All Forum Posts by: Waylon Themer

Thanks @Jerry Ta! Shavonna, I would be happy to help!

Hi @Eboni Taylor I would love to be a resource for you!  I'm a bank lender with rates much lower than hard money.  Let me know how I can help.

Here is a great secondary source from which to draw conclusions.  http://www.houston.org/pdf/research/quickview/Econ...

@Steve Rozenberg raises good factual evidence.  There is some truth behind the numbers that needs to be addressed such as the fact that there were 31,000 service jobs added in Houston during 2015 while goods producing jobs declined by 20,000 with 7,600 of those being oil and gas exploration.  On the whole the jobs being added are much lower paying jobs than the jobs being lost which results in the points that Steve and @Sharon Tzib bring up.  Homes below $250k as well as rentals below $1,800 have continued to surge and are seeing peak activity while high-end housing has been struggling for a few months.  You can look at decreasing office occupancy and decreasing sales tax receipts to see that the high end is very much dipping right now and will likely continue to dip.  Middle to low end has been unaffected but the trickle down could reach middle class housing if this trend goes on long enough and service workers are laid off.

87000 plus 40000 is 127000 on a property with an ARV of 110000. You are paying 17k above retail.

@Clyde Myers Jr CREAM is a good networking group of commercial brokers and real estate service providers in Montgomery County.  Here is a link to their broker list   http://www.creamtx.com/business-directory/wpbdm-category/real-estate-agentbroker/page/3/ .   I am in Houston and I have met numerous hungry brokers at groups like this.  I don't have many contacts in Montgomery county or I would point you toward one.  I looked at your property in loopnet.  If they are partitioned, you may consider marketing the three suites separately in addition to your current listing. It would expand your hits to people looking for smaller space or just somewhere to store  inventory and equipment for their home-based business.  It might be easier to get $750 a month for each storage space and $3500 for the office/loft as opposed to $5000 for the whole enchilada.  It does look like you are priced very competitively.  

Thanks for the mention @Jerry Ta!  I would be happy to look at the opportunity with you.  My bank only works with local principals so your partner would have to be local for me to get it done.  Either way I would be happy to talk with you about your opportunity and give you some names of other banks if we aren't a fit.  To answer your question, lending to llc's is common with the principals guarantying the loan.  Rates are usually fixed for 5 years and are typically 0.50% to 1.00% higher than prevailing 30 year mortgage rates.  Amortizations for small multifamily are typically 15 years and max out at 20 years with small banks. My contact info is on my profile if you want to discuss further.

I am very familiar with the area.  Depending on the perceived difficulty of raising rent or removing the tenant, I would be at $85k absolute max.  If the tenant seems like a difficult case, then $82.5k--$1500 to get the tenant to leave peacefully and $1000 to pay commission to get the house leased for market rate of $1200.  I will say that I think the houses in that neighborhood are of poor construction quality, but I buy houses built in the early seventies so I am no stranger to poor construction quality.  An 1,820 sqft house in that neighborhood sold for $108,500 in May after sitting on the market for half of a year. There is a 1,716 sqft house that has fresh paint etc. and has been on the market for half a year at $125k.

@Marco Santarelli could you help me understand your ROI and IRR calculations? Given the cap rate and coc I am not able to arrive at the ROI and IRR numbers. Also, are you assuming a 30 year mortgage? What rate? Thanks in advance!

@Connie Stainbrook From a Houston perspective, there is a lot cash available in the large multifamily marketplace and cap rates have compressed dramatically. Since houses don't trade on cap rates but rather sales comps and fewer institutional buyers purchase houses one or two at a time the price to rent ratio has actually improved in comparison to multifamily in Houston. With that said, I haven't seen many true 10% cap rate houses in Houston other than class C minus or D markets. Please be sure to include all property taxes (look for multiple taxing authorities, etc.), insurances, management, repairs, and vacancy in your analysis. Most of the B class SFR in Houston on the market is closer to a 6.5% cap rate (if you want to attach a cap rate to SFR).

Have you considered other commercial real estate that would be more passive than multifamily as an investment strategy? Such as NNN leased commercial space to good tenants. @Joel Owens of All World Realty is one of the sharpest commercial guys that I have seen post on here. He may have some ideas for you.

Because the overpass is 5 miles up the road and would take much more time and effort, all the while not providing the adrenaline rush that I need to get out of my system.  I want to take a shortcut at the risk of getting burned.   Much more exciting that way.

Seriously though, point taken.  Thanks for the input @Will Barnard!