All Forum Posts by: David June

Hey BP friends! 

For about the past year, since finding BP I have committed myself to improving my personal financial situation and building a better financial foundation before jumping into real estate investing. I'm currently living with a roommate to save some money to pay down debt, but that situation is coming to an end sooner that expected, and I find myself either having to either find an apartment and continue renting or purchase a home sooner than planned. My debt to income will only allow me to purchase about $120,000 and in Houston that only goes so far. I need something habitable as I will be living in the property for a year before renting it out, and I need something reasonably close to work, so that leaves me looking at condos and townhomes. 

I'm curious to hear from investors experienced with renting townhomes/condos and what specifically I should be aware of and prepared for. I know not every community allows owners to rent the units out and I know many can hit you with big assessment fees for repairs, but other than I'm not familiar at all with these types of homes. Any advise, expertise, or words of warning are greatly appreciated.

Thanks in advanced.

@Daniel Wrentz I am still tweaking my business plan and continuing to save some money, so I unfortunately don't have those connections personally. There are a couple of local agents who are very active in these forums, I would probably link up with them first. 

Hey @Daniel Wrentz welcome. I am in Houston also, and have decided to start my journey with the BRRRR method as well. What I've noticed about Houston is it is very competitive, especially inside the loop. Most of the best deals for BRRRR will not be on the MLS. I would recommend seeking out wholesalers and a really good agent to help you in your search. I've seen a whole heck of a lot of freshly remodeled homes around "greater heights" and "east end" being sold by flippers. If flippers can make it work, investors looking to BRRRR can make it work.

Best of luck!

I would check with other lenders. My lender did not include my rent in my debts, and as @Cameron Tope said many lenders (not all) can include 70% of your rental income towards person income. Different lenders may have slightly different underwriting requirements that could work in your favor. 

@Nicholas Welch I would look for a lender that can apply the existing rents to your income. My lender can include up to 75% of rental income on existing leases to my DTI ratio. This may get you to where you need to be. How did you find this deal?

@Izaak Ruiz as a lifelong Houstonian I couldn't agree more with the folks above suggesting to live close to work. When you include the suburbs Houston is huge, and spread out more than other major cities I have been to. I used to have a nice apartment in a nice area of the city. My commute was between 45 mins to 1.5 hours one way every day. It was awesome living in the city and I fell in love with Houston, but I grew to hate my commute so much it effected my work and life outside of work. Soon after I moved to Katy 5 mins from my job. It was the greatest decision I could have made. I miss the city, but I can uber down anytime I want, I get a house for the price an apartment, and no commute doesn't leave me feeling like I put an extra 20 hrs in every week. 

@Kai W. That is true. The Houston med center is huge, and doctors/nurses will probably never be able to work from home. I am hard pressed to think of a industry more stable and recession proof than healthcare. I would just be cautious if you are relying on appreciation and have a exit strategy just in case appreciation doesn't match expectations. 

All that being said I still think Houston is a wonderful place to invest. There is steady growth, diverse economy, and its still affordable (for now) in areas. Best of luck!

@Kai W. Congrats on starting your investing journey. I can't speak directly to the pro or cons of "town home" investing, but I would consider the market effects of COVID and how it will effect demand in inner city areas. With more people working from home I think we will see a shift in the number of people wanting to live in the city and close to work vs those that can work from home. Suburbs offer more home for the money, better schools, and now less population density.

I think long term growth of any property inside the loop will be strong, but I wouldn't be the least bit surprised to see a slump, while demand in the burbs grows. 

Hey @Edward Johnson welcome to BP! Duplex's in the burbs will probably be few and far between in my experience. There is a neighborhood here in the Katy area called Silvermill. It is full of duplex's, and while I've seen most being sold individually as town-homes, I know a few have been sold as traditional duplex's. It takes some patience and research, but if you go looking there are a few. 

Also as @Jamal Fontenot had mentioned 5th ward is a up and coming area with plenty of development and gentrification, and I think poised for strong appreciation. There is also a fair amount of MFH's in that area, and while many need work the entry price is reasonable, and I've spoken to a few investors that are seeing great cash flow with little to no renovations. 

Best of luck in your investing,

Hey @Benjamin Carver. Fellow newbie here looking in Houston as well.  I agree that Bear Creek historically has had a lot of problems with flooding. I grew up in the Bear Creek area and remember it flooding more than once. It is something you have to be careful of all around the city.

I also think its really important to take what @Vijaianand Thirunageswaram was saying about location into account. I currently live and work in Katy. I enjoy it and would like to house hack a SFH here, but I doubt I would be able to find steady tenants in this area. Its probably a common problem in a lot of the suburbs. I've seen some plexs around town, and the numbers at face value look really great, but your usually looking at north of 300k for those which is out of my budget. What areas of town are you looking at right now?