My lender said San Antonio Taxes and Insurance are too high

[Paul Martynov]

Hi everyone!

My lender is about to prequalify me for $200-300k, and I target Texas, being living and working in California, LA, so an out-of-state investment. I have a suitable lender that can qualify me in any city or state. It seems that rent/value is favorable and easily meets the 1% rule. He also said insurance and taxes can be too high eating DSCR loan with current rate and I will make less money than Ohio and Kentucky state (example). This statement made me question my focus market. What have been your experiences so far, and any hidden costs that you did not expect managing investment properties?

1. Does SFH or Duplex value add strategy still work, and how is the inventory? My agent said it's a buyers' market. Is that true?

2. Are there any B and C class safe neighborhoods to recommend?

3. Any interesting facts about San Antonio? What are the pros and Cons of this market?

I think you can find a good deal and win in every market. But does San Antonio have real long-term growth potential? 

[Michael Smythe]

@Paul Martynov how many investment properties does your lender own in TX versus Ohio and Kentucky?

Seems like another case of someone with little experience, trying to sell their OPINION as FACT!

Yes, this lender might see all kinds of deals PROJECTED on paper, but what about business returns showing the actual results?

Also seems like this lender is trying to swap the DSCR loan rate issue to the property tax & insurance issue to make their product look better.

BTW: we're in the Midwest and believe it offers better opportunities than TX market, but one shouldn't have to stoop to this lender's tactics to show this:)