Investors are flooding to the Texas real estate market. From California to Florida, investors are desperate to own a piece of Texas; from single family to raw land, there is simply no better value and stability.
So…if people all over the US are spending millions of dollars to get into our market, how do we, Lubbockites, take advantage of the same opportunity? It’s easier than you might think.
Step 1: Identify HOW you want to invest in real estate
Do you want to flip a home? Do you want to buy a single-family rental? Or a duplex? Or a package multi-family properties? The first-time investor (with not a ton of cash) usually starts with either a flip or a single-family rental.
Step 2: KNOW the market
This is by FAR the most important step for any investor. Street by street and house by house, home prices vary and can vary drastically. Now, I’m going to shamelessly plug the use of a Realtor here, but more specifically, choose a Realtor who also invests in the local real estate market. The resale game of real estate is different than the investing game, so make sure your agent specializes and personally invests in the market.
Step 3: Obtain Financing
Ok, I don’t want to get your hopes and dreams up if you can’t actually invest. The reason most people are not able to invest is because they lack the 20% down that it takes. Now, 20% is a lot of money, but your first deal should be in the sweet spot of $60,000 to $100,000. It a good market, like Lubbock finding these deals can be difficult, so on to the next step…
Step 4: Search and Search and Search and Search for the Steals
Remember this, you make money when you BUY not when you SELL. In other words, buying a property at the right price is the only way make a profit when you sell.
And now it’s time for another shameless plug to work with a Realtor. Find and agent who studies and reviews the market…EVERYDAY. Steals come up for sales multiple times a week, but your agent has to be looking, constantly to find them.
Steals are steals for a reason. They are ugly. They are nasty. They are infested with cockroaches (our current deal), but with a little elbow grease, they are diamonds.
Step 5: Identify YOUR Strategy
Mine, for example is any 3 bedroom, 2 bathroom, 2 car garage property, under valued (steals), in a neighborhood I wouldn’t mind my family living in. When you get this specific, it makes it easy to say no to deals that don’t fit and take action on deals that do.
The best way to answer this is through an example. We had an investor purchase a foreclosure for $71,000. Now this was a STEAL but it was also a disaster. No cabinets, BB gun holes in the sheetrock, rotted siding, but it was in a great neighborhood. After a $25,o00 remodel, the property is now appraised for $125,000 and will rent for $1,200/month.
Two keys in this. The remodel loan was wrapped into his purchase loan, so he was only out-of-pocket $18,000 to purchase and remodel this home. The instant equity is over $29,000 and the rental income is through the roof because the home is updated.
These are the kind of deals that we are able to find in Lubbock, and we would love to partner with you to make a smart investment.
Call us anytime with questions at 806-831-8436.