All Forum Posts by: Lukas Vanagaitis

@Kevin M. Do you think it is going to be hard and/or more expensive to find contractors in Houston? Will redevelopers have more delays on their projects due to high demand for labor? 

@Brittney Hughley

@Brittney Hughley - I have double feelings about Houston's market right now. I get a lot of great deals in Houston from wholesalers, 2-3 a day that are worth attention. But there are 185,000 houses that will need work some time soon! That's scary to me. Availability of contractors and their pricing are my biggest concerns. I am trying to figure out how latest events are going to affect the industry, because the numbers may change, such as holding and rehab costs.

Thanks guys for your input!

@Josh Wallace how did everything turn out? Did you buy anything in your local market / out of state? 

@Adam Huntahlers congrats on being able to save up 8-10k a month being only 24! I'd definitely look at partnering up with your friend and his mom. Partnerships is the key in this business. Keep in mind, that your purchasing power is 4 times your savings, so it's all about scaling up. If you have $100k, your purchase power will be $400k if you put it as a downpayment towards apartment complex. If you have $200k saved up with your capital partner, your purchasing power will be $800k. Also it'd be really good to house hack prior to buying an apartment complex, since the bank will see experience in managing tenants, which will be a huge advantage. I am in a similar situation, same age as you are, have savings, working for a company, doing fix and flips and looking to house hack. Our goal is to have $1M to put as a downpayment for apartment complex, so prior to that we are working 24/7. 

@Anthony Esposito welcome to BP Nation! Congrats on your first deal and beginning with your REI journey!

I'm new to the Houston market (not new to the industry). 

What areas should we focus on in Houston, TX and what areas should we stay away for fix and flip business?

Lots of factors are important in the market, such as flood zones, low/high DOM, etc.. Any advice?

Houston is extremely large city, so any advice would be appreciated to help us pick our farm market.

We are looking at properties valued in between $180k to 250k after repaired.

Thanks!

@Brandon Davis, even though you are partnering up with family members you can trust, I'd recommend treating business as a business, have contracts and written agreements with each other. You can structure your LLC at 50/50 split, but have responsibilities clearly defined in writing, with consequences, what happens if that person doesn't perform his part. When it comes to the capital, you can definitely look at HML and private money as a 2nd position for a gap funding. You'll need your capital for EMD's, appraisers, closings, etc.

@Samuel Rogers, there are a lot of strategies around. This amount is enough to cover full cost of the fix and flip project in most of the US. If I were you, I'd look at private capital partnerships with active fix and flip investors. Since you have your own business, in this case you won't need to worry about tenants, termites & toilets and will still make great returns on your investment. 

Also, you may find it interesting seeking for a capital partner who'd bring same amount and with $300k downpayment you will be able to shop for multifamily properties close to $1M. There are a some guys out there that may have capital, but may not be able to get a loan.

@Robert DeForge You can do a bridge loan to someone who's doing Fix and Flip project with hard money and needs 10-15% towards purchase and x% for repairs. That won't work in CA, where you're at, but it may work pretty much anywhere in US.

@Marielle Walter I had a rental in Vilnius, Lithuania. $120k property. It was really nice house with a view to the woods in a capital, anywhere in US the price would be doubled. But no emotions on investments. I'm very happy that I sold it. Here is why:

The rent was only $500. What a terrible CAP rate. I had to furnish everything, and every month I was getting complaints, that this month tenants decided they need more storage, so I had to go ahead and buy new wardrobe, then they decided that the house needed some repairs, so they didn't pay full rent and fixed something. The same situation happend every other month. Same story with different tenants.

Good thing in EU, that there are no evictions (at least in Lithuania). If they are not moving out for some reason or breaking rules of the lease, or their lease is expired, they can't stay there anymore and they are trespassing, you can kick them out with 1 phone call to the police. It's that easy.

Our family still has another rental in Lithuania, we are having same issues with most of the tenants. And these are not low-end properties, considering that average monthly income is equal to 1 months rent. 

Another thing to keep in mind - it's socialism in EU and taxes are higher! You can't deduct every expense and depreciation so easily as you can in US. Not trying to discourage you, just telling you all the differences I know between US and EU! :) 

I did not buy any rentals in US, I'm using that capital for marketing and fix and flip business.

Although, another tip you should keep in mind if you plan on exchanging USD to EUR is that currency rate is changing every day because of the political situation in the world. For instance at the time of US election and Brexit 1 Euro dropped to $1.08 right now it's $1.18. Here you go, it's $8k saved on a $100k transfer just on the currency exchange by moving money to Europe at the time of some kind of political event.