All Forum Posts by: Yasir Einaudi

Hello @Dustin Nygard,

I am glad you are looking at the taxes before buying a property, It can be a deal breaker or a deal maker in El Paso, It all depends how the city has assessed it. Now, the difference between NM and TX, is that in TX you do not have to report back to the city at how much did you buy the property whereas in NM the buyer is responsible to do so.

Now to answer your question, Current Tax Levy is the amount that is due for this year's taxes which are to be paid before the 31st of January of 2020 without having to pay any interest charges or late fees. If you were to buy the 4-plex you will only be liable for the prorated amount of $7,639.98 entirely depending on when you close. i.e. the seller will pay his share (Jan - August) and you will pay your share of the bill (Sept - Dec). Make sure you ask for an estoppel certificate before you close and have all of the tenants sign it, as well as get all of the leases and read them. A lot of the time REALTORs inflate the numbers just to sell the units.

Good luck!

Any questions I am here to help

Thanks

Yas

Hello @Juan Martinez,

Glad you had a good start in your RE career with your live-in flip. There are several ways you can find good deals, one is straight from the MLS, there are a number of deals that pop once in a while, make sure you find a good agent that can identify these and send them to you. 2nd is through wholesalers but most of the time these properties are in terrible shape which makes them hard to get a mortgage, as they simply won't qualify the bank's appraisal.

Have you consider doing another live-in flip? Perhaps in a multi-family? That is where you will get better CAP rates on your rentals. I am not saying that residential won't cut it, again your agent will be able to tell you which areas have better rental rates than others.

If you manage to convince your spouse to hold on the new construction until later once you have enough cashflow from your assets, you will reach your goals much faster.

Now, here are my two cents, I personally do not recommend buying a new construction as you are basically eating the depreciation (just like buying a new car), as soon as you drive off the dealership you will never be able to sell it for the price you pay it unless you bought a McLaren P1 which was a special edition road car, only 375 units were built (plus 10ish development cars) but I regress, also new construction tends to be on the outskirts of the city where appreciation takes longer to build up (if any). 

Regarding your cash constraint point, The first one is consider using OPM other people's money, either by getting a personal credit line (Both me and my wife got one on a local Credit Union) Interest is 10% but there are no points or fees, it's not ideal but very useful for quick cash. Another way is to consider using private money AKA hard money lenders, I know a couple in town and offer different terms, points and interest. You can know if the deal is worth doing it, by running the scenario with the hard money lender's terms. And you can consider partnering with someone that has the cash and you offer your know-how, skills, property management, etc..

Good luck!

Yas

Hello Mathieu,

I understand your concern, I am foreign national myself now resident, I work with a local Texas lender that can lend to foreign nationals (Mexican and International) but will require 30% downpayment which is not ideal, furthermore the interest rates are going to be around 6-7%.

Perhaps you can look into seller finance and negotiate better rates? Else, you could partner with someone that can have access to better debt service terms?

Furthermore a deal that doesn't work with a debt service of 7-8% interest rate, it's not good enough deal for me. As I work with private financing and that's what I pay for anyway.

Hope you can work something out!

Yas

@Miguel Luna Great that you are thinking of investing in Real Estate, it's the best way to generate long term wealth, if you do it right you can become financial free in years and not decades!

@Gerhard Listander said it perfectly, you can use a VA loan with a 0% down payment to get a multiunit property (duplex, triplex and 4-plex) live in one unit and lease the other units - you can even lease out the spare rooms in the unit you live in -if you don't mind having housemates of course. If you do it right you can have your renters pay for your housing expenses and benefit from the appreciation and equity buildup.

Hit me up, if you need further assistance  - I am local real estate investor and realtor in El Paso, Texas.

Yas

yasireinaudi.com

Hello Draven,

Regarding the EL Paso Area, There are a ton of students - over 24,000 of them only in UTEP, not counting the Texas Tech, nursing colleagues and Community Colleges, etc. On Campus Housing is almost nothing, probably about 200-300 units If that.

Properties around UTEP tend to be pricey, Sunset Heights, Kern Place, Mesa st.

Most students get together and rent apartments, and some share bedrooms.

ROI depends on the type of property, if you rent rooms out, or full units.

Ft. bliss is another massive market which you probably know already.

Partnerships are common here, I’ve partnered in my last deals, also, I know a wholesaler that is opened to partner - I can introduce you guys.

regarding the earnest money on average is about $500, but I know of a wholesaler that staples $1 bill to the contract lol, it’s all depends how serious you are I guess.

Anyway, let me know when you are in town. We can meet for a coffee.

Thanks,

Yas

Thanks for your thorough response @Irina Belkofer,

You are right in asking for a more complete info, but that is the purpose of asking questions, what’s the beauty on laying all the ground work without any effort from your side :P.

And yes it is true that the sun is always shining here (moved here from London so I can brag about the 24/7 availability of Vit D).

To start, we never saw houses in this market that you could buy for $40-50k and that you could rent for $1,200. I now understand why appreciation is so important in your market lol.

Another point that we missed mention was OPM, and what is the ConC returns which are real returns.

I would never use cash to buy a property and leave the entire investment there nor I would recommend it to anyone - that is the beauty of REI, if you had to pay in cash, simply add value, increase rents etc, then refinance and take 70% of the ARV.

I send my clients weekly deals and is not hard for me to find ConC returns of 20-40% with CAPs of 8-12% more through wholesalers or the MLS.

You should come and visit us some time Irina

Cheers!

Yas

@Edith Arreola

Welcome to El Paso! Glad to welcome people from Austin! we really hope you LOVE El Paso, let me know if you need any info on the market, etc.

Now to answer your question, Are you planning to keep the property and use it as a Short Term Rental or regular rental? 
Austin has seen a lot of appreciation during the last few years, which can continue to go up or not and that is the risk, I call appreciation simply speculation, there is ZERO control that you can do if you only invest with appreciation in mind. An investor makes decisions on how much a property cashflows, where is it located, vacancy rates, and all of the demographics of the area in mind, but it never invests with appreciation in mind as it's simply impossible to quantify it. What if a large employer moves of out town simply because it became too expensive? Rents might go down but not as much as what the properties will. It could be your time to cash out on the appreciation you have and use some of the funds to start investing in a cash flow city? Could be Tucson, or El Paso? or even somewhere in Ohio. Preferably invest where you live, if the numbers make sense of course.

I know that rents in Austin are not as good as other cities, 

You can rent a house here in ELP that costs $150K for $1400 or more a month if you know where to buy (much better if its multi family units). What about Austin? How much could you rent your house vs how much it costs?

Good luck!

Yas

@Irina Belkofer Thanks for reading and for your question,

I was giving an inside of the El Paso Market and I am opened to answer questions from fellow investors, 

To answer your point, We get at least 1% on multi family and up to 1.5% for MFH of more than 5 units here (more if you buy at 70% ARV). I know Ohio has great rent to purchase ratio specially Dayton, OH - from the last time I was there.

What is a common rent to purchase ratio in Cleveland for MFHs?

Appreciation is important to me but it's a nice bonus not even counted during analyzing a deal, as its pure speculation and its considered passive investment - we are in the business of real performing assets through value added activities (such as rehab, increase rents, etc). Plus there is no appreciation field in any flip or rent and hold analyzer that I have seen.

Have a great day!

Thank you for sharing @Dennis Juanir,

ELP is definitely a great rental market, I am not to sure about the Flipping market as there is way too much competition.

If you are doing one deal at a time without a pipeline of deals, your operation costs will increase.

Finding a fix and flip deal on the average house price of ELP of $140 - 150K ARV means you have to get the deal for $91 to $105K and that is not counting any repairs you have to do. Houses on this price ranges are super hard to find even with wholesalers. I have to agree with @Eduardo Sanabria, a property over $300,000 takes much longer and it's harder to sell in the area.

On the other hand, great deals of rent and hold properties are much common in the area due to the massive renter's market, El Paso is full of renters due to Ft Bliss and the universities in the area.

Good luck in your next flip! 

Hi Guys!

El Paso, Texas is the right market to find investment properties, here are a few things why:

The Cheap Real Estate

The average home in El Paso costs around $130,000- $150,000 which is 30-40% cheaper than the national average, $225,000.

Large Military Market

Any city that is home to a military base will be home to a large population of renters. Fort Bliss, one of the largest Army bases in the country.

Sizable Student Market

The University of Texas at El Paso is one of largest colleges in the state, there are over twenty thousand students at UTEP

High Demand for Affordable Rentals

The median household income for the US is roughly $55,000. For El Paso residents, it is only $42,000 a year. This creates high demand for rental properties.

The Strong Job Market

El Paso job market has an unemployment rate of around 4%. It hit a low of 3.7% in 2018, below both the Texas state and national average unemployment rates. El Paso’s job market is quite diversified, and it is seeing gains in areas like healthcare, government, finance, hospitality and logistics.

Furthermore,

I have personally seen an increase interest from Out-of-state investors that are coming to El Paso to invest in Real Estate which confirms how good the market is here.

Let me know if anyone need more specific information on the market with regards CAP rates, neighborhoods, etc.

Thanks!

Yas

yasireinaudi.com