San Antonio: B Class neighborhoods for buy and hold investing?

Question

Hey there, BP community! First time poster just getting started in real estate.

I'm looking to buy and hold a SFH in San Antonio next year. My plan is to buy a property that I can move my parents into (safe, likely B class neighborhood, 3BR) for retirement that's also in a strong renter's area in the event they eventually vacate it. It needs to be cashflow positive, but I'm more interested in making sure they are in a comfortable home than getting the most ROI, so modest cashflow is ok.

Their rent budget is a flexible $1,200 so having a purchase as close to the 1% rule as I can get is ideal, though due to not needing a property manager, I can spend a little bit more - between $120-$140k. Willing to put in a little work on a cheaper property if the neighborhood is right.

Looking in some areas - in the NE especially - this seems feasible. Any recommended areas that might meet this criteria? Any areas in this price range to avoid? Recommendations for real estates with experience with investors also welcome.

Would appreciate any advice y'all have. Thanks!

Alissa

Andrew K. · Answer

@Alissa Evans, welcome to BP!

I think the idea of purchasing a home for your parents, and as an investment, is an excellent idea.  In fact, I'm on the same track! I'm looking for something for my mom--similarly she doesn't want/need much and a clean, safe place is more than enough for her.

Back to your question, consider the difference in property taxes for homes inside Bexar county and out.  A key factor towards cash-flow and affordability.  A number of my co-workers live in the Shertz, Cibolo, and Selma for that reason--which you honed in on.

Lots of growth and revitalization in that area as well.  Not that you're focused on appreciation, but I'm sure you'll see some over your hold period.

Also, the neighborhood between Toepperwein Rd and Live Oak's Main City Park seems to be a good spot to look.  Decent homes with inventory old enough that they'll need some updating. The City Park is very nice and the area has good access to shopping, hospitals, the AFB, and the new Ikea.

Best of luck and please keep us posted on your search!

-Andrew

Alissa Evans · Answer

Hey @Chris Koch, thanks for your post and awesome job on having properties in that area!

I agree with your assessment of the "desirable" areas in SA. Based on my research, it's been tough to find any viable investments in that part of town.

I will say, though I'd love to provide my parents with a nice property, their standards are fairly modest (they've lived in apartments all their lives, so the idea of a house, and one that they aren't embarrassed by, is very exciting to them). Hopefully there are still some parts that are affordable to start out.

Alissa Evans · Answer

Hey @Allan Bishop Jr., thanks for the warm welcome and congrats on the MFP plan. I love the parts of Texas I've been to and can see why you'd want to move back.

If you don't mind, would you be able to share some of the areas (more specifically) that you're finding are decent and meet your criteria? I know MFP are a different ballgame, but the neighborhoods are likely at the level my parents would be comfortable in.

Appreciate your offer to share your contacts, and I'll gladly do the same! Look forward to keeping in touch.

Alissa Evans · Answer

Hi @Will Pritchett, thanks for responding so quickly and thoughtfully. In respective order:

- I'm not very familiar with San Antonio's neighborhoods but I'll be making multiple trips over the next year to become so. From what I've been able to find, the NE area going up the 35 between Longhorn and Selma (close to the AFB) seems to have some potential pockets that meet my criteria. I know there are many areas in the North and North east that are very liveable as well, but likely out of budget for me at this time.

- They have no ongoing medical issues currently so let's say proximity to the Med Center is not critical.

- They are homebodies with more interest in gardening than going out - a "cute" coffee shop and a local bookstore is plenty. Proximity matters most for basic needs, i.e. a grocery store.

- I'm flexible on renovations and could easily plan for a few months of reno before move-in, but my all-in max is around $140k.

- For additional context, they've lived most of their lives just above the poverty line. They've been in a small apartment complex for the last 15 years, and their major concern for area is "a place they feel safe, and a place they aren't embarrassed by".

I'm not local to SA, unfortunately. I'm based in the Bay Area of CA, as are my parents. The area is becoming far too costly for them to live, so rather than moving them to a more affordable but remote area of CA, I was hoping to combine their relocation with purchasing and occupying my first rental. Tough balance to strike, I'm sure.

Really appreciate you taking the time to provide your input.

Chris Koch · Answer

@Alissa Evans... my personal experience is that it is getting harder to find good 1% deals in "desirable" neighborhoods in SA. I own several properties close to the Medical Center (because my focus is on being in an area that has strong rental demand), but prices have gone up so much in the past 5 years that it is tough in that particular area to find 1% deals. That said, I am sure there are other areas that will fit your criteria... good luck

Allan Bishop Jr. · Answer

Welcome to BP @Alissa Evans! You’ll find a bunch of resources here to help you on your REI journey.

I’m also looking in the NE of San Antonio but for a MFP that I would owner occupy. I anticipate moving back to Texas maybe this summer but hopefully next at the latest. The properties I’m finding seem to be good and in nice areas. So I think you’re looking in a good part of town.

As I start to make contacts in the area I’d be glad to share that information with you.

Will Pritchett · Answer

Hello Alissa and welcome to BP!  You have come to the right place.  I'd like a little more information to help you.  Do you have a preferred area of town?  Do they need easy access to the Medical Center?  Do they have interests that might influence where they live?  Is proximity to you important?  Not sure if you are local.  I think this is still doable.  Do you want to do some renovations or do you want a more move-in ready property?

Thanks,

Will