All Forum Posts by: Andrew Martel

Dave, glad you decided to take the leap!  I am no expert and have only been in the game a little while, but here's how I find mine.  I'll break it down.

• Craigslist.  People post decent deals on there all the time.  This is also a good place to find and hook up with wholesalers.  Look for the "we buy homes" ads. Those are usually wholesaler dudes. Also, i place ads that straight up say "i'm an investor, i will buy your property". It works.
• Online.  Zillow, trulia, realtor.com, redifin, hubzu, homepath, a and a slew of others. Check out the resources page of BP for some more.
• MLS: Unless you already have access get with a realtor that understands the investor mindset and is willing to work with you.
• Meetup.com- get with your local real estate investment groups.  Networking is very key.
• Local auctions and online auctions.

Here's the key. You need to figure out how you want to enter the market. Do you want to do SFR's, multis, low income, commercial, or other kinds? Once you figure that out, you need to research the heck out of the area you're trying to get in. Does your method of investing fit into your market. If not, then you need to A: switch markets or B: switch your strategy. If there's one thing i've learned is that real estate investing doesn't happen over night. It will take time, but once you get rolling it tends to grow exponentially.

I wish you the best of luck finding deals and if you need anything else, PM me and we'll chat!

-Drew

Love this strategy.  We're using this with section 8 properties. Buy a wicked cheap property, fix it up to S8 standards. Rent it (and the rent is great for S8 in our market), pass it off to a management company to handle the tennants, refi, move forward.  Fantastic!

I have some questions pertaining section 8 in san antonio. Particularly in regards to rent and how to use the FMRs To determine rent i should charge for a property. if anyone has info on this or where I can find out I would greatly appreciate it. 

Hi BP-

So I've been tossing this idea around for quite some time now and I'd like fo you guys to poke holes in it/educate me if I've missed something.  Here it goes.

I'm planning on going into section 8 as a method of passive income.  Here's my strategy.

1. Purchase property <45K cash. Plenty available where I am buying, plenty of demand.

2. Fix - Rent via S8.

3. In the location I am looking to purchase "Average" S8 rent is 1100/month

4. Here's where my plan may be flawed, but I've never tried this so please educate me. Take a HELOC out and use to pay cash for next S8 home ensuring payment is 1/2 of S8 rent coming in. From what I understand a HELOC is 70-80% of the appraised value, the home's I am looking at purchasing need work and appraise for 20-30K more than I'll pay. So that puts some additional cash in my pocket.

5. Repeat. Is there a limit to how many HELOCs I can have? What if i paid cash for the home and placed the home under an LLC? Is it harder to get a HELOC if the home is under an LLC?

So what do you think from a 30,000 foot view.  Would it work?   Thanks guys. You rock!

So what I do when I look at a property is this-

Find the property I am interested in-  If this is a "normal" rental (not low income/section 8) I try to find a home with some built in equity (who doesn't?!)

I then look at the area and see if there are similar homes for rent in that neighborhood. I use zillow/call rental signs/ craigslist or call my realtor.

I then calculate the mortgage, taxes, and insurance costs

Factor in repair costs. 

Ananlyze the data and determine the rental amount based off comparables.  A lot of factors come into how much you should rent  your house out for.  The question I always ask myself (with anything I pay money for) what is the benefit I get for spending that extra dollar? For a person who wants to rent your house, this may be a question they ask themselves, so why would they rent your home over the others in the area? What is your advantage and what are you willing to accept for that advantage?

So an example would be something like this:

House size - 2400 sqft 4bd/2ba

Cost - $160,000 (Assuming Closing costs rolled into loan)

Taxes- $3200/yr

Insurance - $800/yr

20%down @ 30 years w/4.5% interest rate - PITI = ~ $1144.00

Comparables are between 1300-1500 for home with similar size and location

I would look at this and say sweet I could net $356 a month if I'm at the high end of the rental market! But am I? At that point you have to factor in your advantages. Is the home in a "better location" than the other homes, does it have upgrades in it that would make it more appealing or warrant higher paying renters? What kind of market are you appealing to is really what you're looking to answer.  At that point, you can make your decision and based on what you decide can determine if it is something you want to get into.  Is making 200$ a month cash flow worth it? Maybe.. maybe not.  Does it come close to the 2% rule? It's tough to come to a conclusion and you need to be wary of analysis paralysis.  Inaction can kill ya.

I would suggest reading up on some more information on this site and maybe some books to see what other options you may have.  There's a ton of great info out there!  That being said I'll leave this link right here for you to check out if you'd like.

http://www.biggerpockets.com/renewsblog/2010/06/30/introduction-to-real-estate-analysis-investing/

I wish you the best of luck and if you have more questions... ask them!!

-Drew

Hi All-

Starting to get ready to move to San Antonio and I am beginning my research into the San Antonio Area.  I am certainly not familiar with this city so I'm looking for some help.  I am looking into purchasing low income homes and going the Section 8 route.  I know that there is a demand for it down there and I know it can be tough work, but I've decided to go for it.  What I need to know is information about the low income areas.  I've been searching online to try and figure it out, but a crime map will only tell you so much.  Obviously the homes I am looking at will be in potentially run down/less than desireable areas... the key for me is to not be in the "go in that area and you get killed for being there" areas.  I've seen that San Antonio has a bit of a gang problem, so that is also a concern for me. So for lack of better phrasing, I need to know where the "good" low income areas are.. if any, and where I truly need to avoid going. 

As always, you input is appreciated!  Thank you.

-Drew

Raj that is a good point. I think right now it's going to be more of something nice to live in, however, i'm think that i'm conviced that i can find a deal that cash flows in that area based on the rental market i've seen so far.  I'll have to dig more but from what i've seen avg rental time on the market is 6 weeks with a 4/2 pulling between 1.4-1.6/mnth.  That in mind if i could find something around the 160/170 range i think i could make it work (though not significant cash flow but at least 150 a month.  I get what you're saying about the 4 plex, however with a baby on the way i don't know if mamma bear is 100% on board with that..

Thank Elizabeth.  How did you go about finding your short sales?

Hi all,

I'm looking for a little help.  I'm in the Military and about to PCS (move) to the San Antonio area.  I have about 4 months until I have to head that way and would like to purchase a home there prior to my arrival. My train of thought is this... I would like to find a solid deal on a 4bd 2bth home.  Something that has some built in equity so that when I move in next 4 years I have the option to sell or rent and make some decent profit/cash flow. 

I'm very handy in the home so a house that's a little beat up doesn't scare me.  Where should I look? I initially started with foreclosure properties, but it seems like they are being listed at the same price as "normal" properties!? So then I started my search for potential short sales, and I have no clue what I'm doing here. I'm trying to find some but I don't have  a solid vector on where to look.  I've found a few, but I have zero experience with shorts and don't know how much I can offer below the listing price.

I've got a realtor who claims he's a foreclosure expert and will "find the best deal" but all he's sending me is homes listing at exactly market..

So, where do I go from here? I would like to use my VA to finance the property and have already gotten pre-qualified through a lender, so I'm good to go there. Should I seek out a wholesaler? If so how do I find these folks? Google searches don't turn up much.

Any help is GREATLY appreciated, and as always, you guys rock.  Thanks!

-Drew

Hey all-

I'll be heading to San Antonio in the very near future and looking to start investing in Section 8 housing there.  I'm looking for some inputs as to the S8 market down there. Does anyone have experience renting through S8 and if so what are the rents you're receiving like and how strict is the S8 policy down there? Is there anything that I should be concerned with other than the typical concerns that come with S8 landlording?  As always, I appreciate your inputs!

-Drew