All Forum Posts by: James M.

@Todd Dexheimer and @Joseph Cacciapaglia its interesting hear opinions like yours and it mirrors just about everything I've read. Of course no one knows for sure. I'm hoping for a down turn, but I also know I can't get my hopes up. Thanks for the advice folks, I think MFH are probably the way to go for me. I know long term I want it in my portfolio anyway so I think building up cash now and striking here in November/December if the deal looks right will likely be my move.

Thank you for the replies!

@Joseph Cacciapaglia I'll definitely be waiting to buy my next investment because, one I'm building up cash, two I want to see where the economy goes and if it'll be easier to find a deal 6 months to a year down the line. I'm open to doing rehab, but my overall goal is definitely to buy and hold indefinitely (until it makes sense to sell of course) as I look to this being an income replacer. What are your thoughts of San Antonio in general with the current economy and how fast decent buys fall off the market? I know that is like asking a magic eight ball but just curious.

@Jaysen Medhurst Your points are all that I've read and it all makes logical sense. With the knowledge and skill I've gained being a landlord to a single family home. I know I can take on additional and unique challenges of a multi-family. I'm curious on your thoughts of units that are 5+. Would you recommend someone such as myself with capital such as myself look into something like that? If so, would one usually team up with other investors in their area to pull this off? Would meeting such people involve going to my local real estate meet groups? Or would you recommend I do a 2-4 multi first to get my "toes wet" so to speak in this slightly larger space?

@Todd Dexheimer Man, don't I ever agree with you more. I really wish I could find something at 10 percent or higher in San Antonio or between New Braunfels etc. Its very hard to find without connections or getting lucky and so on. My current single I bought just before San Antonio got big and its about 10 percent, maybe a .5 percent lower then that. I'm happy with it, would love to find more at 10 percent and I'll just sit on my money until I do. If not, perhaps I'll have to settle for a MFH that starts at like 6-8 percent with good reserves for down turns/repairs and slowly have it build up from rental increases... I don't know. Agreed with you on the singles being more plentiful for sure.

TO ALL: Do you find that the MFH prices are more "realistic" to their CoC returns as they are tied to their possible investment and no necessarily a house one traditionally buys as a place to live? For example, a SFH could be 300k and give you zero return more often then you'd find a MFH that is 300k and give you say 6-8 percent return as they are tied to rental income and not just a living place.

Hello!

I've been a SFH investor for about 2.5 years now with only one location/door. I had to put a pause button on saving for real estate investments while my wife was not working. But now we're back at it. My goal is to try to minimize locations while keeping a 10-12 percent CoC return in the San Antonio area.

More generally though, I've been looking at going into multi-family housing more as, again, it would reduce the amount of locations I have to manage, at least in the short-medium term. In particular I'm able to save up anywhere 80-100k a year towards this endeavor. With that said, I'm curious in what ways multi-family scales better financially then a single family residence? Are these benefits seen in smaller multi-families such as 2-4 doors? My goal would be my next purchase being a 2-4 door multi-family. I don't think I have the income/connections for something larger then that, but I suppose I could look at it depending on price and oppurtunity.

One of my direct questions are: 

• In general, is CoC return better on a multi-family that is 2-4 vs. a single family?
• Is it easier to find a deal in multi-families based on CoC return then single family? (I don't mean in numbers, but rather by percentages. I feel I have to dig to find an investment even close to 10 percent CoC for a SFH)

I would rather take 80k, for example, and instead of getting 2 or 3 SFH's, I'd get a single multi-family home. Fewer locations I feel would be easier to manage (number of tenants/placing/dealing with tenants not withstanding.). If I have the income, is there any down sides to going this route over SFH's? I feel like perhaps its an income issue that people don't jump on this, outside of house hacking which I can't do with my family.

Ok, I have a weird situation here and at the get go maybe it sounds like a bad idea.

99 percent of the time I wouldn't mix investments with family/friends but I have this situation I'm trying to deduce if it makes both financial and social sense.

My mother is looking to buy a home downtown San Antonio, one where there is a clear cutoff for an apartment specifically to AirBnB the other half of it. She wants me to go half in with her. Who splits what on the mortgage and who will deal with the capex/repair/vacancy and so on is still very much in the early phases and will need to be very strictly stipulated in the coming days.

My mothers end goal is to get an investment property with lower buy in (we'd go 50/50 on down payment with a loan), live on one side and she'd AirBnB and turn over the other side. She currently has AirBnB experience and does something similar today with the place she currently lives, so she is not afraid of it.

My end goal is to continue to invest and gain property and San Antonio is very, very hard to find worthwhile properties even getting close to 10 percent CoC.

Both of us are high earners (100k+ a year) with Excellent credit. In a worse case scenario I would be able to take over the mortgage with zero problems (well, except investment wise).

I really have two questions that perplex me at the moment on the off chance I even remotely consider this:

1) She does not currently own a home and so this could potentially be an FHA loan. Would I be able to be co-borrower even if I personally have an FHA already on my owner occupied house I currently live in? Or would it have to be conventional since we'd both be on the loan?

2) How the heck does depreciation taxes work here? My general reading is it'd be your normal depreciation, divided by the area where the AirBnB patrons would live. But then, does that then get divided again between the two of us? Trying to make this very tax legal as possible.

3) Do I need an LLC for this to be fully legal/make sense? (Ok, I had three questions :))

All the logical places indeed. Thank you @Rick Pozos I may direct message you in the future, looking over your profile seems perhaps you have an open group? Would love to meet others. Perhaps next time you folks meet up I'll join. I'm going to try and find others as well. My initial post seems counter intuitive now that I've discussed it with you folks, but that is why I'm here! :)

All great responses. Thank you all.

@Rick Pozos that makes a lot of sense and is my intention is to meet others who are like minded. I suppose I was approaching the mindset a bit different initially. Truth be told I didn't know how one of these meetups worked, and I suppose as well they are all different. I'll look up the Alamo investors group and I'm keeping my eye open on Bigger Pockets for meet ups. Is there any other recommended sources to find groups in my area that you know of?

@Jonathan Twombly that makes sense and when you reference "Broker" are you referring to a wholesaler or perhaps there is another entity I'm not familiar with that deals in real estate selling. And agreed on the human nature and getting to know others. My goal with this is definitely to find like minded people and when I get to a point I'd love to help others when I'm not such a newbie.

@Jacob Sampson Agreed on all of that. I have a potential purchase through extended family coming up and relationships are everything. While my objective are self serving initially my goal would be to get to big enough size to be able to "pay it back" for sure in a "I'll scratch your back" mindset. And it's great to find like minded individuals as most of my friends/family are not in this mindset.

This may be a dumb questions, perhaps? I am a San Antonio investor and up to this point I only have one rental but I'm looking to pounce on another two deals later this year. Up to this point I have not networked at all, not gone to real estate groups and so on. It's not that I won't, but I just haven't and I am fully intending to start doing just that starting early this year.

But my main reasons for doing it are A) to find better deals because the San Antonio market, at least through MLS/Zillow etc can't find anything coming close to the 1 percent rule, unless I'm looking at things wrong. B) to find resources like recommended/reliable CPA's, lawyers, handymen/electrician/plumbers (note: I have these but being small, would like to cross-shop for a more long term partner) and finally and most importantly find a reliable wholesaler with integrity.

So I guess my questions are two fold:

1. Does networking actually help you find good deals? Wouldn't those who are in those meet groups just want the deal for themselves? I feel like this logic is counter intuitive.
2. What are, in your opinions, the greatest benefit to networking in your area? Is it mentorship? Is it team-building (CPA etc) references?

Very fair point and exactly what I was thinking. But being I've only rented one place and did one deal wanted to solidify that thought process. Thanks again Jaysen and lets hope 2020 I can find 2-3 great deals through networking :) Maybe I can even make this family one work, we'll see. I'll have to get creative. This thread has renewed my sense of being more conservative then I have been, I haven't gotten a new deal in well over a year, so I became lazy. 

Thank you @Jaysen Medhurst I agree I would much prefer a 10 percent or greater CoC ROI. Sounds like I need to get off my butt and network then, obviously MLS, Zillow, etc. has nothing that will be of value in that range nowadays. What is crazy you could on Zillow just 5 years ago. Time flys.

Thank you very much Jaysen for your advice and help and everyone on here. Guess I have some things to think about to make this deal with the family member more palatable. I think I should figure out a way to at least get 10 percent CoC.

One more thing @Jaysen Medhurst you had mentioned you would shy away from SFR at 150k range. Is that because you'd transition to Multi-family past around there? Better returns I assume for your money I assume? Also of course I know it does mean holding back more money for repairs (two of everything, except for roof etc).