San Antonio Duplex house hacking deal

San Antonio Duplex house hacking deal

San Antonio, TX · Member since 2016 · 20 posts · 5 votes

Hello BP World :)

I am moving to San Antonio soon and weighing my options for investing there.  I will be selling my flip-in here in Chicagoland in the spring and plan to make a healthy profit.  It should be enough to purchase a home for myself and hopefully another property to rent.  However, some of the duplexes down there seem too good to pass up.  I could purchase one to live in one side to house hack and another purely for rental purposes.  But I am new to this so I want to make sure I am not am not missing anything.  Numbers on a few are close to this:

Each side is a 3/2 and about 1250 sqft which based on my research should rent for about $1,100 per month.  Does that seem accurate?  These properties are on the north and west side of town with 1 or 2 car garages and at least average to good schools.  

Purchase price - $165,000

Rent - $2,200 (if I rent both sides)

If I live in one side then I can get a less than 4% APR conventional so the principal and interest payment would be about $627 per month

taxes - $327

insurance - $120

all utilities metered separate

Vacancy - $176 (is 8% a good average for the area?)

Repairs - $168 

CapEx - $182

Property Management - $220

Who and how do you pay for garbage pick up in Texas?

Making total expenses including mortgage - $1,841 so roughly $360 a month in profit if both sides are rented and if I am living in one side, the other will cover all my PITI and I can property manage it myself.

I have about $7,500 put in the budget to do some minor updating (most seem to need some landscaping updates, minor bath updates, etc.). All simple things I could do the majority of the labor on myself. Considering 20% down and $5k in closing costs it would be a roughly 9% cash on cash return. If I do FHA I only get about $150 a month in profit but up the cash on cash to 12%. However, I kind of prefer the cash flow and lower payment with no PMI.

A few other questions about rentals down in SA: 

Do people renting duplexes expect refrigerators, washer and dryers?  How about lawn care?  A 2 car garage?  Ceiling fans? Pet rent?  How is the rental market?  Looking online it seems like there are lots of rental properties available all the time.  What kind of properties rent the fastest and for the most on the west and north side (3/2 SFRs, 2/2 multi, 1/1 large multi, etc.)?  

I know this was a lot but I have read some of the other post and it seems most posters don't give enough info.  I appreciate any feedback.  Thank in advance!

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Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
9y

Dannielle, Welcome to Texas!   Shhhh, Shhh, Shhh@@!!!!!!  Don't speak too loudly and don't let the Northerns know about what you are about to discover!!!! But yes duplex investing in San Antonio, Austin, Dallas or just about anywhere in TEXAS is a no brainer!  But please KEEP IT on the Down low!!

Most duplexes are as you found them, and they usually are separate meters for utilities.  So the tenant gets there own electric, water, gas, trash and sewer!  Unless I am marketing to students (college) I make the tenant responsible for the yard.  I supply refrigerator, stove, microwave, and dishwasher.  I usually don't supply washer dryer, however if I do I charge extra. But please don't tell anyone about this crazy deal down here in Texas....Shhh Shhh Shhh.  

Yeah, the weather is golf weather today and most days, however in the summer it gets hot, so I supply ceiling fans in all my bedrooms and living rooms.  They can be bought for about $70 each with lights and they last forever.  Dresses up the room nicely!  Right now you are projecting too much for vacancy.  For planning that is fine but real time now, Rents are on the RISE.  Tenants don't want to move, as most landlords are slow to raise rents to keep pace.  ALL MY RENTALS need to be raised but I my conscience tells me $25-50 raise when market is telling me $75-100.  It is hard to keep up, therefore your tenants realize too and they don't want to move.  You put a sign in the yard and you have to take it down in 3 days because you get too many inquiries!  It is a crazy time in TEXAS.  

Northside of San Antonio, New Braunsfels , San Marcos and Austin are all great locations.  Austin is getting pricey but north of Austin, like Round Rock or Georgetown is still affordable.  If you find a duplex with a garage they are usually one car each side.  3/2 or 2/2 are the best but 2/1 still rent well also.  Good Luck, but please Keep IT on the Down Low....dammit!

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  • Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
    9y

    Dannielle, Welcome to Texas!   Shhhh, Shhh, Shhh@@!!!!!!  Don't speak too loudly and don't let the Northerns know about what you are about to discover!!!! But yes duplex investing in San Antonio, Austin, Dallas or just about anywhere in TEXAS is a no brainer!  But please KEEP IT on the Down low!!

    Most duplexes are as you found them, and they usually are separate meters for utilities.  So the tenant gets there own electric, water, gas, trash and sewer!  Unless I am marketing to students (college) I make the tenant responsible for the yard.  I supply refrigerator, stove, microwave, and dishwasher.  I usually don't supply washer dryer, however if I do I charge extra. But please don't tell anyone about this crazy deal down here in Texas....Shhh Shhh Shhh.  

    Yeah, the weather is golf weather today and most days, however in the summer it gets hot, so I supply ceiling fans in all my bedrooms and living rooms.  They can be bought for about $70 each with lights and they last forever.  Dresses up the room nicely!  Right now you are projecting too much for vacancy.  For planning that is fine but real time now, Rents are on the RISE.  Tenants don't want to move, as most landlords are slow to raise rents to keep pace.  ALL MY RENTALS need to be raised but I my conscience tells me $25-50 raise when market is telling me $75-100.  It is hard to keep up, therefore your tenants realize too and they don't want to move.  You put a sign in the yard and you have to take it down in 3 days because you get too many inquiries!  It is a crazy time in TEXAS.  

    Northside of San Antonio, New Braunsfels , San Marcos and Austin are all great locations.  Austin is getting pricey but north of Austin, like Round Rock or Georgetown is still affordable.  If you find a duplex with a garage they are usually one car each side.  3/2 or 2/2 are the best but 2/1 still rent well also.  Good Luck, but please Keep IT on the Down Low....dammit!

  • Rental Property Investor · San Antonio, TX · Member since 2011 · 513 posts · 290 votes
    9y

    @Dannielle Hoffman in San Antonio the trash and recycling are part of the water bill (my tenants pay their own).  I have some rentals in northwest San Antonio but they are sfrs.  For mine, the tenant is responsible for the yard.  I don't supply fridge or washer/dryers.  Usually take out garbage disposals because they end up being a pain to repair/reset.  

         I am curious what areas you are looking in.  San Antonio varies a lot.  I would be happy to give you one person's opinion of the neighborhood if you'd like.  I like to buy in Northside school district as it is a good district.  Within that district, schools still vary quite a bit.  Northeast school district is also very good in general.  Our city has several districts in and around it.  

         Let me know if you'd like any input on neighborhoods.  My other job has given me some pretty good insight into some different areas of town. 

    Good luck,

    Will

  • Investor · Boerne, TX · Member since 2014 · 54 posts · 25 votes
    9y

    @Dannielle Hoffman 

    I would agree with everything @Will Pritchett said and will add one thing regarding small MF in San Antonio. I own 3 duplexes in and around the medical center area (NW side of town) and only one of them has separately metered water. My opinion would actually be that the norm is one meter for water for the whole duplex. And then electricity is separate. Before assuming Water is metered separate or going off of what an MLS listing says, a quick call to SAWS (SA water system) should be able to tell you.

  • Investor · College Station, TX · Member since 2016 · 150 posts · 37 votes
    9y

    @Dannielle Hoffman

    If you shoot me a message, I'd be happy to pull the rent history in the neighborhood(s) you are looking at to make sure that you have the rent numbers right!

  • San Antonio, TX · Member since 2016 · 20 posts · 5 votes
    9y
    Thank you everyone for your thoughtful responses! I am so glad to here that the rentals move quickly, I was a bit nervous for a minute. I am so excited for this next step in my investment career. A few more questions though. How are the tenants? What are good criteria for minimum requirements to rent (credit score, job history, # of references, etc.)? Do families usually rent a 3/2 and roommates in a 2/2? In Chicago we have basements but there I wonder if couples or roommates would rent a 3/2 to have more space (storage, gym, office, etc.) to make up for that. I think the areas I was looking at were near the medical center and far west side (kind by the military base). I also saw some on the north east side I think in university city but someone said the east side was not a great area. Thoughts on that?
  • Brad LarsenPro Member
    Property Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes
    9y

    @Dannielle Hoffman  You guys win the World Series and immediately move South! I do not blame you. Regarding your rental questions on the SATX market, there is a lot to go over.  

    To answer all of your questions, it would be a 10 paragraph reply - but I may be able to boil it down in a couple of key phrases.  

    One - Find a solid investor property real estate agent you like.  Look at the numbers and don't buy properties because they are "cute".  

    Second - Have a Property Management company run the rental numbers for you (not the agent).  The agent may sell you something and run.  The PM company is the one who will be dealing with it....we don't "buy" listings.  "Yes - that duplex will rent for $1,500 (and you never get above $1,100)."

    The SATX market is very healthy and can support a lot of steady long term growth.  

    For further information or if you need rental comps - find our website and we can do Free Market Estimates for you.

    Take care!

  • Rental Property Investor · San Antonio, TX · Member since 2011 · 513 posts · 290 votes
    9y

    Universal city is its own city. Some of the norms regarding trash etc. could be slightly different than is SA. Just check into it. 

         Medical Center is a great area in my opinion.  Lots of hospitals and people employed at various income levels. You will compete with apartment complexes - which are dense in that area. I would think a duplex with a yard would set you apart from the complexes. 

         The West side could mean really rough areas or, further out, good stable working class neighborhoods. Really need more info. The near east side is trendy and gentrifying but a few blocks further is still pretty rough. Really need more specifics as a block can make a huge difference here. 

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