Northwest San Antonio 4plex

Fire Damaged 4 plex in North West San Antonio!!! The rentals are highly desirable in this area! 2 units are burned and  the other two are in decent shape but still need rehab. Will need a new roof/new hvacs/new framing-drywall-wiring(2 units)/siding/some windows/and cosmetics in all 4 units. This is for any investor who's willing to put the work in to result in a CASH FLOW GIANT! Call now! this will be the cheapest fully remodeled fourplex in the neighborhood! Check the comps! Contact Ryan Harthan at 210-710-1617 for more information!

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Rehab week 2 and 1/2

Nothwest Rehab Week 2 and 1/2

What's been done?

Well since my last post it's kind of tough to tell from pictures what all has been done.  The ceilings have been retextured throughout the entire house as opposed to just scraped like the last time I was over there.  All fixtures have been removed along with AC vents.  All the walls, ceiling, and doors have been painted.  There was originally wallpaper that was painted over in the bathrooms and kitchen which was removed and retextured.  Because this house is so dark inside I've decided to market it without blinds on the windows.  My reasoning for this is that the first thing any agent does when they enter a house to show to a client is open the window blinds to let light in for their buyer.  I figure it will save me a little money up front and if the buyer does want them installed I'll do it during the inspection period.  

What's the next step?

Kitchen, bathrooms, garage door, exterior paint, and fixtures.  I'm 1/3 of the way through my budget with my GC ($4,000 of $12,000) and he's asking for his second draw.  This is about right being as how the first part of the job was very labor intensive and didn't require a lot of materials.  Phase one was a lot of demo work, scraping popcorn texturing, ordering a dumpster, retexturing, and painting.  The next stage should also be fairly labor intensive as well consisting of re finishing the cabinets and demo work in the master bedroom. Material heavy expenses should kick in when we replace the garage door and start ordering granite and tile.  My ideas of where I want to go I'm borrowing from one of my clients, Jim (thanks for letting me borrow some of your pictures bud!)

I haven't decided exactly which color scheme I want to go with yet but having an awesome back splash with some good granite tops always helps out.  Generally we say anything worth over $125,000 needs granite (which should always match in the kitchens and bathrooms) but if you really want to sell your house quick spend a few extra bucks and put it in.  

I really like the accent line about eye level.  I'm going to be doing this in my second bathroom.  I have seen houses where they take out the tub, build up a 6" wall and turn it into a walk in shower, which I like a lot.  But you do need to have one bathtub in the house and I'm leaning towards ripping the master tub out and making 1 large walk in shower.  

Free Webinar on Real Estate Financing

Free Webinar on Real Estate Financing

     I met Kurt Carlton about a year ago after joining up with New Western Acquisitions.  I first met him in the context of one of the three owners of my company but later realized that Kurt has taken a forefront position in Sherman Bridge Lending, our sister company.  In this video Kurt has taken some time out to spill some serious knowledge about how to invest in real estate in Texas.  Some companies charge thousands of dollars for "educational" courses about how to find sources of funds, how to flip a house, or how to build a rental portfolio.  These videos are possibly more valuable and are FREE.  If you plan on taking 53 minutes out of your day to educate yourself on some subject today, watch this video.  If you have any questions feel free to get back to me, respond to this post, email me, or just give me a call.

Some Advice for New Landlords

Some Advice for New Landlords

     For those who don't know me I've been a landlord since I was old enough to remember.  I wanted to share a couple pro-tips for new landlords that want to avoid losing a lot of money and time (I've done it).  The following are just a few things I learned the hard way over the years.

• Eviction is a colossal waste of time and money for you! If you're thinking of evicting someone anticipate it costing you about five times one months rent PLUS whatever damages the tenant has made and I assure you there will be damages. I'm going to do a separate post about why eviction is the last resort shortly.
• Bring air filters for the A/C with you once a month when you go to pick up rent. As sure as you're born you're tenants are not replacing that filter. And while it may seem like a hassle to go to Home Depot and buy one every month, it's a lot less expensive than having an A/C unit burn out on you and having to spend $3,000.00 for a new one.
• Make your tenants pay you in cash or certified funds. I can't tell you how many hot checks have been written to me over the years but there's been a ton.
• Make sure you have a clause in your lease that reads something to the effect of, “First $20 (or whatever amount you agree upon) of any repair is the tenants responsibility to cover.” If you get a hypochondriac tenant who is always calling you for repairs it will drive you crazy. Also place an amount for going out to complete a repair, usually the same amount they need to cover. This will prevent you from having to drive over to the house fifteen times a month.
• No dogs. They chew siding on the house, dig holes in the yard, and generally just destroy things. You can put a pet deposit on there but the repairs you'll have to do for that dog will surpass any typical amount on a lease.
• Bullet-proof the house on your first rehab. Ceramic tile or vinyl throughout the house and semi-gloss paint. Carpet will be destroyed instantly and semi-glossed walls are a lot easier to wipe stains off of then flat paint.
• I've been trying to build a “No Crayons” clause into my leases for years. Hasn't worked out yet but I would still try to give it a shot.
• Try to make sure they're watering the yard. The last thing you want is foundation problems because you're tenant let the ground around the slab get too dry. This is Texas, if you drive by the house during the summer there's a good chance the grass will be struggling but try to make sure they're making an effort to water.
• Don't take a security deposit after a tenant moves in. You must get it up front. If you try to work a payment plan out with them you will never get the deposit.
• According to the Texas property code a landlord is not required to make any repairs that do not effect the health and safety of the tenant if they are not current with the rent.
• Any request for repairs must be sent to the landlord's address listed on the lease via certified, return receipt mail. The landlord then has a reasonable amount of time, usually interpreted as seven days, to make said repair. The tenant must then send a second letter certified mail, return receipt and allow for another reasonable amount of time for the repair to be made. At this point in time the tenant may either pay to have the repair made and deduct the cost from the rent, provided it is less than one months rent, or cancel the lease, provided they are current on payments.
• Pick your rent up yourself. It gives you a chance to make sure everything is ok at the house and change that air filter. It will also let you make sure that there aren't more people living at your house then are listed on the lease.
• Rent is due on the first, late after the third. Most tenants get paid on Friday so I typically go to collect rent the first Friday after the third. Then again, my tenants have horrible credit and have been in the houses since before I got control of them. You can avoid this situation by running credit checks. There are too many renters in San Antonio for you to settle for one that is going to cause you a headache.
• Don't let tenants fix a problem themselves. The work will never get done, you'll give them a break on the rent, and is all around a bad idea.
• Always remember that a security deposit does not cover the last months rent. Tenants will try to sucker you into this from time to time but the security deposit is to ensure no damages are done to the house.
• Tenants that are college aged do more damage to a house. You may want to consider a larger security deposit or having them get a cosigner.
• I usually let tenants break leases early as long as they are on time with the payments and they let me know a full thirty days before they move out. If they can be out a week early and leave the place in decent shape even better because I can show it and get another tenant in there right away.
• Some people use real estate agents, I don't. Pitch a sign in the front yard for $5 and throw a couple ads up on Craigslist. You should have no problem getting tons of calls. If you use an agent you typically have to pay them a months rent which is split between the agent representing you and the agent representing the tenant. San Antonio has so many renters it should be no problem to do this yourself.
• I don't recommend property management until you get to about ten rentals. Going rate is about a months rent and 10% of rent collected. I'm pretty cheap and until you're juggling more than ten rentals and a full time job I don't think the value is there for you.
• Cheaper houses cash flow better. A $120,000 house on the North side will rent for about $1,000-1,200 a month. A $40,000 house on the West side will rent for around $800 a month. You could have three of these houses and be making $2,400 a month as opposed to $1,200 a month and diversify your risk over three assets. Do I want a nicer house? Sure, but I like making money.
• Military tenants are fantastic. If you can buy something out buy 151 and 410 or in Converse close to the bases for a good price the quality of tenant will be substantially better.