New Member from San Angelo, Texas

[Ryan Betzing]

Hello BP,

I've been lurking for a couple of weeks and wanted to introduce myself and share what has been an exciting start into the world of investing. My brother in law has been investing off and on here in San Angelo for over a decade, mostly just a few flips and owner financing out a couple of houses. I told him I've been wanting to start investing and we created an LLC this past June.

In July we purchased our first property - we picked up two houses on the same lot for $10,000 at the county tax sale.  We each kicked in 5k and our adventure was underway. One of the houses on the tax property was a completely gutted one bedroom and the other is an efficiency home which was in need of some TLC but in decent shape.

Shortly after purchasing the tax property we found a 4 bed, 1 bath home which later appraised for $105k and the seller accepted our offer of $40K. My brother in law has a great relationship with a local bank and was able to get a zero down loan for $55k. We’ve spent $10K replacing the roof and carpet on the 4 bedroom home and the other $5k on fixing up the little efficiency home on the tax sale lot.

About a month ago, a coworker of mine foreclosed on a 3/2 home he had owner financed and decided he wanted to be done with the real estate game. After looking at the home, we offered him $50K for it. Once again, we were able to get the same bank to loan us $60K with no money down. We are currently using the extra $10K to replace the roof and flooring and some other cosmetic touch ups. This home just appraised for $105K. 

We also just rented out the little efficiency home for $395 a month. We estimate the other property on the lot will take about $12k to fix up and we can rent it for around $550 a month.

So the question is – what is the best way to maximize on the pieces we have in place? Both of the homes we financed are almost ready to either rent or flip. I think we could get a small cash flow on both homes if we decide to hold and rent them. However, if we can sell each home for ~100K, now we have maybe 80K in capital to work with...tempting as well.

We'd really like to fix up the little one bedroom on the tax property and get it rented out. Our long term goal is to build a large portfolio of SFR, so it feels wrong to flip the first two deals we land, but injecting some capital is tempting as well. Any feedback/thoughts/discussion would be greatly appreciated!