All Forum Posts by: Owen Hehmeyer

To be more specific, you need you need your total investment (purchase price, capital improvements, and holding costs) to be only 75% of the ARV (after repair value). In my experience, it is extremely difficult to find such deals (I've never managed that good), but not impossible according to the best on these forums. Good luck!

One that might flood, like all the others in Houston. City of Houston has a handy GIS tool that could come in handy.

https://mycity.houstontx.gov/h...

@Mariel Painter-Chapman

I have a downdraft vent and they really do not work well. Paying more for a downdraft is bad. Drop it. Option 1 is strange layout. The triangle is bad. Option 2 is the best kitchen layout. I think it is a pretty easy call. You can add light with attractive undercabinet lightning. Modern LEDs with 5000k are amazingly bright. I personally also like No 4 because I hate downdraft, but I think that is me. No 2 for the flip, not no 4.

I recommend the near north side. Land values are rising.

House hacking is probably the best way to get started. I'd keeping looking for duplexes. Or get a big three bedroom townhome and rent out the suite on the 1st floor. Redfin can search multifamily with a single click. 

Everybody has different financial goals and different financial resources, so be sure and read what I write through your own lens, but $700k is a lot of money for your first house. Good urban rentals are usually smaller homes, typically under 1800 SQFT, and typically 2 bedrooms are fewer. There is a good reason the unit mix in big developments is usually almost entirely 2 bedrooms and fewer. In general, the more expensive (nicer, bigger) the home, the higher the price to rent ratio. House hack is a great first step, but unless this $700k home is a duplex, I'd consider buying two $350k homes (or three 250k homes) instead. House hack one (rent a room out) and rent the other out. Also, a common second step, after the first house hack, is to move out of the house hack and retain it as a rental. Would it still be a good rental if you were not living there? The house you live in with your family is not really an investment, it's the place you live, and thinking about price-to-rent ratios is not needed. If this $700k is your longer term family home, go for it and don't look back. You've come to the right place if you've come to Bigger Pockets. 

Adam, thanks for posting. Since there doesn't seem to be any modern small multifamily available, I've thought maybe I should have it built. So cool to seeing you take the plunge. I investigated enough to learn the parking rules and was pleased to see your project has exactly (and no more) the amount of required parking spaces for the unit mix you've proposed. Looks like the architect knew the planning rules. You are also packing in the most square footage you can on that lot, another good economic decision. If you are willing to share, where is your lot and about how much did it cost? I ran numbers and I couldn't see how small multifamily could work on lots over $200,000. But they could work on lower cost Inner Loop locations (just not Heights or most of the west side). I think your concept would work better in the inner ring suburbs.

Given Texarkana's lack of tourism and large institutions, I think you are looking at the friends and family market. I'm from there, and the only time I ever stayed at a STR was for my wedding night, in those days it was a "bed and breakfast". Because homes in Texarkana are dirt cheap most people have an extra bedroom or a place to put up guests so even the friends and family market should be limited. I think an STR would need to offer something to people to tempt them from staying with their own relatives, and to me that means a pool, charm, entertaining, romantic, etc.. The STR needs to be the destination because there is no real destination in Texarkana. My wedding guests mostly stayed at the boring hotels on I-30, but a few of the more well-to-ones stayed at nice BnBs, but there were only like two in the whole city. Most of Texarkana has zero romantic appeal. I think if you can get that going, you might get a few folks, although right now they are mostly just driving to Hot Springs, Ozarks, etc.. Arkansas is just so beautiful it is hard for urban Texarkana to compete.

@Brian Nel I think you are right about increasing the number of units, but that could be done by building three 2000 sqft SFRs on a 5000 sqft lot or by building a 4-plex with four 1500 sqft units (both 6000 sqft). And yet we see only the 3-pack of 2000 sqft townhomes. My theory is that almost all builders are working for income, not capital gains, and so they build SFRs, which are easy to sell one at a time, to anybody. My theory is that the 4-plex would rent super easy, and that demand for the smaller, more affordable units, totally differentiated from everything else in the market, would be great, potentially even better than the bigger townhomes, but the sales outlet is only investors, and therefore less liquid and less profitable to sell in the short term. It is really a build-rent-hold model, which doesn't suit the investor profile building out Houston. Some Biggerpockets small time folks should try it. 

There seem to be two kinds of modern era (1980+) housing inside the loop:

1) mega complexes big enough to have on site management (these are the piles of apartments on top of parking garages that all look the same and have bland names)

2) Single family homes (these days, mostly three stories -- and they usually look the same -- garage on bottom, open on two, beds on three, all wrapped inside a Hardiplank shell)

Is it not possible to profitability build 2-4 unit buildings? There used to be duplexes and 4-plexes, but all the fourplexes in Montrose are old. . . all the duplexes in the Heights are old. I would love to own a 2-4 plex of modern-ish vintage, but they almost don't exist. Instead I own two units inside the same large complex. If I bought land and built my own 4 plex, could that make money? Since everyone just puts up more townhomes, I assume not. . . But for someone who wanted to build-rent-hold instead of build-sell, why not build a fourplex instead of subdivide into yet another 3-pack of townhomes on a 5k city lot?