All Forum Posts by: Dave Chapa

@Rolando Paz Congratulations!

Just curious, how are you only putting down only 5%, is this a privet loan?

Make sure you have all your cost including CapEx in your numbers.

What to look out for on the renovation side:

Electrical: have an electrician check the electrical. The last house I renovated was a 1955 pier and beam and the electrical was a rat’s nest, had to install a new panel and 1/2 the wiring.

Plumbing: scope the main lines to make sure there are no obstructions and check for water leaks. Water leaks can be costly especially if you are paying the bill.

Asbestos: Check for asbestos. Flooring tiles, siding, insulation, etc...

Lead paint: Anything build before 1978 could have lead paint.

I have never hit our renovation budget, it’s always been over because of hidden issues found during renovations. I would take you renovation budget and bump it to 36k. (You can thank me latter) :-)

Keep us posted, look forward to your success!!!

@Dave Fagundes

HCAD isn't a good gauge for property values, it's a starting point but won't give you realistic values.

Have your realtor pull comps or If you have a good mortgage broker they can pull comps also.

I work with a mortgage broker that is more than willing to pull comps and help evaluate deals. I have closed 5+ loans with him and, sent him sever referrals. That is all part of building a team.

With our apartments and rental homes that a no, we don't let tenants change locks. We must have the ability to access the property; with prior notes, in case of an emergency or maintenance issue. However, we do change the locks with each new tenant, that way they are the only ones with the key accept management.

As for changing the lock on a room you want to rent, you would have to discuss it with the landlord and have then agree.

If they own the property, then that is a lease, if they are leasing the property, then that is a sublease.

@Dave Fagundes 

"So the big question is: Does the rise of the mid-rise in the Inner Loop spell decline for the market in rentals of units in smaller multi-family? Or are there other factors that cut back against this trend? Thanks for any thoughts on this."

Short answer, No.

Mid to high rises are a different class of properties compared to small older multi families. Classes D to B- in the small units because of age, condition, and location. While the mid to high rises are class B to A. Different demographics as @Kyle Bryant stated.

Gentrification can also plays a role in these small milt-family properties.

Vacancy rate can vary because of quality, management issues, hurricane, economical turn down, high crime, bad schools, etc...

So, I would look for class D to C- property in a solid class C+ to B area and not worry about the mid to high-rises. I would look at that as opportunity especially because of the type of property you are looking to buy.

My apartment, for example, was a class D- property in a class B area. After a complete renovation and turnover, it's a class C+/B- property and, we are above market in rents per S/F while maintaining high occupancy. In Katy there has been a huge influx of new apartments over the years, to the point of being overbuilt. however, we are still maintaining a high occupancy rate because of the class differences.   

@Andrew Postell I like the questions!

@Robert Murphy LOL, can't agree with you more. My hands were shaking when I was opening the door to the house that was on a flooded street. It was saved because it was on pier and beam. 

A friend of mine just sold one of his rent houses with a repaired foundation, it sold for over market price. So, don't be scared away, make sure you find a reputable foundation company that backs their warranty.

We have all 2/1 in our apartment but we get calls all the time for 1/1. 

Good advice from @Michael Le, run you numbers a little higher. 

I refinanced with a local bank from a 20/5 4.9% to a 25/7, 5.25%, it not common but it's out there, just takes some looking.   

My two properties in Old Town Katy survived all 3 floods, not sure if it worth getting now. I was anxious has hell though.