All Forum Posts by: Adriel Hsu

@Ted Sornson Just post the purchase price and post GOOD pictures. I mean DSLR camera quality and it should be about 50 pictures per house (all angles of all rooms and closeups on issues). Most savvy investors will be able to run their own ARVs based on the level of rehab they do. ARV can swing $50-$100k with a clean move-in ready bland house vs HGTV pretty.

Also leave out rehab costs, everyone has their own rehab costs.  I have a crew of subs that will get things done cheaper than a beginner flipper and wholesale stores for materials like granite and cabinets.  A lot of investors complain about repairs but they really need to find direct subs to eliminate the upcharge of GC's

I've bought from wholesalers and made money. Few and Far between, but it's doable.

Welcome!  I'm in Houston/Beaumont markets but I am just about to do a marketing campaign in Montgomery County. Seems like a growing area!

@Justin Mann if you have a demanding full time job, an out of state single family rental might nit be your best option.

Even with property management, it’s not anywhere close to passive or hands off.

Investing as a limited partner in a reputable syndication might be a better option. Truly passive and good returns. Most target 8-10% cash on cash and 14-18% IRR, but i've seen many exceed those as high as 70% IRR in 2-3 years.

Trusting a seasoned professional who does it for a living is sometimes easier than trying to do it yourself, out of state, with no experience.

If you are a high income earner, you can have a spouse claim QRP status and offset your income with the depreciation which is quite a large chunk in year 1 due to cost segregation + bonus depreciation.

Just a thought

@Wale Lawal Can you expand on what nurses' want in a STR? My girlfriend is about to launch a single family home on AirBnb right by the Med Center and any insight would be appreciated.

What size are you talking about when you say apartments? 

Loopnet is a place to start, but very few actual deals on there.

@Jack McWatters From what I've seen, the easiest to convert to apartments are extended stay hotels/motels that already have a small kitchen + a bedroom that's actually walled off and separated. 

Think Hyatt House, Residence Inn, TownePlace Suites etc.

If you keep it as a hotel/motel, just realize it is valued differently than apartments. Know your metrics like ADR and RevPar. Also, "ARV" is more of a multiple of revenue, not a CAP Rate.

@Kwame Koom-Dadzie No i did not, had another deal come up where i redirected my funds to.  I will still be building tiny homes somewhere in Houston though, just waiting on the right lot and when construction prices go back down

@Wale Lawal You're welcome! Another point to elaborate on interest rates. Many people are buying because of "FOMO" and not wanting to miss out on potentially the lowest interest rates they will ever see in their lifetimes.  This is pushing more people that were on the fence to buy now, increasing demand more than the high it was on before.

@Wale Lawal

In my opinion, the majority of the country is hot not just Houston.

In response to your question, "When can we expect the market to favor the buyers?", there are only 3 main criteria to trigger a buyer's market.

1) Excess supply of housing - Once Covid hit, construction grinded to a halt, this resulted in a short supply of homes coming online.  Activity is back up now, but with the astronomical rise in material costs (lumber, appliances, A/C unit shortage) I don't see an uptick in supply without an uptick in prices.

2) Increased interest rates - Rates are at record lows and the government already announced it would stay this way at least for the next 3 years and choose to average out inflation in the future to balance it. Therefore this is not happening.

3) Low Demand - This is clearly not happening as demand for SFR are spiking, especially in the suburbs of Houston as people are trying to avoid COVID and urban density. This will probably not happen in the forseeable future in Houston.

In short, I don't see anything that can trigger a cool down into a buyer's market for single family housing.