Long Distance Investing: San Antonio, TX

[Account Closed]

Hey all! My fiance and I are looking to purchase an investment property in San Antonio, TX by the end of the year for no more than $100k. We're currently located in Los Angeles, CA, but through some research and feedback from friends, we have decided that the SA market may have better investment opportunities for us at this time.

I was hoping to hear feedback from people who have recently closed deals in SA who could recommend areas of interest where we may find great leads.

Further, we are looking for ways to better entrench ourselves in the SA market. For those who are currently investing in SA, any suggestions for groups or clubs we may join to meet people in the market; or relevant conferences in the market that are recommended for us to attend?

I know this is a lot of asks, but any feedback will be greatly appreciated!

[Heather H.]

Hi @Account Closed, my husband are out of state also. I've had my eye on San Antonio for over a year, and we just closed on our first property there a few weeks ago, which is being rehabbed now. I think it's a great place to invest since it is one of America's fastest growing cities, with high rental demand and fewer weather issues than elsewhere in Texas. My strategy is mainly BRRRR with SFRs, so that's what I'll address here, since I'm not sure of your plan:

Your $100k max is achievable as a purchase price, even from the MLS, but will likely take some work, and the rehab could push you over budget. I assume you're planning to BRRRR or at least buy & hold. In the areas where it is possible to buy and rehab a house for under $100k (e.g. the west side and southwest among others), the neighborhoods aren't as desirable and they haven't been seeing as much appreciation, and the rents are lower, which of course affects your cash flow. That said though, I'm sure there are pockets that would work. For example, the area around Lackland AFB is supposed to be solid with renters, and there seem to be livable houses in the $80-90k range - I haven't invested there, but I have been told it's good (although not trendy, so it isn't one of the "hot" neighborhoods - which could be a good or bad thing in my opinion, depending on how close we are to the top of the market).

One thing I would say is to make sure to run your numbers realistically and conservatively, and be patient. If it takes a year to find the right deal, that's okay - it's annoying but much better than getting stuck with a money drain. If you're buying with cash or can put down a fair amount to lower your LTV, cash flow is definitely achievable with single family. However, I haven't found any SFRs that cash flow comfortably in SA with a down payment of less than 40% or so (not to say they're not there, but none are meeting my criteria anyway). There are more multi-family deals that cash flow well on paper, but most of them at that price point are illegal duplex or triplex conversions, which lenders often won't touch - so if you're financing, watch out for that, and if you're buying with cash, keep in mind that it could severely limit your ability to sell later.

In terms of finding leads, there are wholesalers in the market, and some of them are finding some better deals than you can find on the MLS, but a lot of what they're offering is actually pretty comparable to what's available on the MLS. So I highly recommend Redfin - not only to find deals, but also to get to know the neighborhoods.

That said, all of this is based on my personal experience, which is still pretty limited in SA compared to some other people on this forum.

One thread that I have found especially useful in learning the neighborhoods is the following:
https://www.biggerpockets.com/forums/99/topics/513518-san-antonio-tx-how-to-understand-this-market

Also, if you haven't read @Brandon Turner's "The Book on Rental Property Investing" and @David Greene's "Long-distance Real Estate Investing," I highly recommend both of those - Brandon's is really great in terms of making sure the readers know how to run their numbers realistically, and David's is great for those of us investing out of state. 

Hopefully this has been helpful. Good luck and happy investing!