All Forum Posts by: Ronald Rohde

Good morning Abhi! That's a pretty general question - is there any additional information that can be provided?

Generally, the TX real estate market is very strong and thriving right now as companies and individuals are relocating and the state supports a robust economy. There's a lack of "attainable" (not affordable as I was told recently by a city official) in many of the desirable metros and suburbs. That's a play there, but land is so expensive now that unless you buy it years in advance, your upside potential is going to be limited.

You might have some luck with manufactured park development as there's a growing need for that product, yet it's not sexy and so no one focuses on it.

Are you sure its still there?  I got a quote (in central Illinois) about a week and a half ago for 5.5% on a duplex, 5.75% on a tri for a 30yr fixed. Although I think the 10yr has moved down a bit since I got the quote.

I'm a newbie investor in Texas, but I've already learned a few hard lessons, so take what I say for what you wish. 

If they are requiring all cash, is it because the property will not appraise under a standard or FHA or VA loan? That's what it sounds like to me.

Which means it needs a lot of repairs, maybe as much as $30k or more, including new roof at maybe 10k. And will it be worth it after the 30k-40k repairs? No, it will negative cash flow, big time.

A HML will not loan on a property that either: is not rent-ready; is not priced low enough to compensate for repairs with a profit margin built in; does not cash flow with a margin for selling costs built in in case they have to foreclose on you; or that will not yield enough rent to provide that cushion.

It seems that you are from California, like me, and saw the prices in Texas and thought, wow, what a steal, when you are looking at shacks in your area for 1.5M. Don’t be fooled. The prices are lower because the rent is lower – much, much lower, and property taxes are high because there are no income taxes, so the money to run the state has to come from elsewhere.

I'm concerned that you are being ripped off, frankly. The good deals, or even the prize OOH, are being snatched up within one day, sometimes one hour (in my recent experience in San Antonio), so if this deal is hanging out there, it’s because the sharp investors don’t want it.

How many years old is this property? Roofs do not last long in the hot Texas sun, they disintegrate. They are composition – I don’t understand why they don’t use concrete tile roofs, well, yes, I do, it’s b/c they aren’t Mediterranean style construction. (Still, they could do flat concrete, but probably don’t b/c of cost.) I’m under contract for a sfr in SA and I could kick myself – the roof is at the end of its life at only 18 years, but the owners quickly patched up the few loose tiles within 24 hours and pretend like everything’s okay, and what can I do now? I can’t back out because it’s a 1031 exchange, and I have no time left to select property.

It was newbie lack of experience on my part, and also the agent had no interest in advising me much, only to tell me which areas he wanted me to buy in, the areas that would be the least management headache for him and make the biggest 10% commission. Oh, he offered me a discount of 1% on the management commission, but in my mind, that’s only so I won’t be such a demanding owner. I won’t take the 1% discount; I plan to demand full service and high level of pickiness in selecting tenants etc.

Have you spent time in Houston going over the market with a fine tooth comb? You should do many hours of research on Zillow, both the buy and rent sections, to get good ideas of the market, and of what your ROI will be, and then make a trip there of at least a week to do your due diligence and maybe find a good investment. There are thousands of sfh for sale in Texas; this is not the last one. Take your time.

• Thanks Ronald. I do not at this point. I came across these two properties recently and is trying to get information about them in order to see if there is a deal to be made. Just having problems finding the owners to determine if they are for sale and if so, what I should do next?