All Forum Posts by: Tyron McDaniel

In Houston and many large cities it’s quite difficult to find new or recently constructed small multi family units so we build our own!

This is a duplex where on unit will be rented to a long term tenant and the other will be rented via AirBNB.

I'm not an architect but I really wish I was simply because I love design... but my best advice is to read what NIK said... Mannn he laid it ALL out, so I will end my comment there! What Nik said! 

Like the other poster said, you may have to fix some of the work already completed and along with getting any exposed wood treated. The flipside is you may be able to get it deeply discounted or even take over the deal subject to provided you can prove to the existing lender you can complete the project rather quickly! 

Cash flow is fair the challenge for me on this deal is there is little catalyst for appreciation growth and in my opinion you aren't getting a good enough price to warrant the work and risk involved. 

As for your 2nd question about buying a duplex/sfr in a better area I wouldn't buy that one either at that price!

I like deep discounted properties in need of repairs that allow for forced appreciation. 

I too employ this strategy however we invest in the areas that are currently the hood but are on the cusp of being gentrified so that as we hold these properties the appreciation kicks in strong over time while dealing with the nuances of owning this type of real estate. 

House hacking via a small multi family is the in my opinion one of the BEST ways to get started investing in real estate! 

Katy is a pretty strong sub-market so I think you will be fine and the house looks good! What's more important in my opinion is your pricing strategy; regardless of who or how it's listed, if you price it wrong (too high) it will sit. 

Most people in Houston buy and/or rent based on proximity to where they work and/or attend to school otherwise they spend 30-45 minutes commuting each way. I would say the areas surrounding downtown Houston are going to be ideal in many cases as there will be homes with garage apartments, duplexes and triplexes to choose from. Depending on your overall budget and equity capture goals any number of areas may work, but check out 2nd Ward or what is now called Eado, the Near Northside is another up and coming area where some good opportunities can be found and you should also consider 3rd Ward & 5th Ward if you are value minded. 

If you have fair credit, verifiable rental history and consistent income you can easily secure FHA financing in Houston and the inner city is the ideal place to house hack because of it's proximity to all the cool and trendy places downtown along with the major universities and Med Center. You should do well.

We like many investors LOVE flipping deals for the BIG checks or wholesaling deals for the FAST checks but I can honestly tell you the deals that I most get PUMPED about right now are Buy & Hold deals! Most gurus don't talk about them much and most investors look to it as the last thing to do with their money but I can honestly tell you that if you plan on being around real estate beyond this current BOOM cycle, you should consider the merits of having more rental units. The good ole days of tenants, toilets and taxes have become obsolete for savvy investors who now leverage systems, property managers and good home warranty's with deductibles to be paid by the renter for most repairs to minimize the management headaches! 

Ideally you want what we call a Bread & Butter property located in a solid community where rents (For Houston) range from $1000 to $1300 a month with pretty good schools and close proximity to the freeways, downtown and the working epicenters around the city. Sometimes you come across deals that are in great condition, require only lipstick and a little foundation work (all houses in Houston at some point need it) and are ready to go like this one. We paid more than what we would normally pay but the house is nicer than most we buy... 

ALL IN on this deal will be about $88k or so and we expect rent to be $1275 per month with about $45k in equity... a nice base hit that deal that will appreciate handsomely over the next 7-10 years (our projected hold period) and will provide a stable cash flow over that time frame! The average person could easily buy 6-10 properties similar to this in most markets in the US and build a substantial wealth generator for themselves without being a guru, quitting your job or having to figure out some complex strategy for doing real estate! 

Have a great day closing profitable deals guys & gals...

Tyron in Houston!