Exit strategy for SFH Houston TX

[PJ Singh]

Hello BP'ers,

I am newer REI in H-town, and I would like to get opinion from fellow REI on exit strategy for SFH in Clear lake, TX.

Goal: My current goal is to take action and learn every aspect of SFH REI ( acquisition, rehabbing and exit process) and potentially make some profit from my first deal. My long time goal is to have enough passive income through rentals ( SFH and then eventually to MFH), so that I can replace my current W-2 income.

Background: For past 6 months, I have been learning ( books, podcast , local seminars etc.) and recently started to search for deals. Made couple of offers, but always beaten-out by time or overbid price. I guess that was part of learning curve. Last week, I finally got my first SFH under contract. It may not be a home run deal and but good enough to get my feet wet.

Project: SFH: Its a 1410 ft2 , single story ,3 bed 2 bath, 1983 built in clear lake TX area zip 77062.

Purchase price : $80K

Major Rehab: $ 40k - $50 k (depending exit strategy)

ARV: 170K-175K

Rent : $1600/month

• Neighborhood: ZIP 77062
• Median rent: $1800
• great school district ( 7/10),
• median home value $175k , average home value $219k.
• owner occupied 69% renter occupied 27%.
• median income $ 88k, average $ 117k.
• population growth 0.9%/YR
• crime: safer neighborhood (per trulia)

Exit strategy:

• BRRR strategy: potentially 5k-7k profit after refinance, cash flow $100/month (including PITI, capex, maintenance budget and property management).
• Owner/Seller finance :potential 17k profit and cash flow $400-$500/month.
• FLIP: potential 20k- 25k profit .

Please advice. thanks