I have stumbled upon a unique opportunity for our investors. If you have ever wondered how a foreclosure auction works read on and if possible join us at the Hilton Houston Westchase, Saturday December 20th, 1pm. The auction is being hosted by Hudson & Marshall. From what I can tell there will be approximately 100-125+ properties of all property types up for auction.  Read on for more details of how this works and a list of available properties that will be up for auction.

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I’ve had discussions with a few investors here recently who are looking to sink their money into something a little more lucrative then our weakening stock market. I’ve decided to write a post to inform others who may be thinking of investing here locally in the Houston area real estate market. If you are looking for good investments in the Houston area right now I would suggest investigating foreclosed properties, new construction, and/or lease option deals. I’ll tell you why I like each of these options.

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So you want to invest in real estate, and like any smart investor, you want to buy low (and later, sell high). Logical thought process leads you to distressed property: foreclosures, pre-foreclosures, estate sales, and so on.

Getting Started

A quick google search for distressed real estate statistics reveals the following: bank foreclosures (REO) and short sales account for at least 15%–and up to 30%–of the homes sold in August of 2008. Why such a broad range? Well, foreclosure stats are inherently difficult to track - homes fluctuate in and out of foreclosure status as banks and homeowners negotiate last-minute repayment terms. By the time property becomes bank-owned (referred to as REO), it may have been reported as a foreclosure two, three, or more times. Short sales are even more difficult to track: county tax records do not recognize short sales, and most Realtor Multiple Listing Services do not yet include a short sale designation. Continue Reading »

With declining mortgage options for credit challenged individuals, our company seems to be running across more and more of these types of investment opportunities lately and we are in need updating our lease option investors list for notification purposes when these opportunities arise.

A lease option is a low risk/medium return investment that is very hands off from an investors standpoint. The properties are typically brand new single family builder inventory homes, or on rare occasion resale homes. This program is a win win for all parties involved in the transaction. The buyer gets into the house they really want and works towards purchasing the home, and the investor get an instant tenant who has a vested interest in taking care of the property with decent cash flow. These type of deals average @ a 50% - 100%+ cash on cash return with @ a 10% cap. For a complete explanation including advantages and disadvantages to this program please click here

Typical numbers for this type of deal:

Market Value: 170k

Investor Purchase Price: 145k - Typically 10% -15% Discount

$1600 per month rent, 2 year lease

$3000 option deposit from the buyer/tenant - refundable if the buyer/tenant purchases the property

$1600 lease security deposit from the buyer/tenant plus first months rent upon move-in/closing

All deposits refundable to buyer/tenant upon purchase, option deposit goes to investor if buyer doesn’t purchase and the lease security deposit is subject to the terms of the lease

If this type of deal interests you or you would like further information the please email Jeremy at larkin@houstonicon.com and I’ll answer your questions and add you to our list of lease option investors. Once we post these investment opportunities we will take the interested investors on at a first come first serve basis.