All Forum Posts by: Alexander Timberlake

@Larry Fried I have been looking at $75k-$150k here in Houston. There are several decent neighborhoods that are close to schools that have a lot of properties in this price range than cash flow about 1%. The problem is Houston property taxes are about 3-4% in these areas and this severely eats into your cash flow margins. I've calculated that 1.2% RPR is the minimum required for the property to give me the yield I am looking for. 

Ideally, I want to be able to use property managers to do everything for me. This goes for in-state or out of state investing. I understand that properties in bad neighborhoods might have higher turn over and higher vacancy. But a 2% property with 50% vacancy is equivalent to a 1% property with 100% vacancy. I have a hard time believing that the vacancy will drop that much. From searching through Memphis, TN, it looks like there are a lot of properties in the 3-4% range... but they are definitely in rough neighborhoods and all will require some level of repair. 

@Jeff B.

 Yes. If you listen to the BP podcast, they will jokingly refer to the midwest and other rural areas as "fly over country."

Hello,

I am not a foreigner, but I think my question is relevant to this thread. I am looking to invest in properties with Rent to Price Ratios >2%, but this is very hard to come by in Houston unless you purchase in very bad neighborhoods.

What areas inside of the USA are people finding metros that have Rent to Price Ratios of >2%? 

I'm definitely interested in partnering on deals with locals in that metro.

Best,

Alex Timberlake

Hello,

I am a buy and hold investor looking for deals and partners in metros with strong cash flow. I am looking to invest in properties with Rent to Price Ratios >2%, but this is very hard to come by in Houston unless you purchase in very bad neighborhoods. 

Are there any REIs out there who:

1. Are looking to partner on deals in good cash flowing metros?

2. Are willing to share the metros they are aware of that are great cash flow areas. (I imagine most of these will be in fly over country).

Best,

Alex Timberlake

@Roshan Koppuzhayil Thank you for the response. It's good to hear there are other people who align with my thought process. I am curious to your thoughts on the areas surrounding South 59 that are close to sugar land. Some areas I have been looking into are Meadows Place, Missouri city, and Mission Bend.

@Josh Carr Thank you for all the very helpful information! Very good stuff.

I recently heard something that brought an idea I was thinking about to the surface. I heard that (in general) it is bad to look for buy & hold properties in neighborhoods that are hot "fix and flip" neighborhoods. This makes a lot of sense to me. I am wondering if people agree with that statement?

Some background:

I've been looking for buy & hold properties in Houston and I have been focusing on the neighborhoods up 290 and down S59 outside of the beltway. These areas have a lot of $100k to $150k houses that have Rent/Price ratios of about 1-1.25% and are decent neighborhoods. However, they are also the "hot" neighborhoods. They are definitely seller's markets. The days on market is usually only a few days and there are a ton of cash sales... this all screams hot market with a lot of flips going on.

In my mind, buying a rental property is like trying to buy a ultra high dividend stock with leverage. The strategy is to buy something that will produce great yield on your investment. (any appreciation is icing on the cake). That being said, a hot, fix and flip market will drive up prices which will increase the investment and therefore decrease the yield you make (assuming rent remains fixed). 

I understand that these "hot" markets also happen to be some of the nicer neighborhoods that have potential of continuing to increase in value over the long run assuming migration to Houston continues. However, this is speculation that could always change. Again, drawing a metaphor to stocks... rents are to dividends as home values are to stock prices. Dividends are considered more stable and constant and less risky. So investing in a "hot" market is like buying a growth stock with the anticipation that the "inflated/competitive" price you are paying in time 0 will still be less than the price at Time N.... this is exacly the opposite strategy I am looking for with rental properties. I think the basic strategy here is to buy something at a good price (hopefully at a discount) that has a stable and strong yield.

Any comments?

Hello,

I plan on attending the Harris and Galveston County Foreclosure Auctions every first Tuesday starting in March. Is there anyone local to Houston/Galveston that participates in these that needs assistance reviewing listings or with some part of their process? I want to get involved, but I need someone to guide me. I am offering to trade my time for knowledge.

Best,

I've been looking here: http://hcad.org/property-search/real-property/real...

...but when I search for properties I don't see anything that looks like:

Tax Liens: $XXX

Mortgage Liens: $XXX

Where can i find this information for Harris or Galveston County Properties?

Hello,

Does anyone have any experience with buying foreclosures online? What sites hold these auctions? Are they held regularly/routinely? Other than being online, how do these differ from the live auctions?

Best,

Alex Timberlake