Homeowners who are delinquent on their mortgage provide an opportunity for investors

Homeowners are delinquent on their mortgage provide an opportunity for investors!

There are still 1.5 million borrowers who are seriously delinquent or have late-stage delinquencies at 90 days or more past due on their home loans, according to the June Mortgage Monitor report from Black Knight.

While the national delinquency rate is at its lowest level since the beginning of the pandemic, about 1 million homeowners are expected to be in serious delinquency as September’s wave of mortgage forbearance program expirations begin, the report showed.

The economic recovery is expected to slow down even more as more Americans fall behind on their mortgage payments, and fewer can afford to purchase homes. The housing recovery will be delayed as banks tighten their lending standards. 

What is the difference between default and delinquency?

Delinquency means that you are behind on payments. Once you are delinquent for a certain period of time (usually nine months for federal loans), your lender will declare the loan to be in default. The entire loan balance will become due at that time.

How did we get here?

One of the most difficult things about owning a home is taking care of your financial obligations. If you’re not making your monthly mortgage payments, you’re considered delinquent. In the past decade, this has been a problem for a lot of homeowners. In total, about 1.5 million homeowners are delinquent on their mortgage payments. This is a problem for the investors, as the value of these homes goes down because the homeowners can’t afford to pay their mortgage. It’s a frustrating situation for everyone involved.

The 90–day delinquency rate is a measure of serious delinquencies. It captures borrowers that have missed three or more payments. This rate measures more severe economic distress. View this link to learn more and view interactive charts:  https://www.consumerfinance.gov/data-research/mortgage-performance-trends/mortgages-90-or-more-days-delinquent/

What you need to know as an investor

Per MarketWatch (https://www.marketwatch.com/story/one-subset-of-homeowners-could-be-in-trouble-here-are-the-real-estate-markets-most-at-risk-11625591292):

Any homeowner who isn’t able to sell their home or modify their loan is likely to face foreclosure or other financially challenging options, such as a short sale, the researchers warned. Whether a homeowner leaves their home by choice or through foreclosure at the end of all this, it will have the effect of adding supply to the market they live in.

“As a result, a buyer’s market could develop in ZIP Codes with heavy exposure to such borrowers,” the researchers wrote, noting that these would be areas with a high concentration of FHA loans in delinquency. So which markets are most at risk?

Atlanta tops the list, with 17.4% of the city’s mortgages in delinquency as of May. The city also has a large share of FHA loans overall, with those loans representing over a fifth of all mortgages in the city.

Many of the metro areas most threatened by such a scenario were located in Texas, including Houston (No. 2), Dallas (No. 4), San Antonio (No. 8) and Ft. Worth (No. 9).

Should you buy a distressed property now?

If you’re planning to buy a distressed property, now may be a good time to buy. Just make sure you’re aware of the risks and understand what you’re getting into.  Distressed homes offer a unique buying opportunity for real investors, but the average home buyer should probably look elsewhere. 

If you need funding, apply now. I am working online with the rest of you.  

Patrick St. Cin

W – 512-213-2271



Photo by Public Domain Pictures on Pexels.com

Diamonds are not forever but Real Estate Is … Make Wise Investing Choices!

Would you ever think to compare diamonds and real estate? At first glance, they seem like two completely different things.  However, they are both hard assets that are cost-prohibitive to acquire for the average US worker.  However, you can sell both “assets” quickly and not realize their full value in the marketplace.    Let’s first compare the similarities and then differences from an investment perspective.

Real Estate is a better long term investment than diamonds


Hard Assets:

  • Both Diamonds and Real Estate are Hard Assets similar to other commodities
  • Negatively correlated with bonds and stocks, so when stocks crash both appreciate in value

Long Term Investments

  • Suitable for investors who are not looking for fast returns on their investment
  • Risk losing money if you try to “flip” your investment too early or didn’t acquire at the right price below market value

Additional Utility

  • Provide the investor with enjoyment and value
    • Diamonds are pretty to look at and make the person or people associated with the diamond have better social value 
    • Real Estate provides rental income and in the case of short-term rentals – owners can enjoy the property and generate revenue when not in use.


As investors, we all know that not all hard assets, such as real estate or diamonds, have the same return on investment.  In fact, ROI performance varies greatly even among real estate classes:  residential property, commercial real estate, agricultural property, etc.  Financial crises prove time and again that real estate is a highly volatile asset.   Diamonds are a closed market that is stable and less risky.  However, there are still differences among the rate of returns on diamonds such as the colored diamonds are less risky.

  • Maintenance Fees
    • Diamonds don’t have a maintenance fee … you’re ROI is based on the price you paid upfront for the diamond
    • Real Estate requires maintenance and repairs and possibly property management fees.  All these factors need to be carefully considered before acquiring property and affect your return on investment.
  • Portability
    • Several millions of dollars can fit in your fist and transport in a pocket … the irony for not being the rarest stone they have the highest size to value ratio of the natural resource category.   This is how historically (since the silk road trail) wealth was transported long distances and across borders.
    • Real estate can’t be moved. Real estate is not physically portable and the value does not transfer easily either.  However, 1031 exchanges are a great way to transfer appreciation as you sell your property.

At REI Capital Resources, we prefer real estate investing to diamonds.  In fact, diamond prices are extremely volatile – shooting up 249% from 1978 to 1980 before falling 77% by early 1986 – but the value of diamonds has also long been propped up by a number of artificial sources.   Real estate can be utilized and provide rental income.  As the number of cloud and work from home startups rise, commercial real estate is increasingly valuable to investors to provide “server farms” to meet bandwidth demands.

We are not saying diamonds aren’t valuable or important – especially as emergency currency and making your future or current spouse a little happier this valentine’s day.  We’re saying don’t buy a diamond as an investment with the idea of retained value.  If you look at diamond prices since the 1970s, there has been “Too Much Price Volatility & Demand Uncertainty To Be Considered Investable” by numerous sources.  Also, the use of diamonds as a symbol of a woman to be married is only about a 100-year-old custom.  There are numerous other stones considered rarer.  Thank you, Madison Avenue for making weddings a thing to save money for and cause the intelligent investor to consider generating a new stream of revenue.

We love this quote by Milton Friedman, “The speculator is looking for hidden weak spots in the market,” and acts as “the advance agent of the investor, seeking always to bring market prices into line with investment values.”   Diamonds don’t provide an adequate hedge against inflation, and most people would be better off with more practical financial planning, than investing for catastrophe purposes.  The diamond while a modern symbol of one’s love and commitment to another is expensive and ranks low when compared to value stability.

Diamonds vs. Gold vs. S&P 500

YearGold ROI  %Diamond ROI  %S&P500 ROI  %

*Data courtesy of the Rappaport Diamond Index, Kitco, the World Gold Council and Yahoo Finance. Diamond prices reflect monthly averages based on a 1-carat diamond. Gold prices are based on average annual London PM fixed prices. S&P 500 prices reflect average monthly adjusted closing prices. ROIs are cumulative.

The chart shows when the stock market suffered historic losses, diamonds at best served as a short-term hedge and very quickly fell behind the returns of alternative investments.

Therefore, I would recommend a 3 bedroom house that generates a positive return on investment that you can set aside the money after a year to buy your sweetie her diamond.  If she loves you, she’ll wait a year knowing a diamond is coming.

Migration Boom

People are moving. Single-family houses in the suburbs are opportunities real estate investors should consider.

According to an article in Mansion Global, apartment living in densely populated urban areas is already losing its appeal to Americans as they process their experiences during the coronavirus pandemic. Many people are eyeing options for relocating to the suburbs and a single-family home after facing the challenges of coming into contact with infected individuals in apartment building common areas and restrictions on their use of outdoor spaces like pools and game rooms.

Buyers crave —ROOM— living space, outdoor space, privacy, flexibility, and safety.

When you are researching a purchase of a rental property, evaluate:

  1. Is there room for an office in the house?
  2. Does the house have a good-sized yard?
  3. Is there a pool in the backyard?
  4. Is there a deck or porch that offers a sheltered option to living indoors?
  5. Is the neighborhood safe to walk around in at night?
  6. Is there a neighborhood association and is it restrictive?
  7. Did local authorities try to restrict people’s use of their yard during the pandemic?
  8. Consider taxes. People are richer in states where taxes are lower.
  9. Big or tiny, single family homes in suburbs near major cities offer good opportunities for people to escape living in densely populated apartment buildings where entrances and recreation space is shared and access is restricted. If you need funding, apply now. I am working online with the rest of you.

Patrick St.Cin

W – 512-213-2271

M – 505-239-3026



graphic:tsca / CC BY-SA (http://creativecommons.org/licenses/by-sa/3.0/)

Investing in Apartments – Commitment and Study

Even in the coronavirus pandemic crisis investing in rental apartment property can still be a good way to add thousands of dollars to your income in the long term. If you buy apartment real estate that is in a good location with growth potential, but that is not too expensive, this real estate investment will likely recover after the crisis passes according to (Brad Hunter, Forbes.com). However, the investment takes funds and commitment over the long haul.


There are two way to make money from rental real estate. The first, appreciation, is a rise in value over time. This profit can only be realized by reselling the property after some time has passed or after you have made upgrades that add to the value. Generally, real estate appreciates in value over time if you are in the right location. Be sure to study employment and home buying trends in your local area before purchasing rental property.

Cash Flow & Coronavirus

You can also make money in the form of cash flow by collecting rents as income. The coronavirus pandemic is affecting the apartment rental real estate industry because many people, more people than we have ever seen before, have lost their income in only a few weeks, unemployment claims are up all over America, and tenants may not be able to pay their rents for the next couple of months. This will impact the ability of landlords to make money. Either the landlord forgives the rent and eats the loss for a while to keep the tenant, or the renter is evicted, and the property becomes vacant. In either case, the landlord is not receiving income on the property and may have to seek forbearance from their own lenders.

If a landlord has paid off his or her own mortgage on the property or if he or she has established an emergency fund as Dave Ramsey suggest (daveramsey.com), they will be able to weather the storm caused by the jobs lost in the pandemic shutdown.

Jobs and Renting

Either the jobs come back after the danger from the virus is past and businesses reopen, and the renters stay, or a new set of renters materialize because those people who are no longer able to afford their own homes move to apartments and construction of new homes slows because of coronavirus-driven delays caused by labor shortages, and supply shortages. More people may need to rent. In this case. It is likely the landlord’s income will return after some shaky months.

Photo by Michael (Black) Ritter on Pexels.com

Asset Rebound

Because the income potential should rebound, rental apartment property should not lose its value overtime as an asset. If the building itself remains sound, there is no reason why the property value will not increase as other investments tank and real estate once again looks solid and reliable compared to stocks. Also, if interest rates remain low, investors will be willing to take on more debt and are not restrained from purchasing property at higher prices. This will help investors who plan to sell their rental properties make a profit.

Single-Family Rentals

Investments in single-family rental homes may also benefit in the long run as more people work from home and need more room than apartments afford. Brad Hunter also suggests in his article on Forbes.com that the single-family-built-to rent-industry may benefit as people need that specially designed home office space with its own door and bathroom.

Due Diligence

Investment in rental real estate should remain attractive but be sure to do your due diligence.

Study everything from location, jobs, virus hotspots, distancing trends, supply chains, virus rebounds as they occur, and what the kids are doing now.


Dave Ramsey online at https://www.daveramsey.com/blog/how-to-invest-in-real-estate

Forbes online: https://www.forbes.com/sites/bradhunter/2020/03/24/coronavirus-impacts-on-real-estate–why-you-need-to-think-short-term-and-longer-term/#6f2133345f6f

Investopedia, The Impact of Interest Rates Changes by the Federal Reserve. https://www.investopedia.com/articles/investing/010616/impact-fed-interest-rate-hike.asp

We have funds available so let us invest in something together.

I would be pleased to have you call or e-mail too.

Patrick St.Cin

W – 512-213-2271

M – 505-239-3026



REI Capital Resources is in accordance with the Federal Equal Credit Opportunity Act, REI Capital Resources employs business practices that promote fair lending and will not tolerate discrimination relative to borrower race, color, religion, sex, handicap, familial status, age, national origin or ancestry. REI Capital Resources fully supports the letter and spirit of these laws and does not condone discrimination in any mortgage credit transaction.

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Multi-Family Rentals Are Real

As the stock market dips and dives and quivers and stock market investors peer into the fog of the future trying to see where tariffs will take the economy, real estate stands firm, on a block, in a neighborhood, around the corner from this school or that office park, providing shelter to human beings.


An investment is not safe though if you do not do your research and match the facts of the property and area situation with your needs, expectations, and goals. You might end up holding on to a property you would like to fix and sell quickly or find yourself with a rental that is more outgo than income. When considering investing in multi-family properties, be sure to pay close attention to these things:

  • the parking situation,
  • the safety of the neighborhood,
  • the quality of property management,
  • and to the location.

Multi – Family Property Class A
Properties are above average in terms of design, construction and finish; command the highest rental rates; have a superior location, in terms of desirability and / or accessibility; generally are professionally managed by national or large regional management companies.

You will pay more up front and have less to fix, but have income potential right away.

Multi – Family Property Class B
Properties that do not possess design and finish reflective of current standards and preferences; construction is adequate; commands average rental rates; generally are well maintained by national or regional management companies; unit sizes are usually larger than current standards.

Be prepared to make some repairs, do some remodeling and updating as tenants move out to keep the apartments occupied.

Multi – Family Property Class C
Properties that provide functional housing; exhibit some level of deferred maintenance; commands below average rental rates; usually located in less desirable areas; generally managed by smaller, local property management companies; tenants provide a less stable income stream to property owners than Class A and B tenants.

You will have to do more hands-on work with this class of property to handle the repairs and tenant turnover; but if you like hands-on involvement, there will be plenty of opportunities to employ your carpentry, plumbing, electrical, social, and bookkeeping skills. You might find some great deals.

Let me know if you have found any deals this month that you know you can turn around and resell or rent. I hope that I can be of help to you this month.
I can be reached at

Austin, Texas


Thinking Like Your Buyer: The Joneses?

The Neighborhood

As part of your regular routine, before you invest in a house to fix-n-flip, you will be researching the after-repair value, figuring out what price the house will sell for after it is remodeled, and how it fits in with the other houses in the neighborhood. While you are doing this, picture your buyer. Are they young and first-time home buyers? Do they have children? Are they older and downsizing?

If your buyers take the advice of  Investopedia’s “How to Buy Your First Home” a tutorial by Amy Fontinelle, they will want to pick a neighborhood that is a close fit to their own lifestyle so they will feel at home with their neighbors. They can find facts and statistics about a neighborhood’s average income and college educations on websites, forums, and neighborhood message boards, places you will want to look too.

Pressure to Spend
Like professional landscaping and groomed yards, expensive vacations, weekly maid service, landscaping contractors, cosmetic surgery, boats, restaurant-quality kitchen appliances, certain types of vehicles, and country club memberships can put pressure on people who live in neighborhoods that encourage conspicuous consumption. To be frank, will your buyer feel comfortable or will they feel pressure to keep up with Joneses who live next door if they come to live in the neighborhood where your fix-n-flip project is located?

“Stop Keeping Up With The Joneses – They’re Broke.”  Investopedia, (2014)

Lisa Smith, the author of the article, “Stop Keeping Up with The Joneses,” reminds us that spending money for the sake of flaunting your wealth, once something only done by celebrities, has come to suburbia, and to regular neighborhoods all over the world, but not necessarily for the good of their financial or their blood pressure.


white cruise ship on the sea

Photo by GEORGE DESIPRIS on Pexels.com

So, if you are remodeling a modest house, it might be best to find one in a neighborhood that is not extravagant about spending for the sake of the modest buyer who might buy your modest house.  This will speed up your investment turnaround.

It is true that you cannot always pick the house and neighborhood where the greatest deal pops up, but remember, you only get your money out of the house, if you sell it; and, if you are going to invest your money, time, and credit into a house to resell, be sure you can sell it to a real person in as short a time as possible.

Please give me a call when you find that perfect investment in the just-right neighborhood. I am still focused on funding your success and I have more tools than ever to work with.

Patrick St.Cin



Cruise Ship: Photo by GEORGE DESIPRIS on Pexels.com

Smith, Lisa, Stop Keepng Up With The Joneses – They’re Broke , Investopedia 

Fontinelle, Amy, How to Buy Your First Home: A Step-By-Step tutorial, Investopedia

Thinking Like Your Buyer: Restrictions

As a real estate investor, contemplating houses to buy and remodel, or to fix-n-flip, you need to think like the house buyer you hope to sell to. It is important to do this before you buy an investment property to protect your profits from withering away while the house languishes on the market. Of course, deals come when and where deals come, and you often have to move quickly to snap up the bargain. Under this pressure, it a very good idea to take a breath and research the neighborhood before you commit.

I was actually thinking about real estate sales and roads when I found this tutorial on buying your first home in the online journal Investopedia.com.  But Amy Fontinelle’s tutorial caught my attention with her discussion on neighborhood associations and deed restrictions. The tutorial offers first-time buyers a sensible and interesting mix of things to look at when purchasing a house. As real estate investors planning to buy houses to resell, you need to think like your buyer too.

Neighborhoods Have Rules: Some are Written Down

First, she tells first-time home buyers that different neighborhoods have different characteristics and that you want to pick one that is “the closest fit to your lifestyle and personality.” One of the items she recommends first-time buyers think about is whether there are restrictive covenants in the neighborhood. I hope as I write this that you will not be able to tell whether I am a free-wheeling renegade or a neatnik appreciative of boundaries and rules. Here goes.

Neighborhood associations can be a friend or a nemesis to your buyer. They can impose maintenance requirements on the home owner or forbid certain adornments. As Ms. Fontinelle says, “You might not be able to leave trash cans out past a certain hour on trash day, paint your house blue, or let your grass grow too tall.”

Get the Whole Story

Facts and statistics about the neighborhood are available on real estate websites, but to get the whole story, you may need to talk to the current residents, walk the neighborhood, and visit local Facebook groups. Once you have found out about the neighborhood, ask yourself, who do I think is going to buy this house I am investing in. You need to use your imagination because your buyer may be very different from yourself and have different tastes. Can you picture them and sell a house to them with genuine enthusiasm?

Backyard Chickens and Pit Bulls

When you look at the property you are about to invest in do you picture a buyer who is a bit of an urban farmer who likes freedom and won’t mind a community garden next door and may want to raise backyard chickens, walk a pit bull on a leash, and grow wheat in their front yard?

Are you finding that the neighborhood is so exclusive and restrictive that you are having trouble imagining who would want to live there? As Ms. Fontinelle reminds us, many people appreciate the restrictions and like the tidier appearance that may boost property values.” Others she says, “Find them obnoxious.” Here are a few things to consider:

Are sheds and outbuildings forbidden?

Are you allowed to pasture a cow or a horse?

Are the yards meticulously manicured?

Do the neighbors have extensive gardens?

Is curb appeal a big deal or do the neighbors find the house with a big garden intimidating?

Are pets allowed?

Resales and Loan Request: Why it Matters

As the fix-n-flip investor, these restrictions matter to you in two ways: (1) will you be able to sell the house eventually, and (2) how will these restrictions impact my project’s expenses and loan request?

Let me know if you have found any deals this month that you know you can turn around and resell with enthusiasm. I hope that I can be of help to you this month.

I can be reached at
Austin, Texas

Investopedia.com How to Buy Your First Home: A Step-by-Step tutorial. Amy Fontinelle



I recently added an Escrow Glossary of Terms to my website. You might want to check it out. The first word is a rather sad one, “abandonment.” Of course, the list is alphabetic. “Abandonment” is an official term in real estate the means the voluntary relinquishment of rights of ownership or another interest (such as an easement) by failure to use the property, coupled with an intent to abandon (give up the interest). This subject is relevant  because in your search for a fix-n-flip project to invest in, you might run into a house that looks abandoned. It may be. It may not be.


Intention to Abandon

According to the Letter of the Law, volume 13, number 4, 1999, by Judon Fambrough, “an essential element of abandonment is the intention to abandon and such intention must be shown by clear and satisfactory evidence.” Judon goes on to say that non-use and failure to maintain and repair property is not sufficient evidence on its own to prove abandonment.

While title to real property cannot be lost by abandonment, it can be lost in other ways. Land title can be lost by adverse possession when another person possesses and uses the property without permission for a specified time. Real property can also be lost by forced sale when a sheriff sells the property for delinquent taxes, a trustee sells the property for delinquent mortgage payments, or a homeowner’s association sells the property for unpaid assessments.

Adverse Possession

On the LoneStarlandLaw.com website, David J. Willis explains that adverse possession refers to circumstances under which one may lawfully lay claim to ownership of property not originally one’s own. Classic examples include the rancher who fences in an adjoining tract and pastures his cattle there for a decade and the family that gradually takes over the empty lot next door.

According to Willis, foreclosed houses are often perceived to be abandoned because they are sitting idle. These houses are not abandoned and the courts have tended, he says, to protect the interests of the absentee lenders who are now owners.

Facts and the Law

Everything about an adverse possession claim must be based on facts and the law. For one thing, to make a legal claim of adverse possession, you have to have a legal description of the boundaries. The boundaries cannot be uncertain. Paying taxes or back taxes on a property does not guarantee possession either if the original owner shows up, it does however prevent the eventual sale of the property in a tax sale. If a title search reveals an owner of record that can be located, it may be better to contact them and buy their interests.

Willis also says, the law is does not condone or contemplate the use of the adverse possession rules as a business plan for aggressive investors. This strategy is involves breaking the law, for example, breaking and entering, file false instruments, slander of the title, and fraud.


If you find a house you think is abandon, fall back on my strategies for finding motivated sellers. Knock.

When you find a home that looks abandoned, one that might be up for sale if you can find the owner, knock on the door. Knock on the neighbor’s door too. If no one answers, ask about what is going on with the property. Leave behind your business card. Write down the addresses and research the property from your computer. Write about the house in your journal of prospects and follow up every month. You can keep an online journal too, photographing the house and making notes to help you remember to follow up.

Remember the door hangar. It can be something simple that you make yourself with a hole punch and rubber band, or something you more polished that you order form an online printer. It should say something like, “We buy houses. Call 512-555-1212.” If no one answers when you knock, leave one of your door hangars.

When you have contacted the buyer and have done your research on the value of the property and know how much it will cost to remodel the property, I can help you with a loan program to purchase. Your fix and flip or rental property. I am happy to announce that a loan program is now available to purchase rental property for the purpose of building your short-term or vacation rental property business.

We have funds available for single-family residential property, condos (warrantable only), and ocean beach front property.

I would be pleased to have you call or e-mail too.


Pat St. Cin



Austin, Texas



LoneStarlandLaw.com website, David J. Willis

Letter of the Law, volume 13, number 4, 1999, by Judon Fambrough

BE AWARE: Part 2

What does a Horny Toad Have to Do with It?

In Part I of Be Aware, I discussed performing a due diligence assessment with regards to past and present environmental hazards in the vicinity of the property you may be considering. In this part, I want to point out another aspect of the due diligence research you do that revolves around the plants, animals, and habitats that may be on or near the property you are considering making a loan on, developing, or remodeling. The animals and plants that inhabit that property need to be accounted for, not only because we value them, but because their presence may affect the dollars we need to spend on a project. As I have said before, hard money loans are offered based on the value of the property. So, you want to look carefully at anything that affects the property value now and in the future.

In Texas

As a landowner, you will be obliged by law to work around habitat or vegetative species that are considered endangered. According to the Texas Parks and Wildlife website, endangered species are plants or animals that will likely become extinct within the foreseeable future. Threatened means that a species may become endangered within the foreseeable future.

In Texas, plants or animals may be protected under the authority of state law and/or under the Federal Endangered Species Act. Examples of federally listed species in north Texas are the black-capped vireo, golden-cheeked warbler, and the Texas poppy mallow. Some of the state listed species are the Texas horned lizard (horny toad) and the Texas kangaroo rat.


The Texas list deals only with the status of the species within the borders of Texas. The Federal listing means that an animal is in trouble throughout its entire range which may cover several different states. Federal law not only protects the individual animal, but also protects its habitat. While TPWD enforces regulations pertaining to state listed species, the U.S. Fish and Wildlife Service enforces regulations pertaining to federally listed species under the Endangered Species Act.

Real Estate as Habitat

In the business of real estate, habitat is the concern. Loss and/or fragmentation of habitat is the number one cause for species declines in Texas. For example, the black-footed ferret is one of the rarest mammals in North America, yet it inhabited prairie dog towns in North Texas as recently as 1963. While prairie dog towns still exist, they are too small and too few in number to support a population of ferrets.

To sum it up, just as you would review the local area of your planned real estate transaction for hazardous concerns that will affect the property, you need to research the animals and plants that live on the property and their habitats that might be nearby.

Don’t forget to look for wetlands and ponds when you walk around the property or when you look at the topographical maps. Working around wetland and rivers requires special permits and special protective construction measures that need to be worked into the cost of the construction or remodeling projects.

A County by County List

Visit the Texas Parks and Wildlife website for a county by county list of endangered and protected species in the area you are planning to work in. Each county’s list can be downloaded onto an Excel Spreadsheet. See https://tpwd.texas.gov/gis/rtest


The Texas Parks and Wildlife Department also offers private landowner tools for things like habitat conservation plans, safe harbor agreements, candidate conservation agreements, and landowner incentive programs at


Remember. I’m not giving legal advice, just pointing out areas you should research  before you buy a property or loan money and put your name on a deed. Be sure to be aware of the physical reality of the property itself.  Look at it in real life and on the internet.



Austin, Texas


Texas Parks and Wildlife website at https://tpwd.texas.gov/

Photo Ben Goodwyn [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/) or CC BY 2.5 (https://creativecommons.org/licenses/by/2.5)%5D, from Wikimedia Commons

BE AWARE: Part 1

When making a commercial real estate transaction, whether as buyer, borrower, or lender, you really need to do your research into the property’s current and past uses and potential environmental issues. Remember hard money loans are offered based on the value of the property. So, you want to look carefully at anything that affects the property value now and in the future.

This type of look around and document is called a “due diligence” assessment. As the purchaser or mortgage holder, you want to compile information and investigate the property you are interested in buying to make sure you are aware of any issues with the property that will affect your financial outcome. And, you want to do this before you buy.

Just as you would look for issues with the property’s title, such as judgments and liens, on the financial side; and on behalf of your future renters and buyers, check out the safety of the neighborhood at night; and again on their behalf, inspect the road for gargantuan pot holes that might eat their Prias or VWs; you also want to look at the property itself and at its current and past uses for your own sake to make sure you are not inheriting any costly environmental issues that you are not prepared for.

Cleanup Will Cost You

Environmental contamination, such as asbestos, PCB’s, radon, leaking underground storage tanks, mold, mildew, and lead-based paints on a property can cause the cost of “fixing” the property to explode so you want to be aware of these situations and prepare for them or walk away.

The official name for the investigation into environmental hazards and liabilities on a site is called a phase I environmental assessment. It determines in a methodical way if there is any environmental contamination or hazards in a building’s region or within the building itself. There are many professional firms out there that do this kind of work and one may have already been done on the property you are thinking about.

Get the History

The environmental site assessment typically addresses the history and current conditions of both the underlying land as well as physical improvements to the property. This assessment would scrutinize the land for soil contamination, the groundwater and surface water for contamination and quality.

It would look at the structure or structures on the property you are buying. Are there abandoned drums of unknown liquids or materials, an unlicensed dumping ground in the woods in back of the house, contaminated water wells nearby, or chemical residues, asbestos, mold, mildew, or other hazardous substances in the basement?


Abestos (tremolite) silky fibers, photo taken at the Natural History Museum in London by Aram Dulyan, public domain, Wikimedia commons.

Neighboring Properties

The phase I environmental assessment would also evaluate if there are contamination risks on neighboring properties that might affect the value of the property you want to buy. Before you invest in the formal environmental assessment, you might want to do a little sleuthing yourself to see if you want to invest even that far  You can start by performing some visual inspections and record searches yourself.

Walk around the neighborhood and take notes on what is nearby, within a half mile or a mile. Are there hazards or attractions in the vicinity?

Review Federal, State, Local, and Tribal records of the property using its GPS coordinates and review the records for properties up to a mile away.

Interview people who are knowledgeable about the property, for example, past owners, current owners, managers, tenants, neighbors.

Fires, Floods, Mud, and Spills

Examine municipal or county planning files to check for prior usage and permits granted and conduct file searches with public agencies, such as the fire department, state water board, county health department. Ask yourself, has a previous building on the site burned down? Why?

Examine historical and aerial photos for previous and current structures in the vicinity, like an old rail yard, military base, or gas station. It is a good idea and sometimes even fun to look at photos back to a time when there was only bare ground at the site.


USGS Topo of Lake Conroe, Tx and vicinity, public domain, Enter a caption


Debris flow in Ladakl, India photo by Dan Hobley, Wikimedia commons.

Examine USGS maps and look at the drainage patterns and topography. We have seen enough in the news lately to make us aware of the dangers of floods, mudslides, fires, and hurricanes.

Where one of these has occurred, it is likely that another will follow sometime down the road. Ask yourself, has this property been flooded before or does it lie in a floodplain or an arroyo?


If you are considering lending money on a property, you might want to take into consideration the requirements of the US Small Business Administration’s 504 Fixed Asset Financing Program. It requires specific and often higher due diligence requirements than regular real estate transactions. These assessments are required for certain NAICS codes that associated with the prior business use of the property. There are 58 specific NAICS codes that require Phase I Investigations. These include, but are not limited to: funeral homes, dry cleaners, and gas stations. According to Wikipedia, “The SBA also requires a Phase II Environmental Site Assessment to be performed on any gas station that has been in operation for more than 5 years. The additional cost to perform this assessment cannot be included in the amount requested in the loan and adds significant costs to the borrower.”

The US Department of Housing and Urban Development also requires a Phase I ESA for any condominium under construction that wishes to offer an FHA insured loan to potential buyers.

Remediate or Remodel?

All of this detail is indeed not meant to scare you away from buying real estate to remodel and resell or to remodel and rent. It is only meant to make you aware. It is trendy and even admirable to consider buying old junked up industrial property down by the river or in the mining district and turning it into polished urban housing or shopping pavilions.  If you have ambitions in this area, be sure to look around carefully, do your research, know your costs, and have money ready to remediate the site for you are probably looking at more than a quick remodel.

Disclaimer: I am not providing environmental advice or investment advice.



Austin, Texas