Category Archives: small investors

case study on 6104 Walnut Hills Small Group Investment / Syndication

A case study on 6104 Walnut Hills Small Group Investment / Syndication

This was a small group investment also known as a syndication that I completed in 2004/2005.   It was a duplex needed major repairs so I put together a small group to participate with me in the completion of the purchase, rehab and ultimate selling of the property.   Despite several surprises we ultimately sold the property and made a tidy profit for both the money investors and for myself.   

Please see the attached PDF’s the first of which was my prospectus to the Investors some of whom are members in the REICA group and I hope they felt good about the returns they received ((at least I think that they did))   Maybe one of them will come out and testify about this investment opportunity for the good of the group.   (You know who you are!))  

The final outcome came to a 46% return on investment for the money investors and a pretty good return for me as well!   Check out my budget and how the money was spent to see some of the details of what it should look like when you get started in one of these rehab/syndication deals.

To summarize this one I bought it for 33K and got my money partners to put up 40K and went to the bank and got another 40K to rehab it and we sold it for 140K.   We had some budget overruns (small ones) and almost got sued over it ((that’s another story)), but it turned out great for everyone involved! 

This was the last of my small group investments / syndications!   Now I will only do bigger syndications for bigger properties but it was a great stepping stone in my learning and growth as an investor.   If you want to know why I am against small group investments please send me a private email or post it to the REICA group and I will respond to you.  

I hope that this inspires some of you to go out and begin to put together small groups to help you further your investment goals.

 

Post your questions to the REICA board and I will answer some of them if any or send me a private email at Ron@theseaygroup.com.

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5661 Pinon Vista, Austin TX 78724 -SOLD

5661 Pinon Vista, Austin TX

$95,000

More Pictures of the property below

This property is a section 8 rental for $900 per month.   The resident has been there for 3 years!

It is a 3-2 with a 2 space carport.

More Piictures of Pinon Vista

 

10502 Cherry Hollow Xing – SOLD

Picture of the front of property

Sale Price $30,000

 More Pictures of the property

Property description

 This property is a major fixer upper.   It needs everything!   Well just about everything.    A/C work, Doors, Electrical, Flooring, Landscaping, painting Plumbing roof patching, trash removal, tree trimming, Windows.   I am talking A-Z on the list of repairs.    Lots of the jobs appear to be small jobs that someone who has moderate rehab skills could tackle.   But make no mistake about it this is not for the faint at heart!   This is a rehab!!

 The value is in the lot.     The property has the lowest list price in the neighborhood.   Take a look at some of the other properties on the market.   This property could easily be cleaned up and turned into a small rent house or replaced with a home in better condition.    It is on a culdesac so there is no thru traffic and sits at the top of the hill with good views of the surrounding area.   There are beautiful houses going in just off 1431 and the growth is moving toward this property.   The area has been growing tremendously over the past few years.   Please click the following link for a demographics study.

 If the property was closer to my other investments I would consider turning it into a small rent house and renting it out for $500 per month to $650 per month and holding it for a couple of years while the growth continues then selling it for $75K or so.

 

Property History

 The property was purchased as a foreclosure by the current owner and has been sold and repo’d several times and has never received the property attention that it needed to make it a wonderful home.   Now the owners have bigger and better projects to work on and want to find the right person who can love this property back to health and productivity.  

 In the past it has gotten people who have occupied it but never loved it the way it needs and consequently the lack of love has shown!

 If you are the right person and want to make a cash offer the owners are willing to consider taking a discount on the property in order for you to be able to make it work.   Just submit your cash offer and it can be considered!   We are investors and will not be offended by a low offer.

 If you need owner financing we are looking for someone who can put down at least about 10% and who can afford payments of at least $250 per month with a 10% interest loan.   That sounds easy enough but doing the 10% down and 250 a month is the easy part it is the fixing of the property that will require hard work and money to get it done.

 

Repair Analysis

 Our back of the envelope analysis included:

A/C work

1000

 

Doors

500

 

Electrical

1000

 

Flooring

1000

 

Landscaping

1000

 

Painting

500

 

Plumbing

1000

 

roof patching

500

 

trash removal

1000

 

tree trimming

500

 

Windows

500

 

Misc

4000

 

Total

 

$12,500

 

 

 

 

 

 

These figures are only estimates and you should hire a professional to fully investigate.

 

Many of the figures are very rough and include paying professionals to do some if not all of the work.   It may be possible to get the numbers lower but you would need to investigate that possibility on your own.

 

 

Rental Analysis

 

If the property were purchased and repaired and turned into a rental my analysis indicates that the property would generate a 21% average annual cash on cash return and a 30% total return if held for 5 years and sold for $75K.   The rental rate that was used was on $650 per month.   For a three bedroom two bath house that is cheap, but the property is far out and that has to be taken into consideration when factoring the rental amount.   If the sales price could be achieved before the 5 year term the return would rocket skyward!

 

To see the analysis please click for link for the property analysis.

 

Flip Analysis

 

If the property was flipped quickly without doing any repairs just remarketing the property the price could probably be bumped up by $15K for a total of $45K.   If the new seller owner financed the property for $1K and payments of $350 per month and a 15% interest rate then the return on investment would be $1,200/$1,000 = 120% per year!  

 

 

But for analysis purposes lets assume that the initial investment is $3K and then the underlying payment on the first note is $250.   The cash flow generated would be $100 per month or $1,200 per year.   The return on investment would equal $1,200/$3,000 = 40% return per year!

 

 

If the property was given a cleaning and trash removal then the flip price could easily be pushed upward as the property would appeal to a wider range of potential buyers.  

 

 

Owner Financing

If you would like to purchase the property with owner financing I have attached the following documents for you to fill out to submit your information to us as part of the contract.   

Application

I have also attached some examples of the note and deed of trust and other documents that will be a part of the financing package.    If you have any questions about them please don't hesitate to ask, but note that in no way, form, or fashion should any information be construed as legal advise.   If you need legal advise please consult your attorney.

Please click the link for a copy of the sellers disclosure notice

Please click the link for a copy of the Survey

 

If you have any questions about the property please email me at Ron@theseaygroup.com.

 

  Please join our linkedin Network at Linkedin.com www.linkedin.com/in/ronseay

9903 Hansford Dr, Austin TX – SOLD

9903 Hansford Dr, Austin TX

 

          

 

          

 

          

 

          

 

          

 

          

 

          

 

          

 

          

 

          

  $135,000

More pirctures of before the property was repaired are below

This property is a rental and the current rent is $1059 which is probably low by about 150 per month.

The pictures before the property was repaired

Pictures before repairs:

 

       

 

       

 

       

 

       

 

       

 

Pictures of the old roof before it was replace in 2006

After the hail storm that destroyed the outside

7404 Arctic for Sale $95,000

7404 Arctic Ct, Austin TX 

$95,000

Property description

 This property is a 3 bedroom 2 bathroom manufactured home with a 2 car detached garage.   It also has a fenced back yard.   It is in a subdivision of other manufactured homes and comes with the lot.   It is not a lot rental but the price includes the dirt.   It is 1792 square feet according to the Travis Country Appraisal District and has a carport.   It comes with the refrigerator, stove, dishwasher, garbage disposal.    This property is most ideal for a new investor or a family looking for their first home.

 There is a new middle school being built around the corner and it should be open in 2008.   The elementary school is not far away either.   The lot is one of the larger lots in the neighborhood.   There are several new subdivisions being built in the area and this should cause the value to go up as those new properties come online and pull the value of this property up.    

The area has been growing tremendously over the past few years.   Please click the following link for a demographics study.

 

Property History

 The property was purchased as a foreclosure by the current owner and has been a rental.   It has been kept in decent shape and is now ready to received the attention that it needs to make it a wonderful home.   Now the owners have bigger and better projects to work on and want to find the right person who can love this property the way that they used too.   In the past it has gotten people who have occupied it but never loved it the way it needs to be loved.

 If you are the right person and want to make a cash offer the owners are willing to consider taking a discount on the property in order for you to be able to make it work.   Just submit your cash offer and it can be considered!  

 

Repair Analysis

 Our back of the envelope analysis included:

     

Flooring

1000

 

Painting

500

 

Misc

400

 

Total

 

$1,900

 

 

 

 

 

 

These figures are only estimates and you should hire a professional to fully investigate.

  Many of the figures are very rough and include paying professionals to do some if not all of the work.   It may be possible to get the numbers lower but you would need to investigate that possibility on your own.

 

Rental Analysis

If the property were purchased and repaired and turned into a rental my analysis indicates that the property would generate a 21% average annual cash on cash return and a 30% total return if held for 5 years and sold for $125K.   The rental rate that was used was on $950 per month.   For a Three bedroom two bath house that is cheap, but the property is a manufactured home and that has to be taken into consideration when factoring the rental amount.   If the sales price could be achieved before the 5 year term the return would rocket skyward!

To see the analysis please click for link for the Property Analysis.    This analysis was done for another property that is very close to this one and very similar in size and layout.

 

Flip Analysis

If the property was flipped quickly without doing any repairs just remarketing the property the price could probably be bumped up by $10K for a total of $105K.   If the new seller owner financed the property for $10,000 down and payments of $1075 per month and a 10% interest rate then the return on investment would be $1,200/$1,000 = 120% per year!  

But for analysis purposes lets assume that the initial investment is $3K and then the underlying payment on the first note is $750.   The cash flow generated would be $100 per month or $1,200 per year.   The return on investment would equal $1,200/$3,000 = 40% return per year!

If the property was given a cleaning and trash removal then the flip price could easily be pushed upward as the property would appeal to a wider range of potential buyers.  

 

  If you have any questions about the property please email me from the Contact Us Page.

 Please join our linkedin Network at Linkedin.com www.linkedin.com/in/ronseay

 

Information Deemed Reliable but not guaranteed and should be verified by personal inspection or with the appropriate professionals.   Please read the Information about Brokerage Services.   The seller is a licensed agent with The Seay Group, LLC.

More Pictures of Arctic

view of kitchen from dining room ( has a refridgerator not shown in picture)

view of living room from entry

picture of main tub

view of dining room from kitchen

view of sink in main bathroom

view of walk in closet in master bedroom

 

view of master tub

view of shower and toilet in master bedroom

view of vanity in master bath

view of the landry room from the kitchen

 

below are some misc pictures and the first is a view of our Junior Executives conducting a property analysis.

 

 

rising property values or taxes I did the math

I read an article today in the austin american statesman at statesman.com It was titled Austin property taxes jump 38% over the past decade.  

The premise of the article was that Austin's Growth was not paying for itself meaning that its existing residents were subsidizing the growth that the city was experiencing.   While not wanting to get into that argument I did notice some interesting info on whether or not based upon the data that was presenting in the article the tax rate actually went up or did the property value go up.   If the property value went up does that negate the entire premise of the article?

check out the following picture:

 

The article had some interesting info about whether the tax rate rose or the property value rose but it did not so the simpliest math to reach the conclusions that it tries to reach.

For example the tax rate in 2000 was 3,147 / 138,674 = 2.27% and the tax rate in 2010 was 5,590 / 261,542  = 2.14% so the tax rate did not go up but actually went down over the 10 year period.   What went thru the roof was the property value!   Thats right is nearly doubled!   I will take paying higher taxes everyday in exchange for a higher property value, because I am gaining in real wealth!.   In the article the couple featured saw a tremendous increase in their taxes paid but the property value went THRU THE ROOF!!!

Are your investments going thru the ROOF if not call me to add some real estate to your profolio at 512-782-8982.

 

 

Mobile Home Investing

Over 100% Yield On My First Mobile Home Deal

I have been reading everything posted on this site for several months. Last month my wife became upset because I was not doing anything with all the information that I was getting off the site. She said she wanted to have another child! I said not until we do our first deal. So she went out in her zeal and tried to find us a deal. We almost bought a mail store, but I figured that we wouldn't have time for our real estate business. Continue reading Mobile Home Investing

A case study on 4800 Spring Meadow Cove, Austin TX 78744

case studyA case study on 4800 Spring Meadow Cove, Austin TX 78744

The Spring Meadow Cove property was purchased on April 22, 2003 from HUD for $54,603.   The property was built in 1984.   The house was a 3 bedroom, 2 bathroom, 2 living areas, a dining area, and a 2 car garage.   The house was immediately rehabbed and listed for sale at $115,000.   It was sold for sale for $116,000.   The repairs were complete by Remar Ministries.   It required approximately $7,500 in repairs.   The list of repairs included:

Continue reading A case study on 4800 Spring Meadow Cove, Austin TX 78744

Did I miss the boat or has the ship not come in?

Did I miss the real estate investment deal of a lifetime boat?

I read an article the other day that outlined the plight of the small independent real estate investor and it took the time to explain in some detail the requirements for buying property today!   In a word “CASH”!

Continue reading Did I miss the boat or has the ship not come in?

Owner Financing in Texas

From the Texas Association of Realtors:

“Many of us have been very concerned about the implementation of federal legislation known as the SAFE Act that would severely limit an individual’s ability to seller finance their property in Texas.

We are working on numerous regulatory and legislative solutions to this affront to private-property owners, and have some good news to report. At our urging, the chief regulator over the SAFE Act in Texas, the commissioner of the Texas Department of Savings and Mortgage Lending, has taken significant steps to allow Texas property owners to continue to seller finance up to five transactions in a 12-month period.    Continue reading Owner Financing in Texas