(New to BP) Investor from Los Angeles (SFV) looking in HOUSTON- What Areas?

[John Thi]

My Name is John and my first investment was in 2009. My portfolio currently includes on home in Reseda (San Fernando Valley) and one home in Houston (off 290, 77092). I own both homes with a partner and we are 50% partner. I am a conservative real estate investor.

Little info about me : I work full time as an analyst in downtown Los Angeles. I have my bachelors in marketing and MBA in finance. I love real estate and have been listening to podcast and reading books for awhile now. I have been listening to Brandon and Josh sultry voice for quite some time now and decided to join BP. I do not make a lot of money, way under 6 figures and living in Los Angeles takes a toll on you. I invest in Real Estate to one day have financial freedom as Ramsey would say.

I am looking in the Houston area for my next investment. I love cash flow and I hold my properties forever and ever. What areas is a good place to invest in Houston? I have 30K liquid, I would want that to be down payment, closing and rehab (5k). I can probably muster another 5K if needed. I am looking to spend in the 90 to 140K homes and want at least 1% rule. However, my Los Angeles home does not follow that rule and it giving me wonderful cash flow. I am looking for good school districts and does not have to the best but good. Appreciation would be nice, but cash flow is king. I have looked into old sugar land (Townwest area and etc) 77478 zip code, parts of Houston ( 77083) Fort bend School district and Katy near Cinco Ranch ( 77450) but not Cinco Ranch since it is too expensive. I heard North Katy is getting rough. What area would you suggest? Should I focus more on Northside or Southside? Exxon Mobile and all the companies expansion have made Spring and Woodlands house price rocket.

Pasadena, Pearland, Missouri City, Katy, Bellaire, Alief, Stafford, Cypress? Please be descriptive and not just say Cypress but what neighborhoods in Cypress.

I currently have a Property Management (PM) handling my home in Houston and he charges me 7%, other companies charge me 10%. If I go to north I would probably have to find a new PM since he is based in Sugarland. I would have to take that into consideration.

I do not know if I should post this question here or in General buy and sell but I would first try it here. Sorry for the long post, but I am not shy on numbers and information if you have questions I can provide more accurate #s.

Thank you,

John

[Leigh Ann Smith]

Hi @John Thi , We are newbies who don't have any deals under our belt yet, but we've lived in Houston most of our lives, so I can share the little bit I know.

Friendswood school district is coveted.  Most of the homes in Friendswood are high-end, but there are some neighborhoods with older, smaller homes.  The zip there is 77546, but not all of the homes in that school district will go to Friendswood schools.  

Spring Branch supposedly has some really good schools (not sure if they are all good).  That's the area that's mostly north of I-10 between 610W and Beltway 8 (Sam Houston Parkway).  It's also closer in to town, so that's a plus for downtown workers.  

There are lots of refineries and chemical plants on the east/southeast side of town (I-10E & Hwy 225), so there is a decent base of people there who are working and have a reasonable paycheck.  Those are older areas, and you might be able to find something that would be a good rental property with a bit of rehab.

You can find some decent deals on the south side of Houston (that's where we live and where we're looking for our first deal), but foundation work is very often part of the package.  That's our next thing to research....just how much does foundation work cost, anyway? 

Speaking of the south side of Houston, keep in mind that all coastal counties (even if the home is in the northernmost part of the county) require windstorm insurance, and it's very pricey.  We just payed $1,800 for ours for the year.  There is even a part of Harris County that is in the windstorm area.  Check the Texas windstorm maps to be sure.  Flood insurance is often necessary in the Houston area, even in the non-coastal counties, and it's going up 25% per year right now. Keep us posted on where you decide to focus!