Published on 18 Nov 2016 | 2 months ago
Yee Ha! Don't mess with Texas! Last week we were in Houston, Texas visiting a potential property acquisition. This property was a 222 unit apartment complex located in the Northwest portion of Texas. It has been vacant for the last six months when the bank took it over. The prior owner was an absentee landlord who neglected the property, and ran it to the ground. Shortly after Hurricane Katrina, hundreds of thousands of refugees from New Orleans came to Houston to reside. FEMA provided funds to local Houston apartment owners to house these victims. They stayed here in the complex we visited. However, they brought along with them tons of violence, criminal activities, drugs, and other problems to the area. The owners of these low income apartments in Houston milked the government and these tenants for what they were worth. Almost every unit of this property will have to be gutted. We have to determine if this cost is worth it in the long run or if the property would be better razed to the ground. The surrounding area is very poor and dilapidated. Our mentor Adrian Goldstein accompanied us on this trip. He walked through many of the units and pointed out different issues that were of concern.
We talked to the local police department and received good and bad news about the area. The good news was that the immediate surrounding area has improved dramatically over the last few years. We verified this with the police reports at the Houston Police Department website. The bad news is that the area is still very rough. There are a myriad of vacant shopping centers. This is not a good sign. The local economy has been hit hard. However, according to this article the area has become much better. Take a look at this news real about De Soto: VIDEO
Some of these pictures are of the adjacent apartments and condominiums. The owners are in numerous lawsuits with the city. Eventually, we hope these blighted projects will be razed and we have heard that they will be replaced with a nice green park area.
Today we went to three other large C and B class apartment complexes that are currently for sale. One of the complexes consisted of 64 units. We liked the surrounding area of this one. There were plenty of beautiful condominiums and homes in the surrounding area. Also, all of the retail stores in the area were occupied and busy. There were not too many vacancies. There were a lot of national tenants which show the area's strength.
The property that we liked the best was a 400 unit complex. The area that it was in was in great shape. There were plenty of local employers in the area along with lots of apartment buildings that were well ept. This property was bank owned and already has multiple offers on it. We will be doing more due diligence to see if we will further pursue it.