All Forum Posts by: Eric Tait

Hey Jacob,

In Houston there are hard money lenders that will lend you up to 70% of the ARV (after repaired value) of the house and then lend you a 75% LTV fannie mae loan as your long term financing. It is possible to have less than 10% out of pocket in doing a transaction like this if you are able to identify a property that is undervalued and needs rehab work.

We have completed 7 of these transactions here in Houston over the last 12-18 months.

Hey Jordan,

BP is a wealth of knowledge, welcome to Houston real estate investing, the time is great. Please post with any questions that you may have.

They are similar housing stock, and in all honesty it is very much a neighborhood by neighborhood comparison,

If you have a specific area in Houston you want to know about I can run a quick CMA for you, but as a general rule, both cities have very similar growth dynamics, so you are not going to go wrong in either on a macro level, once you start looking to areas and neighborhoods, that is going to take local knowledge.

So ask about specific neighborhoods that you may be comparing and then we may be better able to chime in on how things are selling in each of them.

I can only speak of Dallas from hearing other members of a real estate group that I am a part of, and it seems to be very similar to Houston in terms of the differing types of neighborhood and demographics.

I can speak about Houston in that, as long as the neighborhood has an active civic/homeowners association, you will not get strange commercial projects going popping up. There are usually deed restrictions that determine what types of residential properties can go in, what the set backs are, the height etc..

These act as de facto zoning boards, and it tends to keep the commercial business on main thoroughfares and highways.

I tend to buy in the suburbs (~20-25 minutes out of the city) which all have deed restrictions and pain in the neck HOA's. So the zoning issue does not really affect investors out there, but there can be architectural control committees that have a say in the exterior of your property (shingle color, house color etc...)

Hope that helps. If you want more specific Houston info, just PM me.

Funny you should mention Ponderosa Forest,

We own 2 properties in that subdivision all in for just around 100K (after 28K rehabs using hard money) both appraised for over 145K and cash flow $500+ a month and we get offers from people to purchase all the time.

So its interesting how two people can look at the exact same situation in a different way.

I am currently holding long term in this market.

My personal investment philosophy has me buying outside the two loops (I-610 and Beltway 8) around the perimeter of Houston.

I stay away from inner city property (older and higher touch management from my experience) but many people I know make money there.

I look for mid-late 70's 3/2/2 and 4/2/2 that rent for a minimum of $1000 a month. This can be found in older subdivisions, I like to buy at $40-50 a square foot and then put $10-20 in for rehab, this gives me a nice equity cushion plus it will still cash flow upwards of $400/month.

Texas is tricky with property taxes and MUD taxes so you have to look at the tax burden expressed as a percentage of assessed value. Here in Houston it can run from a low of 2.6-2.8% in the city of Houston to as high as 3.5% in some suburbs, so you have to get your tax certificate, also add $200-$500 per year in HOA fees. (paid as a one time payment yearly)

Feel free to PM me, if you would like more detailed information as I do not want to write a book on here.

Welcome Mohammed,

I can introduce you to my broker, he specializes in small multi-family apartments, he helped me buy my first one and now has it listed for me (we are under contract, a 10 unit in the Gulfgate area of Houston).

He is more than willing to help educate you on the steps it takes to get into small multi family as well.

Just private message me and I will give you his information.

I echo Sharon, there are about 5 major brokers in Houston who get the majority of the deals, they get tire kickers all the time so you want to make sure that you are pre-qualified (if you are using financing) and present yourself to them as someone who is not going to waste their time.

You are correct that they prefer to deal with million dollar buyers, but they can pass you along to their colleagues IF they know that you are serious and at least can speak the lingo of Class, market/submarket, cap rates, etc... in terms of what you are looking for.

Welcome to BP, Houston is a great market to be in. As you have questions make sure you post them here on the site.

Welcome to BP, this is a great site for information, so do not be afraid to post your questions.

@Mehran Kamari,

I see you are a disciple of the real estate guys.