Investors
Investment Prospectus
Bryan/College Station Real Estate
Provided by
Trevor Moran – Texas REALTOR
B/CS Investment Specialist
College Station, Texas
A Global Crossroads in the Heart of Texas
Nothing defines a city better than its people. College Station Texas, home to over 67,000 residents, is the largest city in the Brazos Valley. When combined with Bryan and other smaller townships in the metropolitan area the population exceeds 152,000 people.
Most widely known as the home of Texas A&M University which is the third largest public University in the nation, a world renown research institution and member of the Big 12 Conference; Texas A&M University brings a diversity of race, culture and spirit with unmatched tradition and excellence.
Less than 100 miles from Houston or Austin, and within 200 miles of Dallas and San Antonio, College Station is within 4 hours driving time of more than 14 million people. The College Station regional airport has several daily flights to Houston and Dallas airports.
Quality Resources for Quality Living
One of Texas Top 10 school districts, College Station ISD was named a Blue Ribbon School District by Expansion Management Magazine, and Newsweek listed A&M Consolidated High School as one of America’s top 100 high schools in the nation. College Station also features the George H.W. Bush Presidential Library and Museum, one of the regions most popular attractions with over 700,000 visitors to date.
Safety for Students and Families College Station is also one of the safest and most family friendly cities in Texas. College Station consistently maintains one of the lowest crime rates in the state, giving peace of mind to residents, students, investors, and other business owners.
Real Estate as an Investment in the Bryan/College Station Area
While the College Station Area is unique in many ways, one of the most beneficial for real estate investors is the makeup of its residents. The combination of the size of Texas A&M University as well as Blinn Junior College make for approximately 60,000 temporary residents. Close to 1/3 of those living in the B/CS area need temporary housing (less than 5 years).
Most of the students attending Texas A&M University or Blinn junior college do not live in student dormitories, and students who start their college career living in dormitories usually end up seeking off campus housing for many reasons.
2 Scenarios
If you have a child that attends college for an average of 5 years, at $300– $400 dollars a month in housing costs, you could spend between $18,000 and $24,000 in rental costs alone. Purchasing an investment property while your child is in college is a smart way to recoup some of the college expense, by building equity in an investment property, instead of spending thousands of dollars on rent without any return on your investment.
The opportunity to maximize your investment is even larger for those investing without the rental expense of a child, or for those who hold the investment property purchased while their child was in school. Many properties can become cash flow positive (additional money beyond your mortgage payment) from rental income. Obviously the cash flow potential becomes larger with a larger down payment on the property.
Know your Customer
Who will want to rent my property ? Investment properties need to be considered on a case by case basis. Some properties are made ready for student housing by the builder, come with new home warranties, and have many extra perks. These houses are more expensive to purchase and have smaller cash flows (although anything can have a positive cash flow with a large enough down payment). Other properties are better deals in initial cost, but will have more maintenance costs and may not be able to fetch the higher rental prices. Another point to remember is that temporary student housing is just that - student housing.
Students are not looking for the same amenities as families. Whereas families often look for ideal floor plans or many large bathrooms, students are more concerned with other factors, especially one obvious to those familiar with real estate….location, location, location. And in an area such as Bryan/College Station that could mean, close to campus, close to hotspots, or close to other students.
Financing Real Estate Investments
The many options and variables involved in Financing an Investment Property could quickly become to detailed to make this section valuable, so we will paint the financing picture with a wider brush hitting some of the basic numbers you can expect as well as some points of emphasis that ease the transaction.
Single Family Dwelling (SFD)
One Lease Agreement. Down Payment as low as 0%
Closing Costs: ~ 3%
Multi-Family Units (MFU)
More than one Lease Agreement. Down Payment as low as 5%
Closing Costs: ~ 3%
Use Local Brokers and Services
For a quality transaction use a lender local to the area in which you are purchasing an investment property. Local lenders are more familiar with the area, and know appraisers, and surveyors which also know the area and market. Many times when a out-of-market lender gets and appraisal done it is highly inaccurate due to unfamiliarity with the area. It is also important that your Investment Real Estate Agent be able to communicate with your lender, face to face if necessary.
The Mortgage Brokerage market is an ever changing place, and lenders can become very busy. In the event that an issue arises with your transaction, a face to face conversation can iron out the problem much quicker and more effectively than a phone call or email.
Tax Benefits
Due to the complications with the Tax Code and a licensed realtors inability to provide a client with legal or tax advice related to real estate investments, it would not be prudent to discuss the various benefits associated with purchasing rental property as an investment from a tax perspective. It is recommended that you speak with your accountant to discuss deductions and benefits of owning a investment property, and discuss with your attorney setting up an investment property as a Limited Liability Company (LLC) for several reasons, including protection against legal action from a tenant.
Estimated Maintenance Costs and the Property Management Solution
It is impossible to completely hedge risk with any investment, and predicting the maintenance costs for a property constitute the largest portion of risk with a real estate investment. However there are several factors that go into predicting a reasonable dollar amount for annual maintenance costs.
Some of these factors are listed below:
Age of Property
Maintenance Records
Home Warranty
The Home Inspection Report
The Property Management Option:
If you have neither the time or desire to manage your property in a hands on manner, Property Management is an effective way to take a hands off approach to your investments, while still having the peace of mind knowing that property management professionals are just a phone call away for your tenants.
An Overview of the Purchasing Process
Below is a breakdown of the purchasing process and who is responsible for each step…
1) Loan Pre-Approval: Buyer’s Responsibility.
- It is very important, when considering the purchase of Investment Properties, to speak with a banker or mortgage consultant about your financial status, and viability of obtaining an investment loan.
2) Finding a Property: Agent Responsibility.
- Once the type of Investment Property has been determined, it is the duty of the agent to find the best possible property that fits the parameters you specified.
3) Submitting the Contract: Agent Responsibility
- Once the buyer decides they would like to make an offer on a property, it is the responsibility of the agent to write and present the contract to the sellers agent (must be approved and signed by the buyer)
4) Negotiations: Agent Responsibility
- Agent and Client will confer on the terms to be offered in the contract and the agent will negotiate these terms with the Seller’s Agent. The buyer need not have contact with the Seller’s Agent, or the Buyer’s Agent with the seller.
5) Receipt of the Contract: Agent Responsibility
- After a contract has been agreed upon and signed by both parties, the agent will take the signed contract and the earnest money to be held in escrow by the title company.
6) Inspections: Agent/Buyer Responsibility
- It is technically the responsibility of the buyer to set up the inspection, but this is not a very plausible solution. It is usually best for the agent and the buyer to agree upon which inspector to use. The agent will then set up a time to meet the inspector and allow the inspector to gain access to the property. It is best for the buyer to be present at the inspection, but when this is not a viable solution, a copy of the detailed report is provided to the buyer by the buyer’s agent. In Texas, contracts contain an option period, where 7-14 days at a non-refundable fee (between $50 and $200) the buyer can ask the seller to 1) Adjust the price of the property based on items reported in the inspection. 2) Make arrangements and pay for repairs on items mentioned in the inspection report. 3) Void the contract and be reimbursed the earnest money.
7) Survey: Agent/Lender Responsibility
8) Appraisal: Agent/Lender Responsibility
9) Title Policy: Title Company Responsibility
10) Loan Docs.: Agent/Lender/Title Company Responsibility
11) Set Closing Schedule: Agent Responsibility
**Agents are paid at closing by the Selling Agent. I do not charge a fee or commission from the buyer when working as a Buyer’s Agent.**
Contact Information:
Trevor Moran - Realtor/Agent
Cell: 979-209-4943
Fax: 832-565-1061
Email: trevormoran@gmail.com
Website: http://trevormoran.net