All Forum Posts by: Cortney Arenstein

We are in the same boat as the OP--thinking through our options for after the youngest graduates. We are native Houstonians and LOVE so much about our city, but the heat and humidity makes it hard to actually be active outdoors for 9+ months of the year. (Lots of people do it but after hiking ONCE in Colorado we knew we couldn't stay here forever.) We love the desert+mountain climates the best and have NV on the list of places to consider. Thus my questions! Thanks for the response! 

100% would find a syndication to park it in. I have ten thousand reasons I would do this over the stock market (and I am an Investor Relations analyst by day, my hubs is a trader on his off days, we are both in O&G and KILLING ourselves to move everything into RE as quickly as possible.) I won't enumerate my reasons here because peeps be super CRAY about their opinions on this subject (stock market/vs RE) but seems to me you are looking for support on your lean toward RE over SM. (otherwise you would be posting on r/wallstreetbets and tagging DeepF*ckingValue, LOL!) And it sounds like you got it! 

Seriously though--if you need a passive parking vehicle there are SO MANY great syndication deals right now I would sell my first born (ok not really) to be able to put $500k into for a couple years!  Good luck! Keep us posted! This kind of thing is like CATNIP to this crowd! 

 This is VERY interesting to hear! Your choices and motivations sound very similar to ours... what about investment opportunities in the area? I was under the impression RE was a bit pricey in NV outside LV thanks to the recent growth? (Had a friend sell their modest suburban home in LV and buy a McMansion in Houston with cash from the proceeds and have enough leftover to seed their business. So maybe I have the wrong impression?) 

 LOL! Specifically to the OP: "Have you been to SA in the middle of August?" SO many folks from Cali I know move to TX and can NOT take the summers here. It is nothing like anything you have ever experienced. Even in the dessert. Be warned. 

But we natives (Houstonian here, not from SA but it's only a 2.5 hour drive) have adapted I guess? 

Hey there! Houston agent and investor here. I won't beat the horse to death about $5k MAYBE not being quite enough--everyone else has made that point well, but it IS a valid point. The places you can afford to buy with $5k only (assuming you plan to house hack in some capacity) would likely be way-way-out suburbs or crappy little hovels in VERY sketchy areas that would need a TON of rehab--i.e more reserves than you have currently. The days of getting anything remotely livable under $200k in Houston and surrounding areas are pretty much gone. I won't say it's impossible to find something, but you will be competing against investors paying all cash--kind of an uphill battle. 

More to the point though, is the fact that Houston in general is a bit light in small multifamilies. I have been watching small multifams all over the city for 10+ years (namely 4 units and under) because I have had investor clients willing to buy them at nearly any price in the past. They are RARE. I don't know why we love our free standing/townhome/yards here in The H, but we do. 

I follow one incredible investor currently building duplexes in EADO and nearNE side as a "build to rent" model. It is definitely a trend I hope to see more of (and possibly participate in soon!) I know a few others are doing it--but as it sounds like you are looking for "affordable" duplex/triplex then new builds don't sound like your model. 

All to say--congrats on your license. Have you searched for the duplexes and triplexes in the greater Houston area on the MLS? Have you found any you are interested in? Any that fit your budget? I don't say it to sound discouraging, but my guess is you have not found many if any...I have a standing alert on them and get maybe three alerts per week--often for the same properties doing the back and forth option pending/price reduction dance? Sad potatoes.

And so far no wholesaling lists have produced many small multifams (a few they will call a "duplex" because it has a garage apartment or a "triplex" because there are three little crumbling 1 bedroom shotguns on a single lot, but typically the low rents--even after rehab--won't support the purchase price as the lot value in these "gentrifying" is frequently more lucrative) 

Personally I think MANY areas of Houston would benefit greatly from an influx of duplexes built-to-rent. Let's connect and maybe at some point in the future we like-minded investors could get together and make this dream happen! 

I would love to get in on a build to rent duplex subdivision somewhere out near all the new warehousing developments happening--THERE's the dream! 

Someone in the thread mentioned maybe buying a SFH and renting out the rooms--if you have buddies willing to do this, I 100% recommend that particular kind of house hack in your limited capital situation--especially if you are single/no kiddos kind of thing. (I only mean--it is often a hard sell to have roommates when spouses and kids are in the mix). This would allow you to do the smallest down payment, get into a house in an area that is increasing in value, (future equity upside) lower your monthly rent payment by switching to a mortgage and living rent free when roomies' rent offsets your portion.  You could even lock in your roomies to a two year lease, move out after one year and repeat the process while keeping renters in the first house. Etc etc--get the idea? 

I LOVE seeing young people really jump on this mindset. I wish you the BEST of luck. Most of us would give our left ear and more to be able to turn the clock back and start early on this path. I look forward to watching your growth and success! 

@Yosef Lee and 

@Adrian Fajardo

Sorry I was MIA--I live in Houston and we had no power for half of last week and no internet until this past Saturday--just now getting caught back up--missed a lot in my unplanned week off the grid!

@Nick Koren While I am certainly a new investor, I am NOT a new agent and I have been providing detailed and accurate comps to SFH investors for almost 6 years now. I'm actually rather skilled in this area and have tracked my own success rate from the beginning. (I am kinda a data nerd) It is a matter of pride for me that I learned early to find excellent comps. I studied the process and learned from some of the best. While I agree there is no fool-proof way to determine rehab costs or perfectly accurate ARV, I can say with confidence that (for example) a fully rehabbed 3/2/2 with 1200 sf is invariably comparable to the fully rehabbed 3/2/2/1200sf house in the same neighborhood and NOT with the 4/2.5/2/1750sf house.

And while the ABSENCE of that nearly identical 3/2/2/1200sf house as a comp can mean that you have to extrapolate from the available 4/2.5/2/1750sf house with the whole plus/minus song and dance that appraisers often need to do, that is NOT what I saw in the proffered comps for the NW properties. 

When I say that the COMPS were unethically selected, I do not mean they were selected in such a way as to be debatable. I mean I have seen very clear, directly and inarguably comparable properties sold within 6 months of the subject property left off the list of comps, while larger properties whose square footage and bedroom count pushed the value far beyond what the subject property could ever manage to attain (without adding square footage!) were included. 

I truly wish I had saved all my own analyses so I could show you what I saw. I'm not trying to be mean spirited here. 

I came to BP looking for real experiences from a community I have come to trust. I certainly got far more feedback than I expected and far more vitriol than I guessed could be out there. I got many long time investors weighing in and while they were certainly more diplomatic than some of the others (the ones who seems to be a bit newer and clearly frustrated) the overall consensus remains. 

I certainly did not mean to "burn any bridges" with anyone here. And personally I think your responses have shown real class. And as you said, there is something working to keep your company afloat. Just because I (and several other people here) can't fathom the business model that makes this work doesn't mean it doesn't work for ANYONE, right? Right. 

I maintain that perhaps NOT providing comps at all would be the most ethical path forward. The seller's agent does not provide comps to the buyer on the retail market (without the buyer's agent reviewing them for accuracy.) That would be silly and a conflict of interest. The NW asking price is sufficient to determine NW's opinion of the potential value of the ARV comps (safe to assume it is north of the asking price at least a little). And at least the newer investors who do not have the MLS access to analyze dozens of offerings for a few weeks for the sake of checking trends would be forced to do GENUINE due diligence (and not just Zillow and guessing).

But hey. This has long since become a conversation that belongs to the entire community. I saw a lot of respectful and thoughtful responses--more of those than the frustrated angry ones. So barring a direct question posed to me from someone here (you or others) I will leave this wildfire I accidentally sparked with my unwitting question for the posterity of the collective. 

@Sawyer Smith

This post is so great. Needed this chuckle. Thanks!

(Don’t get me wrong. It’s all creepy too but the way everyone tells their horror stories really feels like we are all at the pub having a pint and sharing experiences. Man Covid has me missing meetups!)

@Sawyer Smith I have always wondered if there was any way to make a lease require a certain basic standard of health safety... but I’m told pretty much “no” by most pros...

@Dorian Young if you really are not going to use them to buy or list then $50 is pretty reasonable on the low end. To get truly excellent comps (the kind an appraiser would be likely to use) it can take a few hours. (Really depends on the market and how many similar properties are nearby—suburbs are easier to pull comps for for example because of an abundance of similar properties in the immediate area.)

If all you want is a super basic CMA with your criteria (example: all active, pending, sold, terminated, expired & withdrawns (for the past 180 days) of ONLY 3/2/2s with 1400-1700sf in zip code xyz ) and then YOU go and sift through all the results (can be a couple hundred) to determine if they are actual comps or not (look at photos, determine if different subdivision is comparable, check for short sales and/or other anomalies by calling every listing agent of any property that seems like an outlier, etc... then sure. Pay less. That doesn't take your agent friend much time to pull and shoot you over a pdf (at least it doesn't in the Houston market with the MLS we have—I can't speak to other markets because they all use different software). BUT that isn't technically pulling comps. That's pulling a top-level CMA (comparative market analysis) and it is easy to misconstrue the raw data.

As an agent that has (in the past) pulled dozens and dozens of comps for no money (often for “friends”) only to also get no business from it, I can tell you it’s highly frustrating. I put a lot of time into the process and typically accompany true comps with in-depth analysis to explain to the person anything that the comps don’t easily reveal to the unpracticed eye. After all, as an agent I look at property every day all day and if I specialize in an area then I’m typically pretty well versed in what is “standard,” or “trendy” or “unacceptable” or whatever other adjective you can think of.

I applaud you for wanting to be respectful of their time. And $50 per comps would be fairly reasonable. But even more reasonable would be to pay them when you buy. (Assuming the seller is not paying because you are using a wholesaler or finding off market deals, you can write this into the contract and give them a decent chunk—doesn’t have to be a full 3% if they aren’t your buyer’s agent—but more than $50 would make sense if their work is the reason you made the purchase—) to make up for the hours of work they did for you prior to the buy. Make sense? Or... make “cents?” Hahahhaha! Sorry. Couldn’t help myself.

Keep in mind that great comps come from good agent that have done decent volume and understand the process well. You are not just paying for their use of the software. You are paying for their expertise in interpreting the software’s raw data into useful similar properties.