All Forum Posts by: Will Pritchett

Hey Dusty Warner , welcome! I am a newbie here in San Antonio too. I have two rentals inside 1604 between culebra and bandera rds. Neither are within the 2% rule but they still cash flow. I like the 50% rule more. Tons of metrics out there but in my opinion there are factors the numbers don't account for. I think I could accomplish 2% rule in some war zones but don't have any interest in owning there. Sunrise is an example neighborhood that has dirt cheap houses but I wouldn't own there. Nickname for this 'hood is "gunrise". Best of luck!

I notice you are from Kyle but not sure how familiar you are with SA. Just FYI, the downtown campus and main campus are very different. The downtown campus is somewhat landlocked and much smaller than the main campus. That doesn't mean it is a bad deal but the area around campus changes quite a bit. The homeless shelter is a few blocks away and day laborers a line up nearby. However, in the right area it could be great. I just don't know of any students who live near the downtown campus because most students can only take some if their course work there. More likely to live by main campus and commute to downtown. Now as a VRBO type property it may be appealing just be very careful what is around it and know what you are getting.

I am no RE expert but I went to school there and have lived here my whole life. I am definitely not discouraging you - but in comparison I just picked up a home (with no condo fees) for 109,000 and have it listed conservatively at 1250/month. I have put about 4,000 into repairs etc. not a homerun but I wanted to get started and thought it would work.

Feel free to message me if you I can help you out. Just my long-winded two cents.

many states require you to have a real estate license. That's all I got

I would do some of both. I have two rentals in San Antonio and have some equity tied up in one that I know I should use with some leverage to increase my returns but the conservative side of me likes having that equity like an insurance policy. Although as I become more savvy at finding deals and my confidence grows, I will likely trade that property for a couple that have higher returns. I see the dilemma with being new and having all that cash to invest. Most of us have to learn slowly by virtue of having limited funds. Most people who are highly successful here are buying well below retail. I would think finding that many "great deals" in San Antonio within your 1031 timeframe might be the biggest challenge (especially being new like me). However, I just bought an MlS deal for 109,000 and should rent for 1250.00. Not a home run but I'm on base. I am not too familiar with 1031s - how much time do you have to reinvest it? Can it be split into as many properties as you choose? I guess if you bought eight houses like mine cash, you could still trade up or leverage out as you become more savvy?? You would just 1031 exchange again I assume but possibly with the advantage of finding one deal at a time instead of twenty-five leveraged deals in a short timeframe (if you went that route now). Of course one apartment building would be great too but that is way out of my league. Best of luck, Will

Edgardo Matos welcome. I am in San Antonio as well. We have 2 rentals in NW San Antonio. Happy to help you any way I can. I am a newbie myself but have lived here my entire life and know the city pretty well due to my line of work. Best of luck!!

I started my profile with only my last initial (paranoid I guess) but have found this to be a well moderated and civil forum. I went in to edit my profile and add my full last name and couldn't find an option to do so. Am I missing it or am I locked in now? Is it a function that the site administrator can change? Thanks.

As to exit strategy, I have only thought about acquiring and managing these homes (and hopefully many more) and one day passing them on to my kids free and clear.

Man, those are all great points and questions. Maybe I should look again at the equity there. The current rate is 5.25 on FHA loan. I just closed on an investment property last week at 5% so I would hope to keep the rate close to what it is now. Going to a 15 year note wouldn't improve my current situation since I am at about a 15 year payoff now anyway.

Selling and taking my equity to a better property is an option but I see more appreciation in this property than in the neighborhood where my other property is (which cash flows more). I also dread the transaction costs of a sale. I bought this house with almost nothing down so my initial investment is minimal. I am still a newbie so balancing debt paydown with cash flow and appreciation just has my head spinning a bit.

Our long term strategy is buy and hold.

I am coming at this from a former Dave Ramsey addict's perspective. I want to use leverage but fear what that leverage can do when used against me. In real estate I hear about leverage being used to our advantage but I don't hear much about when it works against us. I am trying to figure out how to hedge my bets a bit and I guess I see that wasted equity as a safety net sitting in that home in case I'm not as good an investor as some of you seasoned folks.

Are there any threads here about those who were overleveraged in '08-'09 that failed or others that weathered the storm? I just want to be realistic about both ends of the lever.

-Will

I have a rental that was bought as my residence about twelve years ago. Cash flow neutral after expenses. Value about 165,000.00 Purchased at 130,000. Owe 90,000. Will be paid off in 15 years as it stands. Trying to decide whether or not to refinance to increase cash flow.

Last year tenants paid down over 3k in debt for me despite the lousy cash flow. I naturally lean towards paying down debt for the eventual jump in cash flow when it is paid off. The other option is to refinance the existing balance to increase cash flow by maybe 200 dollars. Interest rate will probably stay about 5% if my numbers are right. I would roll fees into the loan probably.

Other pertinents: I have one other rental that we recently purchased (with better cash flow) and hope to own many more. I am teetering between these options right now. Any increase in cash flow would be used to purchase more rentals and build reserves. The numbers aren't huge in either direction but I would love to get some feedback to see this decision from different angles.

Thanks,

Will

Hello Alex, I am in San Antonio too. We are buy and hold investors. Feel free to message me. Good Luck, Will