All Forum Posts by: Kathleen Heine

Hi Hector,

We have a duplex in Commerce a bike ride away from campus. The hard thing with commerce is the property taxes are higher and some areas aren't that great. I would say our tenants so far have been a mix between students and local families. I definitely see a lot of growth in the future as the university has been pouring money into infrastructure on campus and student housing as well as you said the D1 status. Hope this is helpful!

Kathleen

@Sean Byrd Hello, I currently live in Lone Oak. It's a wonderful tiny community, lower SES and there are parts of the area with higher crime/drugs, but for the most part it's a nice blue collar area. The school district draws a lot of people because the schools in the neighboring larger towns aren't very good. L3 is a large employer in Greenville and it's not uncommon for families to move out here to get into the school district. My dad and I are actually putting in a really nice development right now in Lone Oak ISD (technically Greenville address).I'm guessing you're buying the new construction 4 plex they recently built. Congrats! Feel free to shoot me a message if you have any questions, I'll be happy to help if I can.

Kathleen

@Lisa Laterza

Hi Lisa, I live about 20 minutes from there and would be interested in buying. Let me know what you decide!

Thanks,

Kathleen

Hello,

I'm hoping someone can help me a bit. I've been working a lead for over a year now and I finally have a little traction. I'm trying to analyze a small apartment complex that is mom and pop owned. 18 units 9 1 bedrooms and 9 2 bedrooms. So far, the utilities have not been submetered. The owner told me she got a quote a few years ago and it was going to cost $100,000.00. I really won't know until due diligence. Their accountant sent me an excel spreadsheet showing me the profit/loss for the apartments. In 2018 they didn't make anything off of them. The utilities alone were around $50,000.00/yr. The owner told me she's been using funds from the apartments to pay for her mom who is in a retirement home. The accountant didn't delineate any of these expenses so it's hard to know what all was included in the utilities etc.  I know how much insurance would cost and I know how much taxes are. I have a good idea of what the units will rent for once they are fixed up and utilities submetered, but my question is how would you come up with the first offer? Based on paper they aren't worth much, but obviously the buildings are worth something and it's mostly rented right now. I appreciate any feedback on you would look at this potential deal!!

Thanks, 

Kathleen

@Andrew Postell I appreciate your response. I think that's the biggest thing I was missing... basically there's a price point where BRRR doesn't make sense - perhaps that should've been a no brainer! We have 1 duplex that was a perfect brrr. We've done a few flips and we were able to pay more for them as flips than if they were brrrs. Finding a good BRRR has proved extremely difficult with so much competition. We've found a niche with higher priced flips because there's been less competition so far, but we really want long term rentals. We've basically adjusted our focus to doing flips and saving our cash for rentals when the market changes unless we find something sooner. We're located 1 hr NE of Dallas. Thanks again!

I keep hearing on the podcast that you can pay more for a BRRR property than a flipper can and I'm trying to understand this. I just closed on a foreclosure. The house is a 4/3 built in 2008 and only needs cosmetic work (10-20k), paid $224k. At most it could rent for $2100 but closer to $1800 is fair for the area. There's currently 3 houses in the neighborhood for lease (2 for $1800, 1 for $2100 similar sizes) and they've all been sitting for awhile. The ARV on this house is 340k. When I run the numbers with property taxes, repairs, cap ex etc brrring doesn't even seem like a possibility unless I leave a ton of money in it. Am I missing something?!? I appreciate any advise!

Hi Justin, 

We currently have a duplex in commerce (3/2; 2/1). We don't rent by the room mainly because we've had a hard time with property managers being willing to do that. It's normally roommates or couples so far. The vacancy rate has been higher than we anticipated but overall our duplex was a great deal. I've heard of other investors doing what you're wanting to. A couple have brought in modular homes and have them setup to rent by the room. I've heard it does really well, but I dont have direct experience. Please keep me posted - I'd love to hear how it goes! 

Kathleen

No problem! I think it depends on what you're looking for as well. I wouldn't think right now is the best time to buy for appreciation. We've seen several flips in the area and those investors seem to be able to pay a little more than buy and hold investors because the cashflow and return isn't there, but it all depends on what you're looking for and what you want your numbers to be. Local buy and hold investors are sitting back and waiting for the most part right now. 

I've grown up around Greenville and my dad has over 100 rentals in the area.  As is everywhere the market is hot and getting fairly competitive, but there's still deals to be made if you're diligent. I'm interested to hear what others think about Sherman. 

McKinney is booming and Princeton has certainly benefitted from it. For those looking to get out of the city but remain close to downtown McKinney, it's a great area. While I do think the area will continue to appreciate we do seem to be near a peak. Just my 2 cents, but I'd love to hear what others think.