All Forum Posts by: Christian Clark

Hi BP,

I have another one under contract and am struggling to feel confident in moving forward.

It's a fourplex in San Antonio in an area called Gardendale (not to be confused with Greater Gardendale which is supposedly one of the worst neighborhoods). My understanding is it's a C neighborhood with a mostly working class Hispanic population. Would love to hear any feedback from the locals or other investors who own there.

Just like my recent experience in Columbus I am struggling to find property management who can return calls promptly and feel confident on quoting me rents. Websites such as Rentometer, Hotpads, Best Places, MLS, and Zillow give a large range of rents ($800-1200 for two beds for instance).

Pros: 

Price per door

Centrally located location

Fully rehabbed

Low downpayment if I use FHA and live in one unit

Meets 1% rule

Cons:

I can't find consistent data on rental income or a PM who works this neighborhood and feels confident in quoting me rents

Reviews on AirBNB mention the area is "sketchy, questionable, Uber drivers make comments like 'Don't go outside at night.'" My realtor had an AC condenser stolen in the neighborhood. 

Building has no AC (we can add window units). This seems like a big deal to me having grown up in Houston

Building has limited on site parking

Building has no onsite laundry or hookups

I have to relocate in order to comply with FHA rules

Square footage is quite small (650-680 2 beds and 360-390 studios)

County seems like they are aggressively raising taxes each year to catch assessed value up with market value. From 20 to 21 assessed value doubled! From 21 to 22, it went up 18%.

Does not cashflow at least $100/door

Looking forward to any feedback from San Antonio locals or other investors!

Thanks in advance!

Christian

Belated thank you to those who took the time to respond! 

@Zach Wain Are you sure about that? I am being told Texas has privacy laws in place where the government actually can't see what the house sold for and the sales price does NOT impact tax assessed rate. Can you please double check what you were saying?

I just wanted to say thank you to all of you for your time spent in responding. Very informative and entertaining and helpful. 

Particularly @Scott Mac for the extra effort with the screen grabs! 

I have passed on the deal I was so considering so the hunt continues -- San Antonio, Columbus, and maybe with more research Kansas City.

Hi BP,

Another quick question as I continue my journey towards first purchase. How do you seasoned investors budget taxes?

In CA, it seemed like purchase price became the new basis for property tax, but in Columbus and San Antonio, tax rates are applied on an assessed value which is significantly lower than market value. 

I have been taking the tax rate from the county's listing of the individual property and applying it to my offer price. However, this significantly impacts cashflow. On a recent deal I had under contract, the lenders quoted $107 per month in property tax which I assume comes directly from the county, but I was budgeting $353 based on the rate applied to my offer price. 

My thought was that this was a conservative approach, but perhaps I am being too conservative? That is, if assessed value never, ever matches market value, I'm being too conservative, but if something changes, and assessed value catches up with market value, I'd rather have accounted for that up front.

Looking forward to any thoughts.

Thanks!

-Christian

Out of state newbie here. Just wanted to get a gut check from the more experienced folks about the realties of owning small multifamily in C class neighborhoods.

I have heard "C Class tenants do C class damage to your property so budget accordingly" Maybe 5% repairs gets bumped to 10%?

I have heard "I have had 4 murders to date."

I have heard the tenants generally leave every 12 months, so budget $2500 turn every year. Does this come out of the 10% or is additional?

I have only found one property manager who will touch this neighborhood. What happens if he quits one day because I'm a small fish and ask too many questions for his busy schedule?

Appreciation looks great, but it feels like a huge headache for cashflow that is less than a 3 year treasury. Maybe even negative depending on how it goes. 

Really wondering how other seasoned investors think about this stuff and if perhaps there are still B neighborhoods in San Antonio or Kansas City that cashflow if the only neighborhoods that cashflow in Columbus are C class.

I'm also wondering if it's any better in single family.

Thanks in advance to anyone who can share some expertise and insight!

Thank you all for your response. If anyone else sees this, please feel free to reach out. 

Hi BP,

First, I love this community! It's been so helpful.

I am new out of state investor with an accepted offer on a duplex in Columbus. I am building out my team and am in search of a property manager and contractor. I am primarily looking at properties in Hilltop, North Linden, Franklinton, and the various areas east of downtown.

I have called a few property managers so far and they are not very responsive. I realize I'm a small fish with just a duplex starting out, but I hope to have 8-10 doors in Columbus by end of next year. Hopefully there is someone out there you can recommend who is knowledgeable and experienced but still has the time to work with a newbie like myself.

This duplex seems to need a new kitchen, paint, and maybe some new flooring, but who knows what the inspection will turn up. I am looking to find a contractor who is looking to build a relationship with new investor for the long term. I myself am somewhat of a numbers guy so ideally someone who has an eye for the modern day design choices (while keeping budget in mind).

I just arrived to Columbus this evening so would love to meet folks this week while I'm here. If there are any REAI events or meetups this week, I would love to hear about them!

Thanks in advance!

-Christian 

@Katie Miller Family just bought the book today for an Xmas present and did not see any option for expedited shipping to guarantee arrival before the holiday. Is that something we should email you about?

Thanks everyone for your responses. 

@Logan Allec I'd be curious to hear what areas you're thinking of. Even the 3 or 4 units in LA I evaluated do not cover the repairs, vacancy, capex given the low rental income and rent control.

@Christian Chevier If you have any advice on how to find a market, I'd love to hear it. Right now it seems there are endless possibilities.

@Katie Miller @Mindy Jensen Do either of you know when the live webinar will be scheduled? I'm about to go abroad for vacation. 

Also is it too late to order today 12/17 or tomorrow 12/18 and receive the physical book before Xmas?