All Forum Posts by: Sandeep S.

We shouldn't be so harsh on Ben.  Poor guy already is so upset about all the real estate wealth we Californians are enjoying.  

And I absolutely agree with Ben's analysis - especially looking at myself accumulating ton of wealth in the last 5 years. Although one wonders that when it is a "fact" that even brainless people can make easy money in the SF market, wouldn't one be even more stupid to know this fact and still not come and invest in the SF market?

Thanks @Amit M. for sending that pointer. It sure has some serious food for thought and even more entertainment! The discussion there is particularly relevant to me as I have been (and still am) a California investor who is lately investing in Texas.

70% of that thread is full of BS (relating to weather, lakes, immigrants and so on). It may not be BS but has little to do with investing. (btw - I love to live in California ;)

Here are my takeaways and point of views (relating to my investments):

- I believe one can make (or lose) money in almost any market. It is really about knowing the local market, buying right and zillion other factors that go into making something a good investment. I am sure that there would have been tons of people who lost their shirt investing in California during the last decade.

- I love California (esp. bay area) fundamentals for appreciation (both values as well as rents). That is why I am not selling any of my local investments to buy in Texas. It is however true that I am not actively buying any more in CA either.

- Instead of selling, I am taking *some* of the equity out of the massive appreciation my CA investments have had in last 4 years, and deploying that in Texas market. This is very different from the OP of the other thread.

- I have a specific investment strategy for which I have found Houston to be perfect market to try out. Given that I am just 6 months into it - it is too early to tell whether it's working or not. But so far, knock on wood, pieces are falling in place. And it is entirely possible that I may have underestimated some of the expenses, esp. the foundation issues that may arise in future. I have some margin for error, but if foundations of all my properties start shifting in exactly 12 months while the next hurricane is busy taking all the roofs out- I haven't planned for that much error! Bottom line - there are risks. But that is natural for any investing. And I have plan B, and then a plan C.

- Again, I have nothing against CA market. I bought as many properties I could possibly buy in the last 5 years here in Hayward. But for my buy-and-hold-forever-for-cash-flow kind of strategy - there are not any local options left. I sometimes wish that the 2009-2011 kind of prices hung around few more years ;). And then I am not as creative as many of you to be able to add significant value to a local property. And my full-time day job is not very helpful that way...

Summary: Out-of-state investing has many additional risks than investing in your backyard. And CAP rates, as advertised for mid-west or south, rarely turn out that way in reality. So one needs to proceed cautiously (with lots of margin for error).

@Lucas Bonasio - curious to find out where did you end up financing? Or are you still looking?

I am also in somewhat similar state as you (also in TX). PM me if you prefer to share details there.

Old thread but it had some very useful info. I am also building a buy-and-hold portfolio in Houston, TX. I have already exhausted my conventional loan options and looking for portfolio or commercial financing for my cash-purchased SFRs.

@Gunnar Teltow , @Daren H. - could you pls. share info of your banks and if you think they would do cash-out re-finance on investment SFR in Houston?

Thanks!

Thanks a lot @Johnson H. for organizing the meetup. It was great to meet so many RE investors and it was also a fun evening.

A big thanks to @Kathryn M. for the carpool! (I do not enjoy driving in the city at all)

J. Martin - your dedication towards detailed posts and meetups is very admirable. We should definitely chat some more next time (and I forgot to buy the slinky :(

@Amit M. - I wanted to chat more with you but as someone said - you are always in high demand in these meetups! Next time..

Sorry that I couldn't make to the San Jose meetup on Friday. I am sure it must have been great too.

Thanks @Leigh Ann Smith

I just wanted to update this thread with what happened to my purchase of the property. I did a lot of comps and analysis and was convinced that I would get $1400 rent as worst case. And given that I was just starting out in Houston (this was 2nd property for me) - I went ahead with the purchase. The bank took 2 months to sort out some title issues and the property closed in late March. I also got to finally see the property during my trip to Houston in early April!

The rehab came to just about $10K as budgeted. And the place got rented within a week at my asking price of $1500 (actually $1495)!

It may not be the best of the deals - but it met my expectations and fits well in my strategy. Being out-of-state, compared to the alternative of buying turnkey, I feel much better creating my portfolio this way. There are some additional risks, but rewards make it worth the risk.

Thanks @Waylon Themer. I am working with two PM companies (on separate properties) to see which one will work best for the long term for larger scale. I bought couple more properties after we last interacted. I will send you details in a separate email. And we should certainly meet up next time I am there.

(and I am still working on getting that perfect commercial loan for my holdings!)

@Johnson H.

Yes, being out of state has its own set of challenges. And one needs to create whole team on the ground - piece by piece. The way I approached it was to buy one property and then create systems and infrastructure around it (instead of the other way). I did buy cash making some of the deals possible. My plan is to buy cash (from HELOC against my primary home) and then do cash out re-finance.

I hope to make it to the meetup too this Thursday. We can chat more there. See you there.

Thanks @J. Martin for including me.

I, for now, am focusing on SFH in Houston. I have been buying foreclosures in the North Houston market in the last ~6 months. Coming from California - numbers look especially good :)

I may look for multi-family in future but the current plan is to scale up the SFR side of it. Financing multiple SFRs is a challenge (compared to large multi-family) and that's what I am focusing on currently.