All Forum Posts by: Tony Valdivia

One of the keys to the real estate game is putting together your best team. With that said, developing a relationship with quality contractors can be the most challenging part. So, I thought I'd share my take on contractors I've dealt with. Feel free to share your contractor feedback.

In Houston:

GC - Elijah Randall, Fast Track Remodeling - Highly Recommend

Plumber - Texas Master Plumbers - Recommend

In San Antonio:

GC - Tim and Melody Patrick, Forty Degrees North - Avoid

GC - Carlos Sanchez, Alamo Residential Solutions - Avoid

Plumber - David - JD Plumbing - Recommend

Operating in both Houston and San Antonio for complete HVAC change outs:

SA Specialties - Recommend

Hi Mike,

I have lived in the Katy area and know this area well. I have a couple of rental properties still out in the Katy area and am still hunting for additional deals myself. Unfortunately properties like this that you find on har.com rarely end up being good deals because they get bid up to a point where it's no longer a good deal. You're going to have to find these properties before they hit the mls to be good deals.  Also, you may want to consider getting properties that meet your quick and dirty math under contract first and then do your deep dive during your option period. When you do find a great deal, I'd be happy to share my contractor, real estate agent and stager with you. Best of luck. 

That's great appreciation and looks like it will provide great cash flow for you.  One thing you may also want to check into is the tax consequences when you do decide to sell this property.  If it has been your primary residence for at least 2 of the last 5 years, you shouldn't have to pay any capital gains tax (consult your tax accountant).

The other thing that may be interesting is to calculate your returns on this property as a rental compared to the potential returns if you deployed your capital into other investments.  You could also look at the potential of doing a cash out refi, to redeploy the excess capital (make sure the unit would still be cash flow property).  Lots of options to consider and Midtown is a great location.  Take your time and analyze all the angles and what is most important to you and your family.

Your goals, your current financial position and what you value most will help dictate what you should do.  As an outsider, we all will have our opinions based on our personal biases and I would encourage you to explore all the available pros and cons of the multitude of strategies you could employ.  Good luck with your decision.

Hi @Dennis Rodriguez and @Mark Nolan

 Thanks for the advice on the self directed retirement accounts.  Just out of curiosity, what is the typical rate paid out to these type of investors?  Also, what is the they typical length of the investment these type of investors are looking for?

@Bryan Hancock

The speed in which I need to make the purchase is dependent on the circumstances of the deal.  Some we may need to close in just under 2 weeks and others we have much longer.  It wasn't until recently that we've had multiple deals at once be we are ramping up.  The purchase price on the deals we have done range from $50K up to $215K.  Mostly we are around the $100K price point.  Current net worth is just north of $300K (but growing).

Assuming I qualify for a large enough line of credit, if I use the line to purchase a property and cover rehab costs, would there be issues trying finance the property.  Since the line of credit isn't a loan against the property, the refi would then be a cash out refi and would that require seasoning for a conventional loan?  Also, if you have a large draw against the line, would that hurt your credit score since the credit utilization would be extremely high?  The other thing I worry about is getting dinged on the debt to income ratio, as personal credit lines have shorter payback schedules than mortgages and therefore higher monthly payments.  I'll have to start tracking down the answers to these questions.

I have currently been using hard money lenders for most of my deals, but am looking for a cheaper source of funds.  I operate in the Houston area (with properties in Katy and Richmond) and in the San Antonio area.  The hard money lenders I am currently working with are charging 12% with 2 points.  I did find a San Antonio bank that has much better rates, but they need 30 days to close and sometimes I need to close quicker.

In my business model, I buy with a hard money loan, do the rehab and then rent it out while refinancing with a conventional loan.  Occasionally, I might flip a property instead of rent it.

Any advice on alternative sources of funding and how to find them would be appreciated.