All Forum Posts by: Matthew Rolf

Hey Everyone,

I have a colleague that will be representing a seller for a home in Rustling Oaks (South West of the Beltway & 10 intersection).  Her seller is still in the process of packing and moving.  The home is outdated and might need foundation work if only updated.  The home is a single story 2300 sqft home on a 10,400 sqft lot.  Once listed they will be asking 540k (she hasn't said anything to me, but I'm guessing its negotiable).  Several other properties in the neighborhood with similar lot size have built 2 story homes, 4000sqft ish and have sold for 1.2-1.4M.  

Not sure if that's enough meat on the bone to entice someone for a big flip but figured I'd check.

Please PM me if interested.  Thanks!

@Krishna Kiran without knowing a whole lot of specific info I think Mark gave good advice, especially if the price difference is 30k.

@Khang Pham awesome!  So happy to read your experience.

@Cristian Galvan yeah I get it for sure.  The best thing on the buyers side right now is the low interest rate.  Overtime, you'd assume rent rates will increase faster than your taxes and insurance (and your property will likely grow into and past a 1% rule property).  

@Cristian Galvan are you open to a light rehab?  Or are you strictly looking turnkey?  If you are willing to do cosmetic updates the ability to get 1% rule is definitely doable now.

https://www.biggerpockets.com/...

Hey Enrique,

Here's a recent BP article if it helps.  I can ask around my office as there are also several other realtors who invest.  Looks like we are nearby neighbors.  Keep Crushing It!

@John Nguyen I wouldn't say so. And just remember, your home should continue to cash flow more and more each year you hold the home as rents rise faster than your insurance / taxes do. Using the 1% rule works here, especially in lower tax areas.  I own a rental in old Katy that has done well, nothing crazy, but similar to things you are describing.  If you're willing to do some work, then there are much more possibilities.  

Very Cool!  I've actually been to Blue Ridge, I'd be interested to hear how you do there.

Hey John!

Yes Texas tax rates are high which keeps some investors away.  As you might have already figured out, most of the areas with more established / older neighborhoods you will find lower tax rates (2.4-2.75% ish).  When you are looking at new builds, usually the MUD tax will be higher which baloons your tax rate above 3% sometimes as you mentioned.  If you are holding long term, that MUD tax should come down.  Katy and Richmond had many areas that you described, but for your rental, if you're looking for the highest rated schools, you might have to be patient.  

Areas that might be worth checking out going north (not all in Montgomery Co) that might fit your criteria would be Tomball, Klein area, Cypress, Champions, a few sections of the Woodlands, Humble just off the top of my head.

Investment Info:

Single-family residence buy & hold investment in Katy.

Purchase price: $147

Purchased for 147k in Old Katy. Rehabbed for 16k. ARV of 195k. We were going to BRRRR, but now are leaning towards doing a 1031 exchange if Hawaii vacation rental markets soften. We bought end of Feb 2020 and had renters in by May 1st 2020. We ended up meeting an amazingly affordable and trustworthy contractor towards the end, so that will be a huge help next time.

What made you interested in investing in this type of deal?

Well, I only had to listen to about 250 BP podcast episodes before I took action, ha

How did you find this deal and how did you negotiate it?

Scraping the MLS everyday. Simple negotiations from 155k list price to 150k + 3k closing costs assist based on comps / condition of property.

How did you finance this deal?

Conventional Loan 25% down.

How did you add value to the deal?

Sweat Equity

What was the outcome?

TBD. We have great renters and cash flow after expenses, but have plans for a vacation rental in Hawaii someday.

Lessons learned? Challenges?

Don't over rehab. Rehab costs will be more than you think.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was a Physical Therapist and I was interested in investing for a long time. Finally we did it. Now I have my real estate license and am LOVING it.