Posted by Jimmy on April 09, 2006 at 14:17:09:
first, forget Austin. negative cash flow is norm. reslae values are high and rents are low in comparison. San Antonio is much better, from a cash flow point of view.
I own TX properties anywhere from 75 years old to 10 years old. Nominal age is less important than effective age. How old is the electrical? how about the plumbing (and I mean the heavy stuff–freshwater lines, sewer lines). Condition of roof and decking? are your rooflines straight, plumb and square? Is the foundation solid? Are the subfloors solid or spongy? Old rotting windows or newer double-paned insulated ones?
Think of the house as a collection of things you may have to fix or upgrade. if the 1950-era wood siding has recently been replaced with vinyl siding, your house is younger than its year of construction.
With all that said: here is my sermon on TX cash flow properties, to be held for the longhaul:
never buy retail. never buy finished projects. you will pay top dollar adn get minimm cash flow.
look for rehab opportunities. the same line of thinking that produces rehab/flip profits ALSO produces MAXIMUM cash flow. example: Wold you rather pay 65K for a nice 3/2 house renting for $750, or would you like to buy that same house for 31K, put 12K in it, and get the same $750???
If you buying from out-of-state, you will probably need to bite the bullet and buy soem finished ones to get started. But be on the lookout for rehabs, and start assembling your crew.
In the long run, you will be far ahead if you can put together a crew which can finish off projects for you,