First multifamily investment property in Houston, TX. Need advice

[Denita Ozenne]

Hey my BP's. My fiancee and I have finally mustered up enough courage to start looking for our first investment property. We are in Houston, Tx. looking for a multifamily property, not looking to spend more than $130K. Preferably a tri or quad and we do plan to "house hack". (Live in the investment property). Looking to BRRR (Buy, renovate, rent, and repeat).

Now for a few dilemmas that I would love and truly appreciate a little guidance on:

I am new to Houston and am unsure of the best locations to buy my first investment property.  Houston is massive and location is everything, so there in lies the problem. I also need to know the potential war zones to avoid as Im looking to buy low. I don't necessarily want a low income property, especially not as a beginner.  Would love suggestions on growing, SAFE areas in Houston to focus on. 

I have also contacted a friend that is a RE agent. Although Id like to keep the property under <130k, as I do want a property that requires some work, my agent keeps sending me homes in the $160-205 range. I truly need an agent who understand investing, which is crucial since I know very little. If anyone fits that bill, please contact me. We are currently gathering needed info for pre approval  and are ready and willing buyers, of the right deal of course ;). 

And of course if there is any advice you'd like to offer a first time investor, please do. What can I do, read or listen to that could help me throughout this process? What is realistic in the Houston market as far as multi properties? Is my price of Less than $130K too high or too low? I want to make the RIGHT decision, so please if you have any tips  Id love to here them. 

HELP! :)

[Doug McLeod]

Houston is not the best house-hacking city by a long stretch. Generally there are just not that many 2-4 plex properties that are not part of a condo/townhome association. And for the properties in the <130k range, you will be hard pressed to find one you'd want to live in. On the other hand, you can find some decent older homes (late 70's early 80's) that have been nicely remodeled (or need to be) in that price range. There is very little inventory from 1985-1993 or so because of the oil bust and related housing crash in Houston from that time. Deals on properties from 1994 and later are MUCH harder to find. They don't last long if you ever even see them hit the MLS.

Consider buying one of those older homes on a FHA loan with low downpayment or even a 203k to help with repairs if its a fixer upper. Or look for a HUD property - that might give you a better shot at getting a post 1994 house. Often there are fewer buyers during Nov-Jan, so if you're willing to look hard through the holiday periods when others are waiting for after the new year, you can do a little better on price.

If its just the two of you (or even if you have a baby and can manage not to accumulate too much "stuff"), fix it up, live in it for a year (rent out a room if you can - just screen well) and try to save up enough for another downpayment so you can buy another property the next year and keep the prior one as a rental - or if you like your place, just buy the next one as a rental.

The suburbs outside the Beltway or sometimes just inside the Beltway are your best bets for these.  Use HAR.com to find the types of neighborhoods you might consider in the different areas.