All Forum Posts by: Mason Moreland

Follow up question, can we talk through your financing strategy as well? Why are you eyeing high interest rate loans? Curious to hear what your plan is there.

"relatively inexpensive houses to cash flow well...also the properties would need to support a property manager."

I think this is where you may find your biggest issues. It's the classic "good, cheap, fast: pick two" problemTypically you can find decent management when you hit some scale (20+ units like an apartment complex or large local SFR portfolio), but it will be much harder to find good management for one or two properties in that class in Lubbock. Consider the increased maintenance and tenant issues you may face with C or D class homes in that price range. Not impossible though, so don't let it scare you off.

Lubbock does have pretty good cashflow. It was getting squeezed for a while there during CVD where prices shot up but rents were slower to follow. The rents have started to rise much more closely with the recent price gains erasing much or all of that trend which has been nice. 

We have done the best there with buy-and-hold new build rentals (LTR with one STR). Have also tried older/close to campus LTRs (targeted towards say grad students or more affluent students), and that has just been OK. Much more maintenance on the older one and cash flow was about the same.

Slightly better appreciation in the newer stuff, though the older stuff wasn't anything to sneeze at either.

Yeah that is a recipe to get screwed out of a commission and hard work, I’ve heard RE agents talk about that “bring a buyer first” line! 

If it’s an actual agricultural property and the buyer goes through Ag credit, expect more like 65% ltv (so 35% down payment).


If it’s truly a business, market it as such and the price should be based on the cashflow it generates. If it’s not, market it as a novelty home? 

Let me know if I can assist with any questions. In the wine industry here in Texas (mostly the vineyard/grower side).

Be wary of trusting .gov employees to give you accurate information, ask for maps of zoning, restrictions, etc. to verify. You will need to research chain of title to have an accurate idea of any easements or deed restrictions.

For flood zone mapping, check here: https://hazards-fema.maps.arcg...

Haha glad it is helpful. A regular old Ag loan isn't bad on paperwork, no worse than a residential loan, but the SBA loans are pretty paperwork heavy. They can be well worth it if the terms make sense though, we just finished up a refi with one recently.

I'm in Midland and own 4 doors here. No desire to own more. Live by the oilfield activity, die by the oilfield activity. We saw rents go from $2,900/mo to $1,600/mo without CVD19. You have to be able to buy where the price works in an oil crash to make sense here. Especially with lower-end houses sub-$300k, that is workforce housing and they dry up as soon as oilfield activity dips. The Sweet Spot for us here is LTRs in the $300-$400k range and nice STRs in good neighborhoods nearby amenities.

Some types of syndicated assets are treated differently as well. The rules of depreciation and who can take it against active income vs. who has to suspend it to use against future passive income is different in our vineyard development syndications (agricultural/farming rules apply).

Someone is syndicating or has syndicated acquisition/development of just about every business or property type there is, so keep that in mind when looking at deals. 

I would follow up on the Midland/Odessa mentions and agree it is a "one-horse town" here. Live by oil and gas activity, die by oil and gas activity. It is typically consistently good for STRs though. If you can buy at a price that works even during a crash-level rent drop then you can make hay on LTRs when times are good.

Lubbock and the area south/southwest of it is fantastic and appreciating fast. Look to Wolfforth and New Home areas to be in the "path of progress." Lubbock is also highly diversified being the hub for the area from Amarillo to Midland, Hobbs to Sweetwater for agriculture production and research (cotton, peanuts, sorghum, wheat, watermelons, and wine grape vineyards -70-80% of TX wine grape production comes from this area-), medical care and research (two top-tier facilities in Covenant and the university hospital), manufacturing, transport (major airport), and of course Texas Tech is a huge economic driver employing many thousands and bringing tons of students in with their parents money (30k+ enrollment I believe, it's enormous).

@Joseph Schommer

If you can buy the whole thing with a primary residential loan, do that. The terms will be significantly friendlier than an Ag credit loan (higher LTV, lower INT, longer AMMO). Some lenders will not lend on rural residences depending on their location, so keep that in mind and don't let a lender string you along for 30 days only to find that out at the end...

An SBA loan is also a possibility depending on farm type, your qualifications, and the price. They can have some pretty crazy good terms; 80-90% LTV, prime+ 2% INT, 20-30 yr AMMO. The downside is they can take 45+ days to get done sometimes and take a ton of paperwork on your end. If you do this, definitely go with an SBA preferred lender so you don't have to wait on SBA approval, too.

You can use an FCS institution if you can't get a standard primary residence loan or SBA loan. They do rural residence and farm loans. Typical terms would be 65% LTV, 10-20yr term (usually 15), prime+2%.

DM me if you run into any issues or need someone to bounce questions/ideas off of! Can also point you to some potential lenders to look into if you need some direction. We primarily deal with Ag development loans (buying land and developing/operating vineyards) here in TX but the process is similar across the spectrum of Ag.

That sounds like it's probably a sound decision @Ihor Kucheynyk!

Florida is one of the hardest states to deal with wetlands/waters in the South! They are everywhere, the Feds regulate them, the state regulates them, and localities also regulate them.