All Forum Posts by: Aaron Francl

Hey Evan, first, I would highly suggest you self manage for the building types you mention. A handful of doors should be easily managed once you research a strong + repeatable process to screen and place.

BRRRR can be a bit of a more advanced strategy than what you hear/read. Sounds like you're preparing yourself well but I'd highly suggest targeting a lighter rehab and practicing all the steps/mechanisms of the strategy rather than a full on BRRRR-dependent deal. Learn what it will take to manage a building, target a building that needs enough work that you can find ways to push rents up vs heavy/capex rehab all while you build a deep rolodex of reliable partners and skilled contractors. Eventually, once rents can be pushed up over time, there would be potential to refi that asset with your beefed up GRM metrics to fund your next project. If you're confident at that point, then go for a full BRRRR project.

Hi Varouj, it’s a great time to be looking into SA with developments breaking ground and planned all over the urban core. The market here is still more affordable relative to other major Texas cities. That being said, competition for purchasing small multi-units is intense (due to a shortage of inventory and high competition), so plan on packing a lot of patience and grit into your search! 

Deciding on where to look into the sub-markets in the city will all depend on the strategy you all are looking to deploy. Appreciation or cashflow plays for buy and hold vs possible rehabs and value adds all can dictate the area you focus in on. Have you gotten set up with a lender yet? I’d suggest getting at least that ball rolling first to understand what all loan packages you all can qualify for first. Then examine those options so that you’re clear on what the purchase should do for you. From there, find an investor/agent to help you drill into the submarkets once all those goals and qualifiers are crystal clear! 

It’s an exciting time to be here! The city is changing daily with developments  peppered throughout the urban core and all the planned growth on the horizon for south of downtown. Glad I got my properties when I did, but hoping to knock a few more down here this year for myself and my clients! 💪

Hey Grayson! I’m a local agent/investor and specialize in small multifamily purchases. 

I’d be happy to speak with you at some point as you all do your research and learn more about executing this strategy and the city itself. There are a few submarkets/neighborhoods I’d suggest targeting for this in San Antonio.

But generally speaking, I think you’re wise to look here. There are a lot of exciting developments breaking ground and it’s going to be very interesting to see where this city goes in the next decade.

@Anthony Green-Parker

Thank you for your service and welcome! I've worked with military buyers locally here in SA including a young family that utilized a VA loan to purchase a new construction duplex in the Converse area.

BRRRR is a great concept. However, you may find that for a first purchase, not only is it a bit of an advanced practice but with the current costs of materials it can be a much more costly strategy than it was even last year.

My advice would be to leverage that VA loan to get into a multi-unit property that may need a little work but nothing major. Then eye rehab-heavy assets for a second/future purchase.

Best of luck in your search!

@Anna Marie Holland

From what you're mentioning, my advice would be that you may want to rethink your first purchase/investment being a flip or BRRRR. Those strategies are great in concept. However, not only are they advanced, the cost of materials currently has made those a bit more of a challenge to pull off. Not saying it can't be done, but again, for a first purchase it's not where I'd focus personally. For example, I have a client that wanted to add a new building (casita) unit bc her property is zoned for it. The cost difference between another client doing this exact same strategy just last year vs the subject client's bid was nearly $45k.

My first purchase was a 4-plex + househack as an owner/occupant @ 5% down payment. I purchased in a growing neighborhood and added value over time: extra AC units, ceiling fans, area rugs, gutters, flowerbeds, a secure package delivery system, etc. This would be the sort of purchase that I'd suggest you look into vs. a major rehab/flip, etc. 

Read, listen to podcasts, run rental comps in neighborhoods you're targeting and get a good investor-friendly agent that can help you. Rest assured - analysis paralysis is common! Best advice I can give is to learn to be comfortable not being completely comfortable. Trust in your decision-making prowess bc at the end of the day that's all any of us have. 

Best of luck!

 

@Thomas Lowe

There are a few great points here for you that cover some of the proper thought processes. I can completely understand Charlie’s perspective from the Seller’s side of the equation.

This year, however, given the trajectory of the current local markets here in Texas, my clients place a lot of offers sight unseen. Sometimes it’s out of state buyers, sometimes it’s a timing thing with properties going under contract day of listing, etc. Another thing to consider is that ma y times on MF properties, with tenants in place, seller’s don’t want to coordinate showings before an accepted offer so everyone is offering prior to a walkthrough anyway.

Like you said, if you’ve done your up front work, you know your numbers, you’re ready to offer. Don’t wait, always offer. You should have some semblance of option or a due diligence period (hopefully) and if the inspection is a bomb, yes, you’re out that fee but it saved you from buying a headache property. I’ve been a part of several inspections that we didn’t even complete due to state of the building, and in those instances, our inspector didn’t write the report and we terminated - saving our clients the $$ for the inspection.

I always call the seller’s agent up front, try to establish some rapport and uncover anything pertinent prior to offering. We can always draft a letter of intent or send full paperwork with the offer based on that chat.

Again, I think you can never go wrong taking measured/calculated + actionable steps. I see way too many “investors” sit on the sideline, fearful of making a move, only to get lapped time and again by actual investors.

Decide to not be that person & best of luck to you!

Investment Info:

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

Purchase price: $265,000
Cash invested: $40,000

Buy, hold, rehab & refi purchase of historic property + personal residence in Government Hill. Actively renovating room by room, adding value and custom touches as well as extending the master bathroom, adding a second full bathroom and updating the old back porch into a new laundry room.

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

I love working with my hands and always wanted to renovate a house from top to bottom.

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

MLS

How did you finance this deal?

5% down payment as owner/occupant

How did you add value to the deal?

Working to answer this. Adding usable square footage, extending the master bathroom and converting an old porch into a full bathroom & laundry space.

What was the outcome?

TBD! Hopefully I can report back that I was able to pull out a lot of the equity I've put into this once the work I have planned is completed.

Lessons learned? Challenges?

Pack. Plenty. Of. Patience. If you live in flip, rehab, etc. you know the pain of tools, paint cans, scrap wood, etc. constantly all over the place. It can be a drain but nothing is more rewarding than seeing your vision come to fruition little by little.

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

Yes. Me!

@Jeremy Robles I recently went through this exercise to overhaul a cedar post (pier & beam) foundation on my personal residence. I received quotes from a host of the "name" companies in the area. I'd highly suggest educating yourself a bit independently before you start getting quotes. Once you're comfortable with some basics, you'll be able to compare/contrast their bids armed with some solid knowledge. I ultimately ended up going with a contractor referral on my team & I was extremely pleased with the quality and scope of work they took on. If you'd like their contact information, feel free to shoot me a note!

Thank you for the replies! I appreciate the insight.