Real Estate Investment Analysis: Waco, Texas

Overview

• Presenter: Brandon
• Objective: Analyze a potential real estate investment in Waco, Texas, specifically a small multifamily property.
• Platform: Instagram recording for educational purposes.

Property Search Process

• Website Used: Realtor.com
  • Search filters applied: Location (Waco, Texas), Property type (Multifamily), Excluded pending/contingent listings.
• Initial Observations:
  • Diverse price range: $239,000 to $750,000.
  • Focused on a property priced at $280,000.
  • Key feature: separate water meters for reduced landlord utility expenses.

Property Details

• Location: Cougar Ridge, Waco, TX.
• Type: Single-story brick duplex.
• Layout: Two units, each 3-bedroom, 2-bath, with two-car garages.
• Amenities:
  • Open floor plans, laundry hookups, fenced backyard.
  • Proximity to Lake Waco Trail.
• School District: China Springs ISD.

Financial Analysis

• Tool Used: BiggerPockets rental property calculator.
  • Calculators: Rental property for buy and hold.
• Key Inputs:
  • Purchase Price: $280,000.
  • Taxes: Approximately $6,000.
  • Closing Costs: $4,000.
  • Repair Costs: Estimated $2,000.
  • Loan Details: 20% down payment, 4.5% interest rate, 30-year term.

Rental Income Estimation

• Tool Used: Rentometer
  • Average rent: $1,283, Median rent: $1,350 for 3-bedroom units.
  • Projected rent: $1,300 per unit.
• Expenses:
  • Insurance: $800 annually.
  • Tenants responsible for utilities (water, sewer, garbage, electricity).
  • Lawn care not included.

Financial Projections

• Monthly Income: $2,600
• Monthly Expenses: $2,384
• Cash Flow: $215/month
• Cash-on-Cash Return: Below 12% target.
• Alternative Purchase Price Considerations:
  • At $230,000: Cash flow $417/month, 9.6% return.
  • At $210,000: 12.47% return, more favorable.

Investment Strategy

• Negotiation: Consider offers between $210,000 - $230,000.
• BRRRR Strategy: Potentially more favorable for better deals.
• Market Appreciation: Consider long-term profit projections.

Final Considerations

• Strategy: A numbers game; multiple offers might lead to acceptance.
• Documentation: Use BP calculator reports for negotiations or partner discussions.

Conclusion

• Feedback Request: Engage with content on social platforms.
• Personal Note: Brandon shares a family moment (snickerdoodle cookies).

Follow Brandon

• Instagram: @BeardyBrandon
• BiggerPockets: Follow for more real estate insights.