All Forum Posts by: Jeremy Pakalka

Come join us tomorrow as we reboot one of the better meet up events! Simple Solutions Realty has partnered with Networth Realty, Capital Title, PMG and DRC to start the 6 Figure Real Estate Mixer! The Redneck Country Club has been rebranded as the Southside Sporting Club and the first event is tomorrow. Come from the food and drinks but stay for the networking. Happy Hour starts at 5. RSVP for free food and beer tickets! I hope to see everyone tomorrow!

The Houston Forum has been slow and I have been away for awhile...it great to have someone post here again!

I would agree that the market has slowed down but there are still good deals out there. The trick is to make sure you have a realistic ARV when you look at a deal. I think the pending and available listings in each neighborhood tell the current story versus sold listings. 6 months ago the Houston market was still on fire and everything seemed like it sold in days, if not hours. If you solely use those comps to find the resell value when you complete the project, you will be setting yourself up for failure. Also, be careful on current appraisal value vs the market. All appraisals, especially with investment loans, only look at sold comps to find the value so houses will still easily appraise with a lender right nor. However, will it sell for that value when the work is done?

I would also want to point out the variance in sold listings vs active/pending listings differs with different price points. Lower end ARVs (100-150k) will see less of a variance than higher end ARVs (500 to 750K) here in Houston. In other words, the higher end value properties are seeing a larger decline in sales prices than lower end properties. The lower end properties that are not seeing any decline are usually holding values but longer DOMs than months ago. 

All of this adds up to longer holding costs for all investors on all properties as well. Most investors have already realized this situation but homeowners (sellers) still think the market is red hot. I can't tell you how many times I have heard a seller say something along the lines of "My neighbor's house is smaller and sold for XXX so I know mine is worth more!" There are deals still out there but you have to be careful when looking at the end value once the project is finished!

Let us know about the Holiday Party! I miss the old days of pre-Covid meet ups!

Davina,

There are a ton of options out there to finance real estate and more ways seem to pop up everyday. I am constantly getting bombarded with ads from lenders about how their new loan program is the best since they offer XYZ terms that are different than everyone else. Be careful about what they advertise since you may or may not qualify for that particular loan package once you submit your financial information. Make sure you have been fully qualified and understand the loan being offered before submitting an offer on a property. I have seen investors have to back out of a contract and lose earnest money since they did not fully understand the loan they intended to use. You can easily avoid these problems by doing as much research as possible. Make sure you shop around for the best lending strategy that fits your personal needs!

@Jason Vo I agree that you should do your own diligence but an agent can help. The best answer will always be from an insurance agency. 

@Ben M.

If you are working with a Realtor, they have access to the MLS and there is a way to see flood plains in the Map feature.

Brian,

There is not a ton of multi-family in Houston so I would not restrict your search to 2 areas. Most of the good multi-family deals I see are in the south of Houston down to Galveston. The hardest part of multi-family in Houston is being able to put a solid value on the property. I have looked at some properties and I cannot find a similar comp that sold within the last year in that area. This makes getting a loan hard to calculate since its hard to guess the appraisal amount.  I would be more focused on the cash flow you are looking for and see if you can find a property that fits that criteria. 

@Brendon Morin There are good deals to be found in Houston for multifamily properties but there are some issues you need to be aware of. First, there are very few in each part of town. It can make comping very hard to find a good value on each one. The second issue is getting it appraised. Since there are so few good comps, it is difficult to know where an appraisal's number would be. I was once looking at a triplex that was being offered for 350k and I had a friend of mine, who is an appraiser, tell me his number would be close to 250k. This means I could only get financing on the 250k and I had other opportunities that made more since. 

@Cynthia Dimitroff It is really up to you. If he is a good tenant and pays on time, it might be worth it to keep him happy. I would make sure the security deposit is enough to keep him honest. A happy tenant is always better than a pissed off tenant. I would also probably have him sign a new lease so if market rents go up, you can renegotiate all terms.

@Chris Frydenlund I would focus on making your letters unique. Everyone can copy and paste an example letter but it will not stand out. The list you have is the same as everyone else so they are also sending letters to the same addresses. 

@Larry Murray Do not worry at all. I get angry phone calls all the time. Their house is on a list somewhere and they have received multiple letters and this is their way to make it stop (it wont stop it though). I even had a letter mailed back to me cut up into a hundred pieces.  I laughed when I opened it because they had to take the time and money to send it back to me. I almost mailed them another one but I didn't. If you are not getting angry phone calls and having people laugh at your offers once in awhile, you are doing something wrong.