100k cash-- how would you invest in San Antonio?

Question

Hello BP! If you had 100k cash to use on real estate for the San Antonio market now, how would you invest?

Any specific zipcode/areas that are up and coming but still good for fixer deals, especially on all cash offers under 150k?

I'm new to the San Antonio market and looking to BRRRR, hoping to find foreclosures/off market fixers. If there's anyone experienced with foreclosures in SA, I would love to connect! Also open to partnerships if anyone is looking as well as finding an experienced investor-friendly agent! My background has been mostly passive investing in flips and syndications in Los Angeles, currently looking to move to San Antonio.
Also any DIY-ers? I'm looking to DIY the house hack as much as possible, mostly because I enjoy handiwork and want to learn, would love to connect!

Thank you!

Joseph Cacciapaglia · Answer

BRRRR deals in San Antonio have become very difficult over the last several months. So many people are chasing the same type of deal, and they're bidding a lot of the profit out of the system. A lot of the wholesale deals aren't really "off market" anymore, because they're blasted to the whole world anyway, and they're doing "best and final" rounds just like MLS deals.

I know investors that are basically fine with zero cash flow BRRRRs, as long as they're able to pull out most of their cash. These are the types of people you'll be competing against when bidding on BRRRR deals. This is happening, because there are very few foreclosures, due to the moratorium. Most of the truly distressed properties that are left are in locations that make it difficult to attract and maintain tenants.

Most of my clients are shifting to different strategies. I've seen a lot of investors find success in short term rentals and a few have started to move towards new construction. I'm in the process of building a couple of new homes to use for STRs myself. If I were getting started in San Antonio with $100K to invest, I would explore some of these alternative options. The main thing is get started.

Rick Pozos · Answer

OR you could do what smart people do and do the marketing yourself. Skip the middleman.

You have already figured out what makes a deal, what a decent neighborhood looks like, now just figure out who you have to send some postcards to. How to find these motivated sellers and talk with them. THAT is how you will find a deal every other month or every month!!! Dont make excuses, make money

Darren Hicks · Answer

@Melvin Maxwell @Monica C.

I invest in Corpus Christi as well. I’m primarily a buy, fix, and hold investor but am running into the same issues every one else is. I’ve had to pivot my strategy to new construction. If you have the capital and can put down 25% this works great. I am currently purchasing a new build for the same price as other similar but older homes on the market here. And the cash flow is there. (I don’t pursue anything less than $500 cash flow). I also have a phenomenal agent here if you want their info. PM if you want more details. I’m very open to networking and/or partnering.

Darren

Arissa Pedroza · Answer

I guess it also depends on whether you are looking for owner occupied/non owner occupied and if you want a SFH or a MF.  If you plan on moving to SA, your best bet is to get into a BRRR with a 4 plex for 3% down and live in one of the units.  I had a client get into a 4 plex for $120k and he put $40k into it and it appraised at $280k.  He lived there and did a lot himself but contracted the major items.  He has now moved on to flip 2 houses and with that, he will get into another 4 plex here shortly.

Charles G. Johnson · Answer

How about this solution:  I build affordable houses.  I can build you a new home for $100 per square foot & you buy the lot.  I work through Joseph Cacciapaglia.  Contact him if you want more information.

Melvin Maxwell · Answer

@Monica C.  My partner and I were basically in the exact place as you last year looking to invest in San Antonio.  We were focused on BRRRR strategy attempting to buy SFR for cash--our target price was $150K or less/rehab up to $50K/all in at 75% ARV/$200 per month cashflow/min 15% CoCROI.  Definitely hard to find properties at deep enough discount that we could rehab and cashflow although we are completing our first this month.  We went through wholesalers--it was very competitive. As @Joseph Cacciapaglia mentions, the big wholesalers are blasting their entire buyer network and the showings will often have scores of investors which is pushing prices up and taking margin.  I'd find multiple wholesalers--not just ones from the big companies but individual wholesalers who don't have the same vast marketing network.  San Antonio is so tough right now to make our numbers work we've also looked and bought in adjacent markets like Corpus Christi.  I've got a great agent referral and my partner is a GC in San Antonio--be glad to share their information if you'd like.

Good luck and happy hunting!

Levi T. · Answer

The market nationally is so hot, that the best play is fix and flip. If you BRRR you could get caught in a down market and all that comes with it when buying at the top. I would not buy anything right now unless it had huge discounts. — Whenever the pandemic buyers return to the cities, there is going to be a correction to market pricing, and then a long process of digging ourselves out.

Darren Hicks · Answer

@Dyanna S.

Hi Dyanna,

Yes, my definition of CF is after everything is paid. My intention is to hold the property for 5-10 years. I start all my properties off with six months of expenses in an account. I consider that my OPEX. I also self manage. All of my properties are brand new or have had a complete renovation that I am a part of and is done to my standards. My maintenance expenses are extremely low. I also purchase the properties with 20-25% down to keep my payments low. So I use a lot of my own capital but I’m fine with that. I’d rather have equity in a property than money sitting in a savings account earning something like 0.5% interest. Shoot me a message if you want to dive a little deeper.

Polo Vazquez · Answer

I would buy SFR with little work and paying 20 or 25% down. Find older homes that banks will still finance but ugly enough that most people wouldn't want to buy so you have less competition. You should be able to buy a couple these homes, cash flow them a little bit (prices has gone up so much it's becoming hard to cashflow them), and enjoy the 6% apreciation on the whole price of the property!

Dyanna S. · Answer

@Darren Hicks - can I ask how you're defining CF? Are you looking for deals throwing off $500 post mortgage, interest, and opex? And over what time period? Thanks - running some numbers in SATX myself and trying to slice it different ways!