All Forum Posts by: Andrew Schlessinger

@Rick Pozos  Thanks for the update.  

@Cassie Villela  and @manaia alalamua, Where are yours held?

Any of these in person yet?

Good Afternoon, BiggerPockets Family.

I've moved from Baltimore and am looking to get involved in a few small REIA's in San Antonio. Hope to hear from o few local investors!

Thanks,

Andy

All, I've found the information in this thread pretty informative.  I'm an experienced investor in Baltimore, Md and am planning to move back to Texas in 18-24 months.  El Paso is on the list, but nothing final.  

I'd like to connect with other experienced investors and get to know the areas over the next few months.  I don't know the areas, so I'm looking for more specific guidance on locations to avoid.  My biggest concern...war zones.  Almost all of my investments are Class C areas, so a lot of working class, lower-income areas, and S8 experience.  But I don't invest in heavy gang, drug, or violent areas.  Looking for multis, up to quads. Established areas are preferable, and I stick pretty closely to the 50% Rule.  Achieving the 2% Rule would also be nice (1.5% is about as low as I go), but my expectation is low based on what I've seen so far.  I have my own funding, but would be interested in finding new sources.

Thanks!

Andy

good morning. I’m in town with my wife visiting the Mayo Clinic. I’m an investor from Baltimore and am interested in exploring investment opportunities here. We leave today but will be at the farmers market this morning. If anyone is interested in an impromptu meetup I’ll be there!  Otherwise, I’ll stay in touch on BP for when we return in the next six months. 

Thanks,

Andy Schlessinger 

@Joe Scaparra and @Greg H.  I hear you both.  I guess I've been spoiled to have my first investing experience in an area like Baltimore.  There's a contact I have in Denver that says the same thing: good luck with the 2% Rule out there.  Just from the news you know how harsh life is in some areas here, but the cashflow is great.  I'll be looking more at Texas in the next few years, and I've been looking (browsing really) a bit in the Dallas, Houston, and El Paso areas.  I'd think Tyler is a closer fit as well, though I'm not too sure.

Thanks for the input.  Great conversation.

@Joe Scaparra  Good to know.  I've kept my eye on the general prices in Austin, and wiht my family there, understand the California prices that properties have climbed to.  Just didn't know if that also applied to the less affluent neighborhoods as well. 

Any knowledge if it works in Houston, San Antonio, or Dallas?

Thanks,

Andy

I agree with @Josh Dillingham: pull it off the market, make some upgrades (even small ones), reset the clock and get it back on the market.  Case-in-point: I just sold a property here in Baltimore, Md that sat on the market for 2 weeks with lots of views but no offers.  I looked at the realtors' notes and found that people generally liked it, but weren't too impressed with the new rehab.  I took a chance, put in a counter-depth refrigerator (made the small kitchen look a little bigger) and finished (sheet rock, paint) the small laundry room in the basement.  All said I spent about $2K.  I put it back on the market and got a full offer that week.

Thought I'd jump on here JUST because you are from Austin.  Grew up there and have been trying to get back for 21 years!  I agree with @Joe Scaparra to a certain degree: know what your goals are and then go from there.  But you have a few options.  1.  Sell and reinvest the proceeds into other properties that'll achieve the 2% rule.  May be difficult in the Austin area, but if it's achievable, do it.  Love Joe's recommendation on multi's.  2. Keep it and enjoy the $1000 net per month (assuming a $4K property tax bill).  Not a bad way to go, but just keep in mind you have some equity sitting that'll get you to your goals quicker if you use it.  3. Keep it, pull out $75K on a refi, enjoy your 2% rule you just achieved (sort of), and reinvest the rest in to another property.  

Had to jump in on this thread as I'm looking to expand a bit from Baltimore, Md.  I've been doing this for about 4 years and I've found that those investors that take the formulaic approach last the longest.  Without hitting the 2% rule (and the corresponding 50% rule), your money is at too much risk.  If something goes wrong, you don't make enough from the investment to cover the costs, which means you have to dig into your personal finances (which means it's earning a negative rate of interest and not a good investment).  That being said, 2% is the goal and you should get as close to it as possible.  I'm currently averaging about 1.75%, but it's not too hard to get to the 2% rule here (Baltimore) if you own in the right neighborhoods.  Those areas are very lucrative.  I wouldn't worry too much about the neighborhood if a) the numbers work, b) it'll rent, and c) you get a good property manager.  Getting properties in tough neighborhoods is a great way to get started...and stay in the game as an investor.  You can avoid whole sections with board-ups, but don't be too afraid to look at lower income areas.  Remember, you CAN provide quality properties to low-income families at market prices with much less investment than you can in an expensive neighborhood.  You're property manager will handle the rest.

Love the idea.  Of course, as everyone else has said, vet them just like any other tenant.  The only difference is the income requirement, which (IMHO) is nullified by the 12-month prepayment. Credit checks and other financials are only there to see if they have the ability to pay the rent. Pre-payment takes care of this. Now the only thing left is, "Will she be a good tenant?".  At the end of the lease she'll either re-sign (which means another vetting process - with, perhaps, another 12-month prepayment!) or vacate, which would be the same for any other 12-month contract.  What's the possibility of requesting a 24-month contract and pre-payment?  Does this change your risk tolerance?  It would for me.

Personally, I'd do it for the experience alone if everything else checked out.