All Forum Posts by: Luciano A.

Hey everyone. The current listing of properties in the Third ward are over priced. I agree with @Cody L. and I do own properties on Truxillo and Isabella. There are too many of these properties that makes no sense after you look at the rents and what you have total invested into the deal. However if you go on the other side of Ennis which I still think is considered part of Third Ward its a little rough but you can get a fixer for alot cheaper and can flip or do BRRR strategy with decent returns. I know the investor who owns half of those buildings boarded up. He is too lazy to want to do anything since they were all bought by his dad 20-30 years ago. If he starts selling his portfolio to investors it will change the dynamics of this area very quickly.

Third Ward, EADO and almost all the other wards are already on the high side. I think if market takes a turn south how are you going to compete against the landlord that owns same duplex on your street but can reduce the rent to $800 and still cashflow where you need to rent for $1200 to break even.

Many of us who bought in 2008-13 got these properties for dirt cheap. If you are seeing prices that are over $80-$100 per sq ft or cant even break the 1% rule with rents then dont buy. Appreciation is icing on the cake and should never bank on it.  

You got to look at areas of town that are showing signs on improvement not because of the hurricane but new construction, building permit increase. 

Cashflow is king if you are buying 4 units or less. 

@John Do

I personal have experience with this and so this is how I would advise you.

While you are saving up to buy this 4plex you should take time to read all you can about managing property and start seeking out contractors that work with investors so you can have their info in your phone when you finally need their services.

You can setup an LLC in your state under a property company name you want. For example call it Smart Property Management Group LLC.

• Get a bank account under that LLC name
• Get a UPS/FedEx type of mailbox...not a Post Office PO Box. 
• Get Google phone number or use Magic Jack, Grasshopper to create a business line. 
• Business card with your company name, address to Mailbox but you will put 123 Main St Suit 456 so it sounds more like an office than a mailbox.

Once you purchase and move in you can send letter or post to each persons door introducing yourself as the on site property manager for Smart Property Management Group LLC. Advise them when rent is due. And I would advise them to deposit rent directly into your LLC's bank account on day rent is do or they drop check at your door listing check as your business name not in your name.

You can get lease agreement from this site directly for like $99. 

Dont hire property management company. Waste of time given you will live there and will know when issues arise. So regardless you will get phone to notify you or get your approval. 

At first will be weird because there will be existing tenants there but once you have new batch come through while you are living there it will be easy to pass off as the manager. 

I now own over 50 units and they still dont know I own the properties they just think I am the property manager.

Hope this helped

If you have a local real estate group or local meetup from BiggerPockets in your area then you should take her with you. A buddy has same issue. However, they did not have kids she just wanted to enjoy her money now and not worry about future. Hearing how others held of instant gratification for just a short period in order to set themselves up for a better future. Missing the annual summer trip for one year so you can get into real estate and now that rental can help pay for juniors college might get her to see that this real estate thing might have some worth to it. 

Remember this property is still considered a residential property not a commercial. Banks and appraisers use Comps to figure price. They will use the rents it generates as a way to look at the property but the area and other 4plexs sold in the area will give its value. Commercial properties and or 5 plus unit multi-family is how you should use NOI,Cap Rate. Doesnt do any good to use to analyse a single family property.

@Russell Brazil . I agree with what you had to say. Coming in with little money to the table will leave you making little money out of the investment. Leverage is great if you use it correctly. You must be a great asset to your investment clients in your part of the country. Always appreciate an agent who can speak investors language.  

@Steven Smith 

I am not a big fan of investing in a deal in which you dont make money from day one. If you arent getting cash flow or wont have equity when you buy it makes the deal hard to swallow. 

However, you mentioned you have always wanted a 4plex and dont mind living in a 4plex. A typical first time buyer might buy just to live in for a year or so but if you can see yourself living in it for say 5-7 years (if you have to) then you are using the tenants to help pay down the mortgage and eventually might be able to use appreciation strategy down the line to move out and eventually turn into an investment. Did you see how many times I used eventually. It is risky but if you can carry the negative amount per month, potential vacant unit from time to time then you can hold until property cashflows. 

I remember my first deal I had to sale everything to get into the deal and was fortunate not to loose my shirt. I wouldnt recommend to everyone but you sound like a person who can take the risk and fight through it. If you are prepared to hold onto it while you get rents up then I would not discourage you. However, I would say at this point it would not be an investment but more of an opportunity to buy your own home with the help of a few tenants. It is like buying a SFH and renting out the rooms. The rents might not cover all your cost but you get to own a piece of the American Dream.

@Armand Farr As Cody mentioned in one of his posts here.... find areas that are more Hispanic population and you can find good deals. If you look at the triangle between 45 and 59 in the Hardy Yard area can still get older homes for good price and good cashflow with good potential of appreciation. 

@Cody L. You make a great point. I see EADO play as a safer beat for the same reasoning you have. Congrats on the two deals. I have seen a few of your properties and respect your work. Fellow CA in Houston. Cheers

@Sean Yuan EDO area is already too hot. I bought back in 2009 and 2010 for like $80k for duplexes and triplexes. Now these properties are valued over $300k. If you have the stomach and want to see both appreciation and good cashflow look at SunnySide area of town off Cullen and 610 before Belford. Lots of new construction over $180k that is selling. A builder worth looking at is Mayberry Homes. They get into areas that was considered war zones at the right time and have made great stride in selling. I recently bought three properties in that area and have done the BRRR method and have no money in any of those properties but cashflow over $400. Just thought I would share my thoughts with you. Best of Luck

@Jay Hinrichs

@Clayton Coombs

 Jay great point about GOZONE. Something I recently heard and am doing research on, is Trump's new Opportunity Zones suppose to give great tax benefits to both flipping and long term holds. In Houston we have a few great buying areas that are not really war zones that is included in this new tax savings plan. Heard many Hedge Fund Managers are raising capital to target these zones across the country. Does anyone have more info that they can share so both Clayton and the rest of us can use as potential investment strategy.