All Forum Posts by: Nicholas Welch

Okay hey y'all, this is gonna be a super short post just because I've noticed a lot of discussions lately where people talk about finding FSBO properties through all the normal mediums. However, those of us in Houston (I'm sure this must exist elsewhere but I don't honestly know) have a huge tool at our disposal that I don't see enough people talking about: HAR. If you go to HAR and search for the given types of property you are looking for, you can add in the filter of what type of financing the property accepts, and Owner Finance is one of the options you can check. From there, you can simply email the listing agents and find out if that is in fact accurate (I haven't yet seen a circumstance where it wasn't, but always good to ask) and to get the terms they're offering. They usually... Really suck, like wanting 40% down and 12% interest kind of suck, but there are a solid number that are pretty decent as far as what they're looking for. And remember, you can always refinance out of these deals, the main use of these is just for that foot in the door! As of right now, I think I have the terms of somewhere around 10-15 properties in the Houston area sitting in my inbox, ready for me to pounce on if ever I have the ability and desire. Super neat, super cool, go forth and do awesome things!

Honestly I'm not even worried about value add, the property is, from an aesthetic perspective, in phenomenal shape, and anything on the internal/infrastructural side of things does certainly remain to be seen. I was just asking if anybody has seen homes that appraise for below tax assessed value, as I personally have never seen a situation where there wasn't a decently large discrepancy between the two, with appraisal sitting much higher.  

Hey everyone, back again already! Has anybody ever had a home appraise for below the tax assessment amount? Typically there's a pretty big discrepancy, but it's typically one that goes in the opposite direction (tax assessed is way under market value). I ask because I found a house that's selling for 100k less than tax assessed value (MLS, normal house, great condition) and am wondering if I'm most likely walking into a sweet equity deal, or if there's some more nuance y'all have fun into. Thanks in advance for any responses you have!

I found this property just on HAR, I was browsing through properties in the area and decided to take a look at multifamilies (and as you probably know, I didn't exactly have a lot to sift through) and I found the place. It's definitely not the kind of place you could force massive amounts of appreciation into, but it fits such a textbook case of househacking that I wanted to talk about it. I've absolutely seen that some lenders can do that, and FHA guidelines allow it too which makes it even better, but pulling the trigger on the property would still be very difficult for me right now due to credit issues—if I had even 2 more months I'd be singing a different song, but alas.

Hey everyone! I've been inactive on this forum for quite a while now, but wanted to stop by with a recent update on some happenings in the areas that I'm looking at.

So... What's the property like? Hoo-boy, it's a pretty nice place. Anybody who lives in the Houston area knows that our multifamily market, to put it kindly, sucks. Outside of Houston Proper (where a lot of the multifamily is overpriced, in an awful area, or both), finding cash-flowing multifamily rentals can feel like a sisyphean task. Recently, I saw a multi-family come on the market in the Spring area (where I will soon be moving), and wanted to give some of y'all an idea of what kind of stuff is still around, even if it only comes up once in a blue moon.

The numbers:

It's a fourplex, as previously mentioned, that is priced at 374,000. Three of the units are presently rented out, and while the rent isn't provided in the listing, it's safe to assume the rents are likely around the $1,000 to $1,300 range based upon comps in the area (I would personally assume on the lower end, but I could so very easily be wrong). 3 of the 4 units are rented out, with the fourth being purposefully left open in the case somebody wants to owner-occupy (how smart!). Again, as we all know, property taxes in Texas are brutal, with this given property having a rate of just under 3.2% (OUCH), meaning they paid just shy of $7,400 in taxes in 2019. However, even despite this, the property still has the capacity to cashflow rather decently, depending on the owner-occupancy situation. A modest couple-hundred dollar cash flow is possible with low maintenance, self-managing, etc. etc. for the owner occupant among us, but if all four units are rented out, a cash flow exceeding $1,000/month is more than possible. On top of that, with consideration of mortgage interest tax deductions, appreciation in the market (which as The Woodlands becomes more expensive and people move away as WFH increases, this may end up being significant), and the ability to increase rents to a certain degree with updates to the units, this is the kind of property that could be a very stable, if not insanely profitable, investment.

Why am I posting this? Well, I know for me personally, I often get very frustrated by the market that I live within, as the classic "buy a multifamily and rent out the other units" style of househacking is incredibly hard to find. Now then... What will I be doing with this listing? Well, as much as I wish I could say I'm planning on purchasing the property, it unfortunately isn't in my financial cards at this time (Debt to Income isn't quite good enough, and credit score could use some work as well), so I will unfortunately have to let this beautiful beast pass me by. However, if anybody on this forum is interested in the property, or interested in helping me find financing for it (which would be mighty cool of you), I'd be more than happy to provide those details in a message or in another conversation. Thanks so much for reading, and stay safe out there y'all!

Hey all! My name is Nicholas Welch, and I'm a 21-year old from a city called Katy out here west of Houston, Texas. This actually isn't my first post on this forum (I believe it's my third!), but I figured I should definitely make this post anyways! 

My current goal is getting my finances in a much stronger position, meaning all of my active working capital is going towards loan and other debt paydown (student loans, credit cards, etc.). I want to get into real estate investing as soon as humanly possible, but I recognize that it's in my best interest to get my finances in order before I try to pick up any more debt commitments. 

My goal on this forum is simply to connect with others, share what little knowledge I have (I'm a huge numbers guy, so I'm doing my best to bolster my capabilities there), and pick up knowledge from others as well. I'd love to one day be able to find some individuals to work with on deals, with my ideal type being one where I'm the partner that handles the project/property management, being the one who deals with all of the day-to-day annoyances since I have so little monetary capital to offer.

As of right now, my market focus is on all of West Houston (Katy, Cypress, Magnolia, Tomball, Sugar Land, etc.), and I primarily look at REO properties due to the inherent extra room for cash flow with their lower prices. I'd love to get into smaller multi-family investments, but will likely start with SFH due to the multi-family market being so very weak over here. I typically look at 20-30 properties per day, and analyze the numbers on 5-10 (I've reached the point where I can get a pretty solid rough estimate of cash flow without the usage of any calculators, which was a big step for me!), and I'm hoping that market knowledge will help me once I'm able to actually pull the trigger on this whole thing.

To conclude, thank you so much to whoever ends up reading this! I'm always seeking out advice and people to speak with, and I'm also always willing to give my own advice/assistance whenever it's possible. If anybody ever wants to connect with me on here, never hesitate to reach out!

Seems as though it's simply a flip to them from what the agent had to say. They bought it at 107k, so most likely a foreclosure, fixed it up to be a more palatable property, and then decided they wanted to sell it off. Simply put, they don't see it as a buy-and-hold, or don't think it's worth their time and effort to rehab in order to start collecting rent. 

Hey y'all! My name is Nick Welch, and I'm looking to get started in real estate (aren't we all?). I'm posting here because I reached a bit of an irritating impasse, and was wondering if any of the far more experienced and intelligent members of the board could help me with my little dilemma!

Here's the basic situation: I found a property not too far from where I live that seems like a really solid bet—4plex, all 4 units are 2/1 and the building has a new foundation, roof, and various cosmetic fixes done on the outside of the property. The asking price is 215k, but considering they bought it for 107k earlier this year and themselves recognize that the units need quite a bit of updating and rehabbing, that price is likely flexible. Based on comps in the area, reasonable rents for each of the units (900 sqft each) is somewhere between $750 and $800. 

So what's the issue? I have no idea how to fund this! The main roadblock is that I'm under lease at an apartment complex until April of 2021, so any sort of owner-occupied loan is unfortunately out of the question. I don't have the capital (nor the credit, unfortunately, but this is being mended as rapidly as is possible) to do a conventional 20% down mortgage, and so I've been trying to figure out ways to make this deal work. Assuming the units wouldn't be rented out until rehabbing was completed, there'd likely be at least a few months that the property wasn't cashflowing at all until I could get the first unit fixed up and occupied. Those holding costs would hurt rather bad, as my W-2 income could barely sustain the types of loans I've thought of thus far (for both private and HML, I'd be paying well over $1,000 in interest alone every month) since I'm having to also pay rent at my apartment complex and other miscellaneous expenses.

If I have to pass this deal up, it's by no means the end of the world, and I can at the very least say that I've learned a decent amount about a new market through analyzing this deal and researching ways to possibly make it work. If anybody has any advice they can give me, or show me where I led myself in the wrong direction, I'd massively appreciate that! 

@Marcial Pimentel I think you're absolutely on the right track in the Katy market. As many others have noted, SFH in Katy can be rather difficult to cash flow with due to the high (and continually elevating) purchase prices (though, of course, such appreciation is a great thing once you own!). Keeping your all-in costs under $200k is a fantastic goal, and I'd even say if you can keep it under $180k or so you'd be very well off. Some of the RE "rules of thumb" are nigh-unachievable in the SFH market around here, but that doesn't mean you can't get good cash flow, you just might have to be creative with how you do so!

There are many people involved in this thread that are far more educated and intelligent than myself, but one strategy I'd highly recommend is closely monitoring REO/Foreclosure Auction listings on the MLS/Auction sites. Many of these properties in Katy are rather minorly distressed (not the kind of rehab that would likely kill your bottom dollar), and are rather solid for the price point. As an example, there's a current foreclosure for sale over here for 101,000, and due to it being an REO, likely has some room to be negotiated down in price based upon property inspections and rehab costs needed. As others mentioned, staying north of I-10 is likely in your best interest, as our home prices are far less inflated (generally) than you'll see on the South side near Cinco/Seven Lakes/Tompkins areas.

As another thing to simply mention, just as you said, our multifamily market sucks pretty bad out here. I remember being surprised when I'd listen to the BP podcast and hear about how rich these other markets are in Du/Tri/Fourplexes, when there are all of 4 on sale at any one time in the entire greater Katy area. One thing I'd say with that, though, is that there *are* some markets that are much stronger in that regard (and some markets that have some great deals regardless) that aren't too terribly far away, if you're willing to invest a little out of the way. The market further west of us has some really strong contenders, but since you're looking at living in your first property, that'd likely be a poor idea given where you work. However, once you have your feet under you in that first property, take a look at these other markets! You may find a great deal you can't pass up. Cheers!