Getting Started

Our first conversation involves finding out what you want your real estate investment to do for you. Is it to provide funds for your retirement or monthly income?

The following questions need to be answered so we can best serve you.

1. Expected rate of return on your investment?
2. Amount of funds you will commit to the project?
3. Source of these funds?
4. When do you need the money back from the investment?
5. Amount of risk you are willing to assume?
6. Your exit strategy?
7. Will you be managing the investment?
8. What do you expect from us?

Financing

The financial crisis has made it hard to get money for investment projects. Money is available it just comes down to creativity and interest rate. Hard money loans from private lenders work best for bridge financing. For a long term investment it is difficult to make money and pay high interest rates using a hard money lender. Down payments of 20% are almost mandatory, and the more money you can put down the better the interest rate. Today, mortgage lenders will make loans to an investor who owns as many as 10 investment properties. There are even lenders who will do renovation loans for investors. Remember if you are figuring out much money you need, be sure to set aside some money to cover vacancies for rental property.

Preparation

Clients are doing more and more of their own research on the internet. Many of the large syndicated websites give the viewer estimated rental rates for the home and the home’s market value. What they do not tell you is who lives in the neighborhood, what is happening in the area, the percent of foreclosures, accurate values for the rental, and the market value of the home. We provide you with a detailed analysis of the market area to determine the potential of a home before you look at it.

Acquiring a Property

We can help you find the right investment property no matter whether you live in Houston or China. Most clients are actively involved choosing the property. However, some of our investors literally never see the property, relying upon videos taken of the home and evaluations made by our staff. It is not unusual for a client to be picked up at the airport in the morning, drive around Houston viewing properties, write a contract, and fly home that evening.

All properties are evaluated for their rent or flip potential. If the home needs to be rehabbed, we give you an estimate of repair costs before the contract is written. A spreadsheet is prepared which lists the sales price plus the rehab costs, and closing costs. If the home is a flip there must be a suitable profit in the after repaired value of the home. If the home is a rental property, the rental income must allow for a profit after the payment of expenses.

Renovating the Property

Homes come in different categories

• Move in ready
• Need cosmetic repairs and appliances
• Need maintenance, cosmetic repairs, and appliances
• Needing structural repairs such as cracked slab, major re-wiring, extensive water, or termite damage.

We like to leave the homes needing structural repairs for the amateurs. The numbers virtually never work on these homes, and the investor ends up with a loss. We are here to see you make money not lose money.

Our company will provide you with a list of qualified service providers, and subcontractors. We can manage the project or simply provide guidance for you. We will advise you on local building codes and changes which can save you money in the long run.

Finding a tenant for the Property

This is the easy part if we have done our work correctly. People like to lease in areas they would buy in. That means rental property should be in safe neighborhoods, near major freeways, with a minimum of three bedrooms, two baths, good schools, with shopping and dining nearby. The criteria for the home selection will change depending upon the desired rental rate and tenant profile. For example to attract highly paid professionals needing housing the home may need to be a minimum of 4 bedrooms, 3 ½ baths over 2,750 square feet in size, with a pool in a desirable neighborhood located within a reasonable driving distance from work.

The desired rental rate will have been selected before the home purchase. The rate will be based upon leasing the property within 30 days after repairs have been made. Applicants will be screened using a program endorsed by the National Real Estate Association. The lease form we use is the standard Lease Agreement provided by the Texas Association of Realtors. The form is excellent in its ease of use, familiarity, and the protection it offers.

Selling a Property

Your property will be marketed extensively on the internet. It is not unusual for the listing to show up on five pages when the address is typed in Google. The listing will be placed on 70 different syndicated websites along with the local MLS listing.