How investors can create a win-win to rebuild Houston

Question

Many are discussing how to capture opportunity in Houston. Many fortunes will be made and lost in the aftermath of Harvey. My career has placed me in positions to help create win-win scenarios for families and business. I am from New Braunfels, TX (3 hrs west of Houston). I am passionate about my home state, the people, and real estate as a tool for good.

My question is this for discussion: How best can the investor community deploy profit seeking capital and effort into the devastated Houston market area to create the most profit for the investor(s) and the most benefit/good for the individuals and community being helped by the solutions that only investors can bring to bear?

Bart H. · Answer

I am based in Dallas, and would be interested in participating in efforts in Houston.

Kevin Wood · Answer

Account Closed we own four small apartment complexes in Houston. If you are interested in this space we could show you our properties.

Kevin Wood · Answer

Hi @Clifton Kaderli we are creating our win/win through our contracting business. Both investors and homeowners with damage are looking for reasonably priced contracting work and we're here to help. Investors can help by buying property abandoned or under utilized and funding revitalization. Partnering with contractors that know what they are doing and local to the community will help re-vitalize the city.

Joe Splitrock · Answer

All these mortgages will qualify for six months to a year or more of no payments, due to disaster programs. Foreclosures will not happen for a long time. My guess is that short sales are a more likely the way to buy.

Account Closed · Answer

It seems that people working office gigs downtown are expected to get back to business as usual as early as Monday. All the plants along the coast (Pasadena, Texas City, Baytown, La Porte) have steady work, and people with industrial jobs get back on the job ASAP because it's a no-work no-pay model. People are definitely back at work in the plants even if their families are in shelters or out of town. Investors looking to aid the blue-collar industrial region should look along the main industrial thoroughfares: Hwy 146, Interstate 10, and Hwy 225.

Dickinson is in a hole at about sea-level and it gets destroyed every 
time there is a situation like this where a big storm carries a 
high-tide in with it. Lots of blue-collar industrial workers live there 
because the lots are pretty, the land is cheap, and it has easy access to 146. Definitely a big need for housing recovery help there.

Friendswood is a really nice suburb with lots of amenities and it got flooded pretty bad. It has a great school district. Taxes there are higher than surrounding areas.

I'll know more when I get home next week.

I'm not as familiar with  the west side. Would someone else like to chime in?

Mitch Coluzzi · Answer

The biggest hurdles to any real estate based solution in this time of crisis down there is 1) going to be finding the labor force to handle remodeling and 2) building / maintaining relationships.

I am certain you will be able to find opportunity to buy several "short-sale" like properties but... with any type of storm-based disaster there will be so much work available, local contractors will get choosy and expensive, especially to outsiders.  Bringing in out-of-area labor will be imperative to control costs/schedules.

As to building / maintaining relationships:  have to make sure marketing comes across as a win-win to homeowners, city staff, and local contractors alike.  A few wrong words can easily be construed as predatory given the circumstance AND these folks have been through a lot.  You can guarantee there will be legal hawks watching; dot your i's and cross your t's in marketing / negotiation.

You may want to find yourself a legal partner whom can assist the existing homeowners in negotiating insurance settlements effectively.

SIDENOTE:  Some of my best purchases have been post-disaster (house fires).  In two cases, we were able to acquire the property after the insurance company had paid off the mortgage (mortgages encumbered the insurance proceeds) and the homeowner blew through the remaining lump-sum settlements.  The negotiation was easily converted to a win-win solution when the home-owner was informed of the "nuisance" status and demolition order hearing the city scheduled...

I would be interested networking for a solution on this, please keep me in the loop.

Account Closed · Answer

@Kevin Wood Sorry it took me so long to respond. I just saw this. I would be delighted to have a look at them. I'm sending you a Colleague Request.

Account Closed · Answer

Hi. I am a native Houstonian with a strong interest in investing in small apartment complexes. So far I have been focusing on self-education and have yet to do my first deal. I really want to seize this opportunity to simultaneously aid recovery in my community and launch myself into active real estate investing. I would welcome an opportunity to begin working with someone knowledgeable about apartment investing in my own back yard. If a team is put together to aid Houston through this apartment recovery-and-readiness avenue I would love to get on board. I know the Houston area intimately; I am highly motivated; I learn quickly; and as a former military member, I take instruction well. I have also seen plenty of flood-damage first-hand. I would love to gain experience putting together financing, learning systems, and organizing teams to properly repair the damage up to code in order to get quality rental units market-ready ASAP because there is a real need. My primary area of interest is C+ or better small multifamily rentals inside the 610 loop.

Clifton Kaderli · Answer

From staying in touch with friends and family in Texas as well as network on BP, here are some updates to thoughts?

1. No mass migration. The job centers are still in Houston and most will rebuild.

2. There is still much sorting and regrouping. People are still being helped with basics and are returning and sorting. Programs and insurance are starting to make progress beyond clean up. Rebuild will be a long-term project.

Thanks to all who have been in touch.

How investors can create a win-win to rebuild Houston

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