All Forum Posts by: Aaron Francl

@Scott Pringle Good for you on getting that saved. I'd suggest anything you can do to increase the velocity of that cash vs just putting said amount into a property with just your purchase and hoping to cashflow is best. 

You didn't mention, but, if you can purchase with an owner occupied loan, that will really be ideal to leverage less cash for your down payment. 3.5-5% down makes all the difference for you. From there, take your extra capital and look for ways to maximize: via a cosmetic rehab/refi, adding doors (for a property zoned for it), or converting a standalone building on a property into an ADU (aka casita here in San Antonio).

You'll find deals in the details others miss or cannot capitalize on! So get good people around you that you can trust and help you. 

P.S. - A good lender is often an overlooked piece of the puzzle, find one that knows investments and gives you some attractive options. For example, I work with one that offers clients a discounted refi if executed within 3 years of purchase. Something like that on a value add deal can really be a gamechanger for you. 

Best of luck!

Hi @Sean York I can't speak much to Houston but since you mentioned SA...

I see most of the small multi new builds/developments outside of SA's city center. There are a number of new development duplexes being built as you get around the 1604 loop. I have some clients looking into them but most of them are sitting now and have been for some time. The price points have gotten to the level that it just doesn't make a lot of sense for investors or even house hackers. Good looking assets, nice builds, etc. but they're just sitting. 

I also had clients purchase a new construction duplex in the Converse area but that was a few years ago before they started creeping into the $500k+ range. 

It's a good strategy provided you can best the competition, bc there's a major need for quality small multi inventory here. 

I'd echo @Aniq Bajwa in regards to the question. Like most things in real estate, the best answer is really more or less "it depends."

Understanding the differences between various pockets is key to a more detailed and nuanced answer for you. "San Antonio" can mean Alamo Heights as well as Prospect Hill. So, even though it's all technically San Antonio, it's really not always apples to apples to look at long term appreciation potential for the city as a whole.

Good rule of thumb - if you want appreciation, aim for areas in demand that have a finite amount of land available and you should do well. 

@Louie Mikros Good for you! That's how I got my start in investing as well. Myself, and my team, work with new investors and future house hackers like yourself all the time. Feel free to reach out as you begin your journey. We'd love to work with you!

And yes, you are correct. Most opportunities to occupy SMF currently are going to need to be purchased with a gameplan in place to add value or make needed repairs. You're off to a great start. 

Aaron

@Jose Wu

You'd be a bit early down there, but with an eye towards playing the long game, not a bad start. 

I think that's where a lot of investors are having difficulty nowadays, and I fully understand it, and that is day one to year one is not very palatable right now on most properties. How to create cashflow, add value, add doors, find opportunities in zoning = how to play the long game now in buy and hold purchasing and needs to be the mindset in this market. Those that are doing a basic breakdown for year one cashflow expectations are bound to be disappointed and/or end up purchasing in non-ideal areas with little to no appreciation over time.

As far as the city goes: generally you'll see new builds all along the out rims of the city but more of your concentrations of small multi's will be in the inner pockets. These small multi's will almost uniformly be older structures in need of some cosmetic or likely capex work. Too many sellers are putting bad assets out there and asking market price but that's the reality right now without ample inventory and the level of competition existing for these buildings. 

The city is great about keeping the aesthetic of its older/historic neighborhoods, versus other mega metroplex cities in TX. However, it does make for some difficulty with investing at times because you're not working with newer properties.

Good luck!

@Tina Lee Yes, as said, it will depend on your location and local laws/ordinances. It will also depend on the lease verbiage itself. 

I'd see if there was a way to get a promulgated (legal) document that is more advantageous for you as the landlord. Make sure that is spells out exactly when you expect rent to be paid and what sort of consequences exist if those timelines aren't met. 

You have time to make some changes and possibly draft a new version of a lease before August. If she agrees and signs the document, great. If she doesn't then the decision is made for you. 

I'm with you though, late payment can be tricky and a nuisance but you can protect yourself and set up proper expectations with your documentation.

Good luck! 

@Rachael Lyn Let us know your goals for this one. Turnkey vs. a fixer are going to also largely depend on you and your personal preferences and experience! 

Whichever you gravitate towards, you'll definitely want to ensure you have a lender and agent team that's executed some VA + investor buys.

@Michael Estacion I'd have the same advice as @Eliott Elias - ideally you put that money into your own backyard first then expand your scope outwardly. 

Would need to understand your goals and objectives as well, since I assume there's a reason you wouldn't look locally?

 As far as out of market, out of state, etc. I speak with a lot of out of state investors and some common things I think that would be helpful for prospective long distance investors to consider: 

1) It's really, really, really difficult to analyze multiple markets, especially for newer folks. Weeding through big picture trends & projections is one thing but being able to filter through that all, then, understanding the submarkets enough to recognize and execute a deal is a whole other issue entirely. 

2) Let's say you do manage to zero in on one and land on a few submarkets to focus on. Ultimately, you end up picking the real estate team (and his/her/their resources) as much as the city itself, bc your success ultimately depends on their ability to be your eyes and ears managing your asset. You don't want to be in the position of doing all that research but not finding competent and reliable people to guide your investment!

**I bring up this last point bc I hear a lot of folks having this discussion and asking about market A, B, C, etc; not so much of an emphasis on the people you'll ultimately select to help you deploy this strategy successfully. Long distance investing can be great, in theory, it's just highly preferable to go local if you can!

Good luck with your search, and if you are open to entertaining San Antonio as an option, feel free to reach out!

Great advice by @Lucia Rushton 

San Antonio will allow for that STR permit (for now) as long as it falls under the % of permits for that blockface. Highly recommend checking out the city's one stop map to access key information about locations you're looking into: https://gis.sanantonio.gov/DSD...

Best of luck @Austin Gross 

@Nathan Mabery I always recommend really digging into the market and sub-markets to make these sorts of analyses. Real estate is so hyper local and going off things happening nationally just aren't going to give you the clearest picture of what's happening in your chosen market. 

For example: We're entering peak rental time and I have a 4-unit building with a vacancy coming up. Now, national averages may be down, but when I'm running numbers for my area, I'm seeing another increase over last year's averages. So, I'll be able to comfortably add another $50/month or $600/year in cashflow via that unit's market price.

As for your question, it's just going to depend on location - primarily. Other than that, it could be some upgraded finish outs or features or possibly a mix of various lease lengths with furnishings, etc.