what you are looking for. Beware of buying cheap just because it is cheap. Good deals are hard to find in Austin or SA, the only difference is that bad deals in SA are 200k cheaper.

Considering millennials are the largest generation and they prefer to rent then it should be better than yesterday. Competition with buy and hold is tough in millennial dominated markets. 

I don't think you can get a HELOC. You can get a LOC through a portfolio lender. You can also try talking to the first position.

@JR T. are you stalking and trolling lol? You brought up Karma in a completely unrelated post. Yes, I believe in Karma but I think in this situation you are projecting your issues onto a deal. Business is business and as long as people are legal and ethical then people have to own their decisions. To say that no one can work a deal to get the best possible purchase price, because it is taking advantage of people is ridiculous. REI is about buying right, if you always buy at market value then being a successful real estate investor will be extremely difficult. Just because the OP is working this deal does not mean that I would. However, from my perspective I do not see that he is doing anything wrong with the little bit of background info that he gave. Real estate investors tend to be solution finders and the art of every negotiation is about negotiating solutions that benefit both parties.

You jump on here and tell a dramatic and contrived story about a deal that has nothing to do with what Austin had originally requested in his post. Chasing me down in another thread to make it look as if I am a hypocrite is hardly a noble decision. I guess it is unethical to take over payments on a car that someone cannot afford? I guess it is also unethical to buy a wedding ring from a pawn shop, because whoever pawned it needed money to buy groceries? My point is that people make all kinds of decisions, sometimes they are motivated by things in their life that we cannot understand. REI is a way to earn money so that people can support their families. It is not about taking advantage of people. However, it is about finding people that are motivated to change their situation and then helping those people with solutions. If it is ethical, legal, and the person is of sound mind then I wouldn't lay awake at night wondering about why they want to change their situation.

I apologize, I forgot to bring my crystal ball today so that I can prognosticate when or why people make decisions. I see that you have yours.

Haha I would ignore some opinions on the internets. You should get a lawyer. Consider a "subject to" purchase. It does not appear that anyone will call the loan. You can continue making the payments and the current owner can avoid foreclosure. This will give you time to get it all unraveled and if the deal goes sideways you can have very little cash in it. Is it legal? Is it ethical? Is the person of sound mind? If the answers to those questions are "yes" then don't stress why people make the decisions that they do.

Cashflow meaning all of your monthly expenses are lower than the rent. Cashflow is used in buy and hold strategies and comes down to making a few hundred dollars a month in net income. Cash flow calculations should include major expenses like roofs, A/C etc. There are calculators on BP for this. Having a mortgage payment of 1000 and rent of 1200 would not mean the property has positive cash flow. Even if you are not planning to rent you should still use it as an additional exit strategy. You shouldn't buy based on appreciation. Appreciation boils down to speculation. Look at appreciation as an added bonus. I hope that helps. Personally I would not buy a property that will not break even in cashflow if I need to rent it. This includes personal residences. That is how investors get caught with their pants down. But everyone has different strategies. I prefer not to worry about things out of my control so I control everything that I can.

I am not in your shoes nor would I want to be. I have sympathy for your parents. It must be tough to fight wars in your golden years and build a legacy of conflict. I also have sympathy for investors that are trying to provide for their families and to build their own legacy. People make mistakes, and people make poor decisions. I read the articles and I have a hard time not looking at is two stubborn groups of people that lack common sense and empathy. It appears to me that it is miscommunication and a failure constructively relate to people that has caused the problems. When you draw a line in the sand and dare someone to cross it you shouldn't be surprised when they do. From an outside perspective I see at least a dozen reasonable solutions to the problem. The situation is very simple and boils down to the facts. A 1 acre parcel of land was far more important than anything else including peace. Two groups of people decided that they were not going to give in and it became about the fight instead of the solution. When people say "It has never been about the money, it is about what is right and wrong". Then that means they have lost all ability to be reasonable. I fail to see any nobility, values, or principles in the situation. Instead I see just conflict and drama. Working hard for money is just a cop out. Money is an arbitrary thing, it is nothing more than a concept. In reality it is paper that is only valuable because of the law and order of society. Land is just land, it does not belong to anyone. You can take possession of it for a short period of time but eventually all land goes back to the only real owner. Neither money or land is worth over ten years of drama, and it definitely not worth harming or attempting to harm anyone physically or financially. All I see is a bunch of people that have poured time and resources into nonsense. There will be no million dollar payday at the end of this rainbow. Like any legal situation the only people that really benefit are the lawyers. Considering that the lawyers that were involved are even getting sued I bet they have a bit of regret. I doubt any lawyer in his or her right mind would want to get involved with this. Most people realize when a situation is toxic to the point that involving yourself would be a great mistake. Especially when one group of stakeholders is so actively trying to get sympathy from the general public. As a member of that general public I would advise that you do yourself and everyone around you a favor and make a decision that some things are just not winnable, and some things are just not worth the fight. I believe in Karma and this has bad karma written all over it. That is mostly because there are so many other people that are basically innocent and have to deal with the collateral damage. You may think I am a jerk and that may be very well earned by my post, but the truth is I am trying to give you the best advice that I have. I am also trying to give you a perspective that you might want to consider. People hate hearing the truth and sometimes they would rather burn down everything around them instead of listening to the blunt advice of other people. 

Oh and San Antonio is a much better option than Austin. Buy and hold is a better strategy there and the prices are better. However, San Antonio has a lot more areas that have extremely low appreciation and home values are locked for years to come. If the home or homes nearby have bars on the windows then it is strictly a cash flow option and managing it will require more time and effort. For a 100k+ cash flow plays open up outside the loop and are great areas for buy and hold. North is probably the best area for the next few years. Schertz, New Braunfels, and even San Marcos are hot. There are a lot of professionals that travel back and forth to Austin on I35. As Austin polarizes it is going to pull the housing market that direction. You can find cash flow almost anywhere but appreciation plays will be West and North.

A little bit of advice. 1. At that price range it will be very difficult to make a profit if you decide to rent. You should have multiple exit strategies. 2. AirBnB is going through a change in Austin. Your business model puts a lot of control into the hands of the city regulators. 3. The best deals are East or in the suburbs. South is and will grow faster than other areas. My advice is look for 150k to 250k homes on the outside of Austin. Run your numbers and buy a home that you can rent for positive cash flow. Anything inside Austin now is going to have to be a multi-family to safely cash flow, a rehab, or a teardown with a new build to really be a good deal. Austin proper is probably not the best place to dive in as a new investor. Most deals are going to be crap because it is so heavily marketed and there is fierce competition by very experienced investors. The suburbs are a better place to educate yourself.