Need Suggestions Regarding REI Clubs In Houston

[canadian]

Any suggestion as to a good REI club to join in the Houston area? Am looking to learn about RE investing and tax foreclosure sales. Happened to be near the Family Law Center (?) during last month's tax sale and was amazed at the number of people participating as well as the number of properties on sale. How can something just sell for an asking amount, far below the HCAD value, and sometimes with no takers? Are there other 'unknowns' like liens etc.,? I thought a tax sale trumps all other liens?

Anyway, just looking or a real estate investment club to join, as well as any other suggestions like books etc., pertaining to Houston real estate. Thanks.

[HoustonRealtor]

I know *nothing* about this other than the fact that it exists. It is at Re/Max Top Realty (Beltway 8 and 288), just north of Pearland.

Pearland Realty Investment Club

[gnu]

RICH club.

http://www.richclub.org/index.cfm

they usually meet on saturday mornings at the UH-Hilton

It is a good place to network, too.

[gwilson]

Networking in these clubs isn't going to garner you any business because everyone else there is there for the same reason.

That said, business networking groups are not a horrible idea. www.meetup.com is a good place to start. I'm a member of a few groups but haven't actually attended meetings.

[TonyH]

Any suggestion as to a good REI club to join in the Houston area? Am looking to learn about RE investing and tax foreclosure sales. Happened to be near the Family Law Center (?) during last month's tax sale and was amazed at the number of people participating as well as the number of properties on sale. How can something just sell for an asking amount, far below the HCAD value, and sometimes with no takers? Are there other 'unknowns' like liens etc.,? I thought a tax sale trumps all other liens?

Anyway, just looking or a real estate investment club to join, as well as any other suggestions like books etc., pertaining to Houston real estate. Thanks.

My suggestion would be to define your investment goals first...

Mine is cash flow, and I think the Houston market is ideal for that (and fundamentally undervalued in terms of valuation).

If you plan to buy properties in tax sales and/or foreclosed ones for flipping, think this: If the seller could sell it for more, why give it to you for a discount?

I don't think there are any books specifically for Houston investing, just one for Texas Landlording (ISBN: 1572483555). The rest of them are not state specific to TX.

[canadian]

My suggestion would be to define your investment goals first...

Mine is cash flow, and I think the Houston market is ideal for that (and fundamentally undervalued in terms of valuation).

If you plan to buy properties in tax sales and/or foreclosed ones for flipping, think this: If the seller could sell it for more, why give it to you for a discount?

I don't think there are any books specifically for Houston investing, just one for Texas Landlording (ISBN: 1572483555). The rest of them are not state specific to TX.

Thank you HoustonRealtor, gnu and gwilson for your input. The RICH club seem interesting and has a track record.

TonyH: Thanks for the suggestion to define investment goals. My goal is not to flip, rather to buy, do minor repairs and hold for a while. Also, I'd like not to invest anymore money than the initial downpayment (or purchase price in the case of tax sale) and for the property to yield positive cash flow after paying for mortgage, insurance, repairs etc., Am not a very handy person so would rely on contracting out maintenance. Want to concentrate just in the TMC/Museum district area for the moment. Also am a newbie to the area and real estate in general. Hence want to learn through joining clubs, books, networking etc., If some benovolent soul would be my mentor, and trust me on my word that I would never, ever become their competitor - would be grateful! Of course I'd volunteer my time in the process.

"If the seller could sell it for more, why give it to you for a discount?" - I have no idea why, except what I saw in the short time I was at the Family Law Center. Quite a few of the properties were going for the asking price, as well as some which was not even bid for the minimum price and were reverting to the county. I do not know if other liens could be on a tax sale property, but thought that a tax sale wipes out all other liens.

[TonyH]

Thank you HoustonRealtor, gnu and gwilson for your input. The RICH club seem interesting and has a track record.

TonyH: Thanks for the suggestion to define investment goals. My goal is not to flip, rather to buy, do minor repairs and hold for a while. Also, I'd like not to invest anymore money than the initial downpayment (or purchase price in the case of tax sale) and for the property to yield positive cash flow after paying for mortgage, insurance, repairs etc., Am not a very handy person so would rely on contracting out maintenance. Want to concentrate just in the TMC/Museum district area for the moment. Also am a newbie to the area and real estate in general. Hence want to learn through joining clubs, books, networking etc., If some benovolent soul would be my mentor, and trust me on my word that I would never, ever become their competitor - would be grateful! Of course I'd volunteer my time in the process.

"If the seller could sell it for more, why give it to you for a discount?" - I have no idea why, except what I saw in the short time I was at the Family Law Center. Quite a few of the properties were going for the asking price, as well as some which was not even bid for the minimum price and were reverting to the county. I do not know if other liens could be on a tax sale property, but thought that a tax sale wipes out all other liens.

The seller of the tax sale should be providing a clear title and title insurance (free of other liens) I would imagine. Although the concept has interest, I am afraid that in situations like these you can never be sure what you're going to end up with (i.e. potential repairs needed, condition, etc.). Just because it is cheap, doesn't mean it is good. (Unless you have the time and ability to go inspect the properties before the tax sale). In fact, paying something extra for quality may be cheaper in the long run.

I remember a couple of years ago in the Los Angeles county tax sale someone bid 225K (or so) for a parcel and it ended up being just a parking spot! No house, no lot either, just a parking spot!

On your goals: I think -and again I may be biased from my own investment goals- given that you said you don't have a handyman's touch, focus on turnkey properties, no older than 5-7 years (brand new from builders even better), that require no maintenance (usually) and spend your energy in maximizing their cash flow and selecting good tenants (that probably is the most important step). If you achieve that, the property will basically be on autopilot [book recommendation, ISBN: 047178978x]. I have tenants that I do not speak to for months at a time. They deposit their rent in the bank every month, my houses are new[er]=no maintenance, so there never is a reason to communicate with them other than say the occasional 'how are things' :-)

Having said all that, take a look at my properties for sale at http://tx.pcfproperties.net although not in your desired location, the 'template' can be used for comparing other potential investments when you get to the evaluation step. I believe anything in the 8%+ return rate (like mine; again, possibly biased) is a decent investment.

Based on my experience, residential rentals return more on your investment in the lower end (100-130K) than higher end (150K+) of the price spectrum. Of course a lot depends on the location, target market, etc. By the way, there is a lowest end of the spectrum (25-90K) that may have some good returns, but I am consiously avoiding it because of the overall quality of properties in that price range. My realtor's phrase on them was "you wouldn't want to be in those neighborhoods at night!"

And one final thought: If anybody thinks by mentoring you they are creating a competitor, stay away from them. There are just so many properties out there!

Edited November 2, 2007 by TonyH

[TAK]

if you are new to investing, i suggest looking into the forums and articles at reiclub.com. lots of good info there to help keep you from hurting yourself.

[spiderman]

Thank you HoustonRealtor, gnu and gwilson for your input. The RICH club seem interesting and has a track record.

TonyH: Thanks for the suggestion to define investment goals. My goal is not to flip, rather to buy, do minor repairs and hold for a while. Also, I'd like not to invest anymore money than the initial downpayment (or purchase price in the case of tax sale) and for the property to yield positive cash flow after paying for mortgage, insurance, repairs etc., Am not a very handy person so would rely on contracting out maintenance. Want to concentrate just in the TMC/Museum district area for the moment. Also am a newbie to the area and real estate in general. Hence want to learn through joining clubs, books, networking etc., If some benovolent soul would be my mentor, and trust me on my word that I would never, ever become their competitor - would be grateful! Of course I'd volunteer my time in the process.

"If the seller could sell it for more, why give it to you for a discount?" - I have no idea why, except what I saw in the short time I was at the Family Law Center. Quite a few of the properties were going for the asking price, as well as some which was not even bid for the minimum price and were reverting to the county. I do not know if other liens could be on a tax sale property, but thought that a tax sale wipes out all other liens.

You might have a tough time finding property in TMC/Museum District area that will cash flow, unless you are looking at multi-family (e.g 4 plexes, etc).

The east side (BW 8/Channelview area) is a strong rental market right now (some say the strongest in the Houston area)- Hurricane Rita evacuees, port expansion, local plants are hiring, people make decent money, not a lot of new housing being built,etc. I just bought a house from a distressed seller that borders on Herman Brown park for $68k, will spend about $10-$12k for rehab, the house will aprraise for $95-$100k, I will refinance at 80% and have about $5-$10k in the deal at the end of the day. Plus about $150/month cash flow after management fee.

If you are interested in these types of deals, here are a couple of web sites to check out. Both will help you source the deal, CPS will also manage the rehab and provide property management.

www.luinc.comwww.complete-property-services.com

CPS also has a open meeting the first Thursday of every month where they go through their deal model, etc., I think it is very informative. The president of CPS was also the president of the RICH Club until recently.

I just bought distressed property on the east side for $68k, just started the rehab