Lackland Buy and Hold

[John Wigglesworth]

Investment Info:

Single-family residence buy & hold investment in San Antonio.

Purchase price: $100,408
Cash invested: $46,387

Was able to purchase with just $4K using a "Subject To." The home needed foundation and plumbing repair which shot up the repair expense. However, it was rented before I could finish the rehab at $1450 a month. About to refinance and get a large chunk of my out of pocket back.

What made you interested in investing in this type of deal?

The Lackland area properties can meet the 1% rule and have some good appreciation. That's not an easy combination to find in San Antonio.

How did you find this deal and how did you negotiate it?

Word of mouth. Friend of a friend found out I buy real estate and he had a nightmare rental to get rid of. Negotiation was over the phone.

How did you finance this deal?

Bought it with a subject to. Financed the repairs using a HELOC on my residence. Refinancing to get a little over half of my repair cost paid back to the HELOC.

How did you add value to the deal?

I replaced all the flooring with vinyl plank. It's more expensive than carpet, but a better long term ROI. I always change out all the outlets, light switches, hardware, and light fixtures for a clean new look. Everything is switched from old gold to a new brushed nickel, even door hinges. In kitchen, changed hinges, drawer pulls, and hardware, plus $500 for a used complete set of stain made it all look like brand new.

What was the outcome?

It was rented while we were in the middle of rehab. Went fast.

Lessons learned? Challenges?

When you raise a slab foundation, budget to replace half the driveway. Count on replacing a lot of the plumbing when the foundation moves. Lowes has some lower priced vinyl plank flooring that I like, but their install is more expensive than it appears. Moreover, I buy underlayment at Habitat for Humanity for half the cost of Lowes and it is good quality.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used Texas Prestige Property Solutions. The owner is a general contractor but is hands on with everything, not just a project manager overseeing subs. He redid the front porch for a surprising good price, and it's unlike any railing in the neighborhood.

[John Wigglesworth]

Andrew, 

I didn't market the property beyond putting a sign in the yard. I often put properties on places like trulia, zillow, and craigslist.  However, it was my contractor who put out a for rent sign early in the yard (before renovations were compete).  I probably had 7-8 inquiries just with the yard sign.  In two of my rentals, the simple yard sign resulted in a tenant.

I don't use a PM.  I just have 5 rentals so I'll grow and learn a little more before handing over the management.  

I'm in the military myself, and can tell you a large percentage of military don't want to live near base.  Its' great for AirBnB due to the constant graduations.  None of my 4 rentals near Lackland are rented by military.  I think 78227 off Loop 410 is a great area to invest, nevertheless.  

John