All Forum Posts by: Brian Adams

I see @Raylor G. !

Well I personally think it is a good time to be getting multi-families in the area.  If fourplexes specifically, I would recommend ones that have at least two 3/2 units, as I've found those are a LOT easier to keep rented than 2/1.5 and smaller.  I also might recommend looking for ones with units that rent for no less than $500 ea.  Under that and your costs and headaches are going to increase exponentially as the available pool of well qualified tenants shrinks toward zero.  Again, that is just my experience and recommendations.

In our market at the moment, you'd be likely looking at paying about $180-$200k for a fourplex meeting that criteria in areas I recommend, and maybe $130-$160k for a duplex. Those are "retail" off the MLS deals, but good multi-family wholesale deals have been scarce or even non-existent in my experience here so far.

Hello @Raylor G.!

I'm an agent in the Killeen area that tries to work with investors when I can, and own a fourplex myself on the SW side of town, close to the new Wal Mart and Texas A&M Central Texas campus.

What has you interested in Killeen especially?  

Multi-families in the area do seem to be trending up.  A lot of Austin investors are getting priced out of that hot market and looking more in our area for buy and holds.  Fourplexes specifically imploded during the Recession, even while the area as a whole was mostly unaffected, because so many fourplex owners were out-of-state investors from CA and FL and had to sell in a fire sale, and several were foreclosures.  Prices started rebounding in 2010, though they haven't reached the 2007 levels yet. Now there are almost no foreclosures whatsoever in the multi-family market, and for the most part it seems like owners are hanging onto what they've got.

I have an investor spreadsheet I share. The tab that might be interesting to you is the "Income Approach" tab, that shows average cap rates and GRMs for SFH and multi-families in our area.

https://docs.google.com/spreadsheets/d/1NJhUwMD3M6...

Let me know how else I can help!

Thanks @Jon Holdman

I am indeed fishing for magic and miracles.  I don't myself know what her total finances are, but putting money into a refi does seem like her only option if she can swing it.  I'm trying to get more info from her on that option now.

Hello all -

I have a seller with a problem looking for a solution.

She owns two fouplexes in Killeen, TX (Fort Hood, TX) purchased in 2007 with two mortgages on each and has a balloon payment due in 2016 on the second mortgages. She owes approximately $429,500 on both, and I (an agent in the area) estimate the current market value of both at $320,000 ($185,000 and $135,000).

Gross rents are $4100 ($2500 and $1600).

She can't refinance because the fourplexes wouldn't appraise.

She can't sell because it would be $100,000+ out of pocket.

She can't continue renting, sub-2 or wrap because of the balloon payment.

Trying to avoid short selling and anything else that would damage credit.

I have no more ideas, which is why I'm here! Thanks everyone!

@Danielle Watts

Welcome!

I'm a Realtor in the Fort Hood Area that tries to work with investors when and where I can.  

There is a MeetUp group in the area I highly recommend when just getting started out.  They meet at El Chico's the first and third Thursday of every month.  I make it every time I can.  The link is here:  http://www.meetup.com/Real-Estate-Investors-of-Kil...

Hope to see you there!  Let me know if you have any questions about the local market or homes.

@James L.

Buy and hold multifamily is getting a lot of attention recently in Killeen.  That market is definitely trending up.  Firstly, it is rebounding from '08.  The crash didn't hit SFHs in Texas much, but MFHs hard because so many were owned by Floridians and Californians getting squashed elsewhere.  Killeen fourplexes in particular had their values cut in nearly half as there was a foreclosure epidemic for a year or two.  But now price have almost returned to what they were before.

Also, the white hot Austin market is driving out investors into our area, looking for buy and hold bargains that can't be had in that area.  There are no duplex or fourplex foreclosures in Killeen right now, period.

I myself bought a fourplex in 2012 owner occupied (FHA) and have been happy with it. There are some areas with fourplexes I wouldn't buy into whatsoever, but other areas I do like and keep rented well. I like the SW side of town for multi-family and buy and hold - there is a lot of new commercial development on that side including the new Wal Mart and Texas A&M campus.

For property management, there are some good forum discussions on BP on whether to do it yourself or have someone else do it.  My own thoughts are - stick with your core competency.  If you enjoy doing PM and are good at it, do it.  If you plan on making money flipping or searching deals, then have someone else do it.  After x number of homes, PM is going to be a full time job and a tether on your life, so you'd better enjoy it, a lot.

Call me if you want to talk more about multi-families.  My post is getting long, and a lot depends on your circumstances, of course!

@Chad Clanton

The deposit waiver program is unique to Fort Hood.

Or rather was.

While ostensibly still a program that the landlords can use, the Fort Hood Housing office itself advised me not to do participate.  She said they could no longer reliably live up to their side of the bargain - requiring Soldiers to pay rent before clearing housing (if they clear housing at all).  I'm not sure how many PM companies still offer the deposit waiver program.  It was common when I first got here, but no more.

@Brian Cowan

At the following link is a list of the current Fort Hood Basic Housing Allowance stipend (BAH): 

http://www.hood.army.mil/dpw/Housing/BAH.aspx

The median rent in Killeen is about $800/mo, including apartments though.  I wouldn't recommend rentals that rent for less than about $550 (duplex/fourplex units) because of the difficulty finding quality tenants at prices below that.  The sweet spot is probably the $1000-$1200 range, above which there are diminishing returns in the amount of rent you can charge for higher quality homes.

Most foreclosures in the $60-$80k range you could probably get between $850-$950/mo, but as an investor you obviously can't pay more than makes sense with the numbers.  It's not any 2% rule stuff, but I have never seen anything close to something like 2% in our area - not without a lot of work that had to go into the home and make the 2% idea meaningless. 

I keep an updated list of potential buy-and-hold/flip deals that come up on the MLS, mostly foreclosures, that you can check out here:

https://docs.google.com/spreadsheets/d/1NJhUwMD3M6...

I hope it's helpful!

Actually I misspoke - it is not a VA medical center specifically, just a 60% expansion of the Army medical center.

@Chris Hamm

@James L.

Well said Chris!

You left out the massive new VA hospital that is about to be finished around December or so, I think? Meaning Killeen will be "the great place" for military retirees and the healthcare workers who support them.

Also, I haven't verified this, but was speaking with an investor who mentioned the work on I-190 they're finishing.  Being a 6 lane freeway opens up the area to a lot of businesses that have requirements regarding being within a certain distance of an interstate for commercial reasons.  In the coming future, there might be great opportunities for the growth that is arresting the rest of metropolitan Texas to make inroads into the underutilized Killeen labor market.

As a Realtor and owner of a home, rental SFH and 4-plex in the area, that is certainly what I am hoping for.

Also, from my working with investors, the multi-family market is pretty hot.  There are 0 - zero - nada multifamily foreclosures on the market right now compared with lots just two years ago.  The buy and hold interest seems to be escalating in Killeen, in what was already a buy and hold town (60% of the population are renters).