All Forum Posts by: Mat Trenchard

I think @Cory LaChance has a little more direct experience than me down there. I've got one wholetail currently on the market (2 showings in last 5 days, 220k price point) and one flip on the market (180k price point, 1 offer but financing fell through). I would run rent comps and drop that number by about 50-100 per month to be safe AND make sure your properties are going to look nicer than everything else on the market. Feel free to reach out and I'll be happy to keep you posted on the progress of my current ones if that helps at all. 

@Daisy Ferreiras Beautiful. Good luck!

Once you have both contracts signed make sure you are checking in with the three major parties at least weekly (seller, title, and buyer). Take control of the transaction. If title is waiting on something from the seller, don't wait for title, call the seller and offer to walk them through whatever paperwork is needed. If title doesn't have lender contact info from the buyer, call the buyer and get the lender contact info. We dig into every detail of the transaction so that we can prevent last minute surprises. Nothing worse than title calling the day before closing saying "Hey we haven't heard from your buyer in 2 weeks".

On the "you keep it" thought - Have you already figured out how to finance? Are you going to use Hard or Private Money and refi? Have you been pre qualified with the short term lender AND the long term lender? If not, I would start there. If so then make sure you have your turn around plan ready to execute (contractors lined up, any occupants dealt with, etc). 

I think this is personal to each investor and their situation. I keep about 2 months of PITI plus a few thousand bucks in for anything that pops up. If we are in acquisition mode, we'll have a little more in case we need to make deposits to lock deals up quickly. Every blue moon something will pop up and we'll refill the coffers. There's not wrong way to do it man. Do what makes you comfortable and let's you sleep at night. If you find yourself always adding cash to the rental bank account, maybe up the holding.

I think the two go hand in hand. The more people are trying to wholesale, the more you will see a "lack" of rehabbers and an "increase" in buy and hold guys. @Trey Watson pointed it out too that it's so easy to get into wholesaling it's becoming increasingly flooded in the market. A buy and hold investor will pay a lot more for a property than a rehabber will, every time. When there's more wholesalers out there trying to move properties, then more property will move to the buy and hold guys naturally because there won't be any deals for flips. We are still looking for more flips every day in our business which presents a challenge with the amount of wholesalers in the market today. If you're a wholesaler in Houston and come across flips you are trying to move, send them my way! I'm not going to pay 80% of the ARV though like a buy and hold guy will (which speaks into exactly why wholesalers are just selling buy and holds all the time). I'm seeing more and more people getting properties under contract at 75-80% ARV and moving the deals the landlords who aren't concerned with equity. Even so, there are still plenty of deals to go around.

Hey guys, 

It is very possible to get 1.2% in the Houston market. The best way to do that is going to be either A) sourcing your own off market deals or B) buying from professional wholesalers (keyword professional). The MLS is a very very tough arena to find those kinds of deals in Houston. I'm not saying it can't be done, because it can, but bet on making 50+ plus offers before you get close on one. While not every deal we wholesale will meet the 1.2%, we will be at 1.1%+ (I've got one at 1.16 right now), we do sell a good deal at 1.2%+. You will always find the best deals if you source them yourselves, but good wholesalers will be able to bring you good deals as well. I wouldn't say there are some areas over others because we have locked these deals up all over the town, it just depends on the situation.

Hope this helps some. 

Thanks for all the responses!

@bill 

@Bill Exeter the Assignment Contract assigns our rights in the purchase and sale contract we have with the original seller. In this scenario, we would not take title. We would basically sell our rights to the original contract to the end buyer for a fee. I hope that clarifies your question. 

I think we are going to double close on this transaction to avoid any hiccups at this point. Thanks again for the help!

Hey All,

I've got a buyer on one of our deals that wants to use a 1031 exchange to buy from us. He'll be buying via an assignment contract. I don't believe this would be an issue, but I wanted to put it out there to see if anyone has experience with it. 

Thanks ahead of time.

Hi Oommen,

Welcome to BP! This is a great forum with tons of information. Get in and ask a lot of questions. We rehab and wholesale in the Houston market. I'd be happy to be a resource for you if you need help with anything. At the very least, you can add me to your buyers list. All the best.

Hey @Jacob Wohlgemuth,

I've looked into this myself in depth. As @Trevor Eweneluded to, you need to be sure you're covered insurance wise. I'm only familiar with this in the Texas market so take it for what it is worth. There is a difference between a "Half-Way" house and a "Sober Living Community". The former requires state licensing, licensed chemical dependency counselors on staff, etc. A sober living community is more just a house where the residents self govern. Obviously being licensed, a half-way house can charge more per bed. Here are the big issues that I ran into, which ultimately kept me from pulling the trigger at the time (not to say I won't revisit). You need to spend a lot of time networking at rehab facilities, counselor's offices, etc. because you are constantly turning beds. You would at least need to hire a full time manager/director if you are not planning on doing this yourself. The average stay per bed was between 2-3 months. So let's say you turned a 4 bedroom house into a 8-11 bed facility, you are turning each bed 4-5 times a year....better have a solid pipeline. Also, in my market to be competitive the houses need to be furnished (and not with crappy stuff from the side of the road), and you need to at least provide dinners during the week (which presents it's own logistic difficulties and cost difficulties). When I started putting numbers to paper, it looked like I was going to need at least 3 houses with at least 8 beds each for it to make sense. The main issue for me was the time management, this was something I was looking into for a relatively passive investment and it became clear that was not going to happen, especially at the beginning. That was my experience looking into it as a business, not to say it can't be done because it absolutely can be. It just wasn't something I had the time to dedicate to. Feel free to reach out to me and I can discuss in more detail with you.