real estate cash flow – Page 2

February 5, 2016February 10, 2016

Why It Is So Hard to Find Affordable San Francisco Investment Property?

Many of my out of state property investors come to San Antonio TX from San Francisco. They find it is very difficult to find affordable San Francisco investment property that will produce passive cash flow.

According to Forbes, 2016 is an excellent time to pick up under market value properties for cash flow in many undervalued markets. One of the most undervalued investor markets is San Antonio, which comes in at #6 on their list with a median price of only $189,000. It also is rated as their #4 boom town.

sa2 — San Antonio is a much more affordable place than San Francisco to buy under market value properties.

San Antonio is where I have bought hundreds of under market value properties since 2000. I have made millions of dollars off of below market value, $50,000 houses that many investors would laugh at.

It’s much easier to make real estate cash flow on investment properties in the undervalued market of San Antonio. It is IMHO one of the best cities to invest in real estate given its growing population, affordable real estate, low taxes, and strong economy.

San Francisco Investment Property Hugely Overvalued = No Cash Flow

Meanwhile, San Francisco houses and San Francisco investment property is among the most overvalued in the US, according to Forbes. That magazine states that five of the most overvalued investment property markets are in California: San Francisco, San Diego, San Jose, and Los Angeles.

What is driving the lack of affordable investment property in San Francisco? There simply is not enough supply of market value properties for home buyers, which means that California investment property is just too expensive to produce real estate cash flow.

One of the reasons for that, Forbes says, is that many Chinese buyers have come into San Francisco and bought up San Francisco investment properties, paying full cash offers.

Another source says that San Francisco price to rent and price to income ratios have gone up by 25% from 2012 until 2015. The median price for a San Francisco house is $548,000 and is up 24% from a year ago.

In fact, San Francisco investment property houses are getting near to levels that were during the bubble years of 2006 and 2007. That was when prices in San Francisco were near $665,000.

I do not know how San Francisco investment property buyers can survive in that market, or California investment property generally. If you buy for appreciation, maybe you can do well, but that is far too risky for me.

I am an under market value, buy and hold, real estate cash flow investor.

A Good Example of Under Market Value, Cash Flow Property

Like I said earlier, I buy and sell under market value properties that many wealthy investors laugh at.

For example, this below market value San Antonio investment property was sold to my investor for only $25,000:

No one wanted this ‘junk house.’ I did! I saw the $100,000 houses next door lived in by the owners, and all of the revitalization going on in this area of San Antonio on the near west side.

Many out of state investment property buyers looking for real estate cash flow would never buy this house. My investor did for $25k, and then I did $27k in rehab:

Electrical update
New flooring (float new floor over that minor foundation issue after it’s repaired)
Clean out
Update bath and kitchen with tile and granite
New light fixtures
Paint in and out
Finish second bedroom

The ARV on this below market value property is $79,900. We just finished the rehab in the middle of January 2016. And guess what? By early February, we already had an owner finance buyer for it: $5000 down, $850 per month, $79,000 final price, 10% interest, 30 year note.

That is what you can do with investment properties in an under valued market here with San Antonio investment property. Anyone who buys San Francisco investment property or Los Angeles investment property or Seattle investment property will never see these types of returns or prices.

February 5, 2016February 10, 2016

Looking for Real Estate Cash Flow in Under Market Value Property in Seattle? Good Luck!

Many home buyers and under market value property investors in the Seattle WA area have been looking for the last couple of years for affordable homes not too far away from downtown. But Seattle real estate is out of reach for many investors.

I have been reading that it is very tough going. According to Redfin’s Real Time Housing Market Tracker, it is very difficult to find under market value investment property in and around Seattle. In fact, you will have a hard time buying anything under market value within 50 miles of the city.

Redfin reported last year that Seattle actually pulled even with housing-starved San Francisco for the first time in history. Also, Seattle was reported to have the lowest home inventory ever, making it hard to find affordable Seattle investment property.

The nationwide view for housing generally was better in 2015, with prices going up an average of 10% overall. Only 18% of houses were sold above market value around the US.

But in Seattle….ouch. Last March, the median sales price in Seattle was $380,000. This was an 11% rise from the year before. The Seattle cash buyer does not know where to go for cash flow!

If you are an under market property Seattle investor, you are going to have a very difficult time producing passive cash flow a Seattle investment property.

Welcome To Texas, New Seattle Out of State Investment Property Investors!

I sold this ‘junk’ house for $25k, rehabbed it for 27k, and resold it for a 12% ROI for the investor in just one month. It sold for $89,900.

This year, I have actually picked up two near out of state property investors from the Seattle area looking for real estate cash flow. As it turns out, both of them were having an impossible time finding affordable properties that could generate cash flow.

As is often the case, these out of state investors have good jobs that make them $200,000 or more per year, but they must work 50 hours or more per week, and travel for 1/4 of the year or more. They want passive cash flow on below market value property, and that is what I do in San Antonio TX.

Usually, when a new investor comes in from out of state, such as California or Washington, I will put them into a nicer under market value property in a hot area. North of downtown San Antonio in 78201 is especially hot. Lots of young professionals are moving in there as it is so near downtown and all of the nightlife and tourist activities.

In many cases, I resell these below market value houses after rehab of 10-25k in days or weeks for 12%+ real estate cash flow. Here’s a great San Antonio investment property:

Address: 2229 W Hermosa Dr. San Antonio, TX 78201
Year Built: 1948
Description: Under market value property sale in hot north of downtown neighborhood, 2 beds 1 bath, 769 sqft, built: 1948, lot size: .14 acres yearly taxes: $1,200.00, estimated yearly insurance: $800.00, estimated repairs on this distressed sale: 35K, includes new HVAC, converting to 3 BR, updated kitchen, flooring, paint in/out, exterior skirt, roof, room addition, appliances, paint out door storage exterior, trash, lawn maintenance.
Max After Repair Value: $129,000.00 with owner financing, comps are for 3/1.
Cash Price: $69,900 firm.
Exit Strategy: Owner finance this out of state investment property with positive cash flow with $35,000 in repairs, $1295 per month, 10% interest rate, $5000 down, 30 year note. Or, do $15k rehab – HVAC, paint in and out, flooring, resell for $105,000, $1050 per month.

These San Antonio investment properties are reselling fast right now; in fact, I just rehabbed and resold this under market value house in a few weeks after rehab was done.

February 3, 2016February 7, 2016

A $25,000 “Junk” Under Market Value House Success Story in San Antonio

I have made my real estate investing career in buying and selling under market value properties in San Antonio TX that most investors are afraid of.

The under market value properties for real estate cash flow that I buy are scary looking, but you just have to look beyond the exterior ugliness and see the potential of the house and the neighborhood.

I just had yet another under market value success story I wanted to share with you. My out of state investment property investor bought this ‘junk’ house for $25,000 in November:

It had sat empty for years and was part of an estate sale. Now this house was ugly, no question about it. But it is located in an up and coming neighborhood in 78207, where the city of San Antonio has spent millions of dollars putting in running trails, parks, shopping plazas, green space and so on. This ‘junk’ house is only 2 miles from downtown and all the tourist attractions of the city.

Yet this under market value house sat for months and no investor wanted it. I grabbed it and now my investor has excellent real estate cash flow.

Right next door to this ‘junk’ house were these owner occupied homes:

Those houses right next door are worth more than $100,000, but no one wants my under market value ‘junk’ house because it’s temporarily ugly:

The conventional investor cannot see past the ugliness, but I saw the potential here because of the neighborhood revitalization and the nice houses around it.

So, I sold this house for $25,000 to an out of state investment property investor who did $20,000 in rehab (which I did for him in 30 days), which included:

Electrical update
New flooring (float new floor over that minor foundation issue after it’s repaired)
Clean out
Update bath and kitchen with tile and granite
New light fixtures
Paint in and out
Finish second bedroom

Below are the after rehab pics:

The ARV on this below market value property is $65,000. We just finished the rehab in the middle of January 2016. And guess what? By early February, we already had an owner finance buyer for it: $5000 down, $650 per month, $65,000 final price, 10% interest, 30 year note.

The house was on the market for less than a month. So on a $45,000 investment, the out of state property investor will earn about 12% ROI with no more repairs because we owner financed the house.

This is the kind of under market value investing I do – I buy ‘junk’ houses that other investors reject and turn them into little gold mines with steady, no maintenance real estate cash flow.

January 30, 2016February 16, 2016

How $29,900 ‘Junk,’ Under Market Value Properties Can Make You Wealthy

I buy and sell wholesale properties in San Antonio TX every week that most investors say I should have just torn down. ‘Why would anybody buy an out of state investment property that looks like THAT?’

LOL! I have made millions of dollars in my 15 year, under market value property investing career, and most of it was on cheap, ‘junk’ houses selling for well below market value. Ugly houses that typical investors run screaming from.

I own dozens of previously ‘junk’ houses that I bought under market value that looked very rough, such as the distressed property you see below for real estate cash flow.

Take a hard look at that photo. Does that photo make you want to run away and hide? If so, sorry, but you are making a serious mistake. You can purchase under market value properties just like that one for $29,900. Then, you do not rent it.

No. Instead, you owner finance it to a blue collar, hard working buyer that we qualify for you. As long as the buyer can prove they are working steadily and have $5000 down payment, they can buy this house.

Here is where it gets even better for the below market value property investor: You can often sell a house such as the one below AS IS to an owner finance buyer. You might spend $1000 or $2000 to clean it up, but other than that, you often can sell the house as is.

Front — I just sold this house with NO REPAIRS with owner financing in Jan. 2016, $500 per month, $5000 down.

So, if you buy ‘junk’ houses such as the one below for $29,900 and do no repairs, and then owner finance it for about $49,900, $500 per month. You can enjoy at least 12% ROI and never do any repairs! Not bad for excellent real estate cash flow.

Or, do $30k in rehab and resell it for $5000 down, $895 per month, $89,900 final price.

Either way, you are making an outstanding rate of return on an under market value investment property that most investors foolishly avoid.

If you want to get really wealthy with an out of state investment property, buy a dozen or more of these little, ‘junk’ distressed, San Antonio investment properties and owner finance them as I did. You will get $500 to $600 per month on each if you do no repairs, or $800 to $900 per month if you do the rehab. It’s up to you!

Address: 228 Yucca, San Antonio, Texas 78207
Year Built: 1950
Description: Booming San Antonio Market, very popular location west of downtown, this is a 2/1 that has a lot of potential, perfect for a young family. This is a great location and wholesale property, only a few minutes west of downtown and the Riverwalk. Property sits on a beautiful large lot, plenty of room for growth or a wonderful playground and garden.
Max After Repair Value: $89,900
Cash Price: $29,900 firm.
Exit Strategy: Owner Finance with 35K repairs: 5-10k down, $895 monthly P/I, or owner finance as is, $500 per month, 30 year amortization, 10% interest, Price: 89.9K, can sell note after 1 year; or rent: $900 monthly with 38K in repairs.
Notes: We recommend that you owner finance this house because you will have no maintenance expenses.

The majority of my buyers for real estate cash flow are former buyers of California investment property, San Francisco investment property, Los Angeles investment property and San Diego investment property. San Antonio investment properties are hard to beat for cash flow and low cost, especially when you do not have to do maintenance on them.

But remember, this is seller financed property, not a rental property.

January 29, 2016February 7, 2016

Should I Buy An Out of State Investment Property?

If you are a real estate investor in California or another high-cost area, you probably are considering an out-of-state investment property. In the costly cities of San Francisco and Los Angeles, many real estate investors are priced out of the market.

This recent graphic of San Francisco housing prices tells the tale:

Investing in a market like that is brutal unless your closets are full of cash. Here in Texas, I have been blessed to build a big portfolio of under market value investment properties that are very low priced.

If you are ever considering an out-of-state investment property purchase, below are some pointers:

How to choose your out-of-state market

The best locales to invest in under market value properties depends on what you want to achieve. Do you want to flip for quick cash or buy and hold long term? I always want long term real estate cash flow.

Also, I favor investing in under market value, buy-and-hold properties — usually with seller financing. Long-term cash flow is, in my opinion, the best vehicle for massive wealth accumulation.

Anyway, note that a good buy-and-hold market might not be so great for flipping. In my home market of San Antonio, flipping is getting harder as prices rise.

Many flippers I know are starved of under market value deals that can turn them a decent profit. On the other hand, buy-and-hold investors like me are doing well; 10 to 12 percent ROI is still routine for my portfolio.

As you mull where to purchase your out-of-state investment property, consider these points:

State laws: Is your potential out-of-state market friendly to under market value property owners? I advise you to invest only in states that have landlord and owner-friendly laws. I want to be able to evict non-paying tenants and foreclose easily on defaulting buyers. Texas is property owner-friendly.
Population and economic trends: Is the state growing or shrinking in population? How is the job market? As an example, according to CNN Money, Texas is seeing rapid population growth and a strong job market. Forbes stated in a Jan. 14 article that four of its 53 boomtowns are in Texas: San Antonio, Houston, Austin and Dallas. A state with strong population and job growth will have plenty of renters and buyers needing houses.
Price-to-rent ratios: What does it cost to rent a house compared to buying one? CNN has a helpful graph on price-to-rent ratios. San Francisco and Honolulu have the highest ratios — over 30 — while Detroit is lowest at around 10. Generally, I recommend buying in a market with a moderate price-to-rent ratio.

This is not an exhaustive list of considerations for buying out-of-state investment properties. However, if those three points look solid, odds are you will produce positive cash flow in that area.

How to locate a good out-of-state investment property

If you have a good idea of your best city to invest in, how do you know which under market value property to buy? Most investors go one of two routes:

Find a great real estate agent or investor who knows how to scout for good under market value properties and wholesale property. Hopefully, he or she will network with top-notch property inspectors, rehabbers, title companies and a real estate attorneys.
Find a reliable turnkey property company. These under market value properties have been 100 percent rehabbed and often have tenants already in place.

Which route do you choose? It depends. Many out-of-state property investors want zero headaches or stress and don’t want wholesale property. So they purchase turnkey properties.

Other investors want to save money, so they find their own under market value properties and coordinate their own rehabs and property management.

If you handle your own investment properties out of state, consider:

Upsides

You get the house cheap
High ROI
You control rehab costs

Downsides

The house has zero cash flow during your rehab and time to find the occupant
Rehab costs might skyrocket if your partners on site are not top tier
It’s difficult to manage rehab from 1,000 miles away
Material costs can increase when you do one rehab at a time

If you buy turnkey, consider:

Upsides

There’s no rehab to worry about
An occupant is in place
There’s no muss or fuss on your part
Material costs are standardized
The quality of work is there for you to see from the start
The entire investment team is in place

Downsides

Higher upfront cost
Lower ROI

How much is the difference between buying an under market value property yourself or a turnkey property? In my experience, I can do the rehab on a distressed property for half of what a typical rehab crew will charge.

That can make a difference of 2 to 3 percent in ROI per year. That adds up over time. However, I’m a full-time investor with a construction company. My rehabs cost less because I do 100 per year. You might not be able to do that, so a turnkey might make more sense.

For the beginner, I might lean toward buying solid turnkey company in a low-cost market as a first out-of-state investment property. That will help you dip your feet into the investing waters with some positive cash flow, then you can grow into building your own under market value investment team. Above all else, look for solid real estate cash flow from your distressed properties to get the best start in real estate.

January 8, 2016May 29, 2021

What Should You Not Do When Buying Under Market Value Property?

Many real estate investors with out of state investment property flame out quickly when they buy under market value properties. That’s because they make huge mistakes that either mean they make no money or they lose money.

The things that you should not do when you buy below market value property for real estate cash flow include:

Not doing your research. You don’t usually buy a car without doing a lot of research, right? The due diligence you do when you buy an under market value house should be even more rigorous. When I buy the best San Antonio investment property, I do my research about the neighborhood down to the street level. I also do a thorough inspection of the property before I make an offer. This is one reason you might consider becoming a real estate agent, as I am. That way you can search for your own deals in the MLS and view the houses yourself.

Doing it all yourself. I’ve been doing real estate investing in below market value properties for 15 years, but I don’t try to do everything myself. I have on my team a good inspector, full construction crew, real estate attorney, CPA, insurance professional and closer. I have seen many investors buy a house on their own and they end up with losing their investment.

Paying too much. This of course will turn your under market value property investment into a real mess. Finding a good house to invest in takes time, so it is tempting to make a high offer that will be accepted quickly. Overbidding means that you will have too much debt, if you are buying with financing. This creates big problems when repairs and vacancies crop up.

Spending too much on rehab. A classic mistake of the under market value property investor is to spend too much on fixing the property. I have been investing in San Antonio distressed houses for 15 years, and I know how much rehab to do on a house to resell it. If it’s in say 78207, I may do 15-20k in rehab, but I know I probably can skip the granite in the kitchen. If I am rehabbing in a higher end area such as 78201, I will do the granite and fancy back splash in the kitchen. Also, I have a construction company that allows me to save 30% or more on rehabs compared to retail contractors.

Making money in under market value properties for real estate cash flow isn’t easy, but it is doable with proper planning and research. If you have any questions about investing in the best San Antonio investment property, please contact us.

When you are considering below market value property or out of state investment property, please try to avoid the above mistakes!

January 7, 2016January 11, 2016

Earning 11% ROI on Under Market Value Property for Building Wealth

New and even experienced investors often ask me how I was able to build monthly positive cash flow of more than $40,000 per month – without starting with much capital.

There are many factors involved, but at the end of the day, my strategy is very simple for real estate cash flow:

I buy 20% under market value investment properties in San Antonio, Texas.
I perform about $25,000 in rehab in 45 days, and then resell with owner financing to earn a 10-12% ROI.

I also have a great good luck charm named Teddy, which you will learn about if you stick around long 🙂

Now these are not very expensive houses; after all, this is San Antonio TX. My typical property is $60,000 or so wholesale, which is then resold with owner financing for $100,000 or so.

Each one of my below market value properties earns me ‘only’ $400 or $700 per month in positive cash flow. Some investors – especially those on the West Coast – might snicker at such a ‘small’ return.

However, one thing I have learned over 15 years in real estate investing in under market value properties is this: I would much rather do 100 ‘small’ deals per year, than 1 or 2 ‘big’ deals.

My little, bitty 3 bedroom houses for $100,000 or less may not look like much, but when you have 50 of them owned in cash, you are talking serious, positive cash flow. And that is what allowed me to financially retire at 28.

These little houses are becoming even more valuable in San Antonio these days, given how the economy is growing. The north side of downtown, especially 78201 zip code, is appreciating very well. I love to buy fixer upper distressed properties in this area – under market value.

This house 2229 W Hermosa, San Antonio TX 78201 is a typical hot deal north of downtown that will do very well for the savvy investor.

After I do $35,000 in rehab on this below market value property, I will resell it for the investor with owner financing. I’ve bought and sold hundreds of houses in this area, and I know that I can resell this property with owner financing for $129,000. That will generate approximately $1,000 per month in positive, long term cash flow for the investor.

It is on under market value deals just like this one that I have built a large nest egg of real estate cash flow that made me financially retire so young.