Houston, TX- 5 Properties- Kevin Wood
Followed the heading posting above. My 2nd post on this particular is not to ask for advice on a condo, but to share the first 5 properties my business partner and I purchased. All are located in Houston, TX. All are currently rented with the exception of one property where sale is conditional on new carpet, new paint, and rented. Not included here are holding costs at 8%. Insurance amounts are high. All costs are yearly. Here is a rundown of the properties operational costs. We have vacancy estimated at 8% and closing costs etc. :
#1 3 Bedroom 2 Bath
Purchase Price- $88,473
Rent Per Year- 12,806
Mortgage- 4287
Insurance- 500
Taxes- 1,914
Maintenance- 957
Management- 1,025
Miscellaneous- 1,000
#2 3 Bedroom 2 Bath
Purchase Price- $73,727
Rent Per Year- 10,113
Mortgage- 3,572
Insurance- 500
Taxes- 1,541
Maintenance- 770
Management- 809
Miscellaneous- 1,000
#3 3 Bedroom 2 Bath
Purchase Price- $93,388
Rent Per Year- 12,696
Mortgage- 4,525
Insurance- 500
Taxes- 2,056
Maintenance- 770
Management- 809
Miscellaneous- 1,000
#4 3 Bedroom 2 Bath
Purchase Price- $69,795
Rent Per Year- 6,996
Mortgage- 3,382
Insurance- 500
Taxes- 1,500
Maintenance- 729
Management- 795
Miscellaneous- 1,000
#5 2 Bedroom 1 Bath
Purchase Price- $58,982
Rent Per Year- 8,777
Mortgage- 2,925
Insurance- 500
Taxes- 1,287
Maintenance- 643
Management- 702
Miscellaneous- 1,000
Hi Kevin,
Do you put 20% down to get the mortgage? What banker did you use? What are your rates?
Originally posted by @Amy Nguyen:
Hi Kevin,
Do you put 20% down to get the mortgage? What banker did you use? What are your rates?
We did conventional loans for four of the properties and used a mortgage lender. Our 5th property we bought with cash. For conventional there isn't going to be much variance in who you use as they all re-sell their loans anyway. You will see a lot of variance with portfolio lenders.
Did you have your own liquid capital for down payment money? Or did you raise it from investors?
Originally posted by @Trevor Rutherford:
Did you have your own liquid capital for down payment money? Or did you raise it from investors?
We had our own money in capital.
@Kevin did you scope out a good property management co. before you bought, or after?
Originally posted by @Trevor Rutherford:
@Kevin did you scope out a good property management co. before you bought, or after?
We property manage ourselves. I would highly recommend this early on as it gives you exposure to what that job requires and the type of requests that come in. My business partner's mom works part time for us as well to handle some of the day to day (4% of gross).
@Kevin I own and manage 4 rentals in my Local market (do some of the work myself). So Managing remotely, What do you do when a tenant calls about something like a plumbing issue at an odd time of the day. Toilet ext. Or here's a good one, you require them to cut the grass and they don't and you get a notice from the city and you are over a 1000 miles away.
Originally posted by @Trevor Rutherford:
@Kevin I own and manage 4 rentals in my Local market (do some of the work myself). So Managing remotely, What do you do when a tenant calls about something like a plumbing issue at an odd time of the day. Toilet ext. Or here's a good one, you require them to cut the grass and they don't and you get a notice from the city and you are over a 1000 miles away.
I have two local people on the ground (business partner and his mom) so I am lucky in that regard in that I am most often just offering my opinion. If I was in your shoes would 100% pick a property manager. The way I would do it is ask some of the mentors I have met in the area about who they recommend. We have a guy we use for general maintenance that does good work for us and pay him with Chase QuickPay. I'm no expert on remote management, but everyone I know and read recommends having someone on the ground.
@Kevin Wood Do you make you tenants on SFH pay their own water and if so, How do you enforce it?