All Forum Posts by: Gunnar Teltow

@David O. thank you very much for that referral - incidentally I spoke with Becky Swanston at Conrex and she mentioned FirstKey as well, so I'll definitely give Bill a call.

@Michael Weller this is our second go around so we have all the pieces in place, from inspections to closing to property management. I guess you're right in that lenders are risk averse and they sure like to give money to people who have done the exact same thing before (hopefully successfully).

@Bryan Hancock & @Jeff Clawson, seems like that's the answer, so thank you for clarifying that for me, and saving me the time checking around Austin. I did talk to Tim Herriage at B2R yesterday about another very nicely cash flowing St. Louis portfolio that I want to put under contract and he said that would absolutely be in their wheelhouse (he's in Dallas but they lend in most states). I then spoke to one of their analysts in Charlotte to get an idea about the terms. Overall not terrible, worse than a bank but not by much, and there seems to be less bureaucracy involved with them.

Hello BP community,

We're now up to 30 units in St. Louis and would like to take this business to the next level. Specifically, if such a thing were available, we would like to start with $1 million in capital to deploy: $250k or so equity from us and a $750k LOC.

From the forums, it sounds like a local portfolio lender would be ideal for this. But local to the properties or the borrower? Our investment firm and the family office are in Austin, and the properties in St. Louis.

Any insights/recommendations would be very welcome, and if you're a lender or broker please contact me.

Thanks!

@David Jiang congratulations!!

I invest in out-of-state properties as well, and it looks like you found a great deal. Excellent economics for something of this quality/location. I'm pretty sure appreciation is in your future, in addition to the cash flow. Nice job & good luck!

P.S. You're 100% right, finding the right team makes all the difference.

@Chris Frydenlund, without knowing anything about Hutto, I agree that this looks like a great starter home to live in. It will likely realize appreciation over time, and your payment is probably around what you'd pay for a mortgage plus taxes and insurance.

It will not make a good investment unless you don't mind putting cash into the property every month while waiting for appreciation.

Again, I don't know rents in Hutto but for reference, $400k 3,000sf houses in Circle C rent for $2,200-2,400 so it seems unlikely you'd achieve $1,700 on this one. Rentometer for example says $1,080 is average for the neighborhood.

Good luck!

@Gautam Venkatesan yes those are bars, and we like to put a cage on the A/C units as well. Door bars are not common and only some people bother with A/C cages. It's low income with some property crime but generally stable neighborhoods with a high % of rentals, similarly to what Lisa Phillips invests in. A couple of pics below. Those were taken with my back to one of the duplexes.

@Bob Hines, let's get together next time I'm in STL. Maybe you can email me your info. Thanks!

@Nicholas Thompson welcome to Austin! (Although you've been here a while!)

I agree with @Jon Klaus, Austin is not great for cash flow but awesome for developing and flipping, which he is a master of.

I'm more of a buy-and-hold cash flow investor so I invest in St. Louis where I used to live. There are also good opportunities from what I hear outside of Houston, in San Antonio, and more rural areas of Texas.

I looked at a turnkey duplex development in Kyle. Because they were new units, you could maybe break even after all expenses and the mortgage, and then own them in 20-30 years outright or cash out if/when the value increases, which could easily happen as Austin swallows up surrounding areas. I ended up not buying, the price was $180k or so for $1,300 in total monthly rent so was a little thin. You could buy 6 little 3/1s in St. Louis for that with a total gross rent of $4,000 or so.

Neither strategy is right or wrong, just depends if you're gunning for appreciation or current cash flow. Just be clear on which one it is. Good luck!

Hello everyone, and thanks again for all the great comments and suggestions on my last post regarding the low priced rentals in North County, St. Louis (First two deals under the belt!).

Last Friday, we closed on Deal #3:

• 2 duplexes/4 units right next to each other
• all units are 2/1s with basements and 2 parking spots in front per unit (8 total)
• each unit is rented for $687, some market, some Section 8
• $2,748/$32,976 gross monthly/annual revenue
• $100,000 total purchase price for both buildings ($25k/unit)

The insurance is $766/year for both. I wish I had actual numbers on the other expenses but the way these deals seem come in and need to be committed to and closed leaves little time for details. I had to use the dreaded 50% rule. Good margin for error though.

Also, this one didn't come with financing but I think that could be arranged after the fact in a few months or a year.

Within just 5 months, we're now up to 30 units (26 SFRs and 2 duplexes) in North St. Louis County, and still actively looking for more. It's almost an addiction once you get started! "Hmmm let's just buy this one more and then we'll definitely stop to digest everything" ;)

This may turn into a horrible disaster or the best investment my partners and I ever made, we'll see. I hope it's the latter. Thank you for reading my posts and for all the great advice and support!

I was sorry to have missed the last one but I'm in this time for sure! Thanks James.

@Cory Adams

I just closed on a couple of duplexes last Friday and based on the comparison, your deal seems a little high. I paid $100k total for the two. Each unit is rented for $687 so the monthly gross income is $2,748. On the downside, I'll have to use a property manager and there's no potential for appreciation (they're not in Texas!!).

Your duplex is much newer and you probably live nearby so it may be worth while, and it looks like you're getting financing, which will help with the cash on cash numbers. It's borderline though. Definitely try to negotiate it down.

North City is worse by far. On par with East St. Louis.