Purchasing Multi-Family property in Houston.

[Michael Johnson]

Greetings from the desert in Dubai everyone, my wife and I are looking to purchase a multi-family apartment building in Houston area, can anyone recommend a good realtor and Property Manager to assist us? We are looking for a property in the $500000 to $1000000 range. We would also welcome any comments about the Houston and Texas market in general. Based on our research, this seems like a good area to start our search. 

[Joel Owens]

Hi Michael,

The debt you can get will dictate the deal.

A 500,000 to 1,000,000 property will likely be local banks as for commercial that is like buying a 40,000 house in residential.

It's so small that larger lenders will not touch it. You being overseas makes it very tough to get financing here on those types of properties.

How much money do you have to put down?? Those types of smaller properties present issues for out of the country owners because you do not have enough scale to be hands off.

What are your cap rate and COC expectations??

There are non-bank options depending on your PFS statement with liquidity and net worth. Without seeing that I couldn't tell you what is possible. You need to look at currency exchange with also any international tax treaty laws and "hold backs" on the income for foreigners investing here.

If you have 750,000 cash or more you can get non-bank lenders even with a foreign status. They look heavily at country of current origin for terrorist activity, money laundering etc. that certain places are known for.

I have went through this with my foreign investor clients many times. The Texas market is great in many area. Houston is a great market but not all areas are great with some better than others.

Most of my clients are buying in the warmer climate states. ( example: Georgia, Florida, Texas, NC,SC,TN, etc.).

Most of the retiring older generation  in the tens of millions are migrating toward these warmer climate areas. This is fueling job growth and positive economies for the areas which is great for investment.

Hope it helps.