Investing in DFW
Hello
I am looking to invest in the DFW area. I am new to the area as well as new to investing in real estate aside from my own house. I have a very small budget 75-80 K. I am not looking to flip or any thing of that sort. I just want an income property that brings me about a 1000$ a month and is a solid long term investment. If the 1st deal works as planned I am looking to do a 2nd deal in the same range. You think such a plan can be achieved in the DFW area?
What advise would you give me?
Eduard
are you looking for $1000 net or gross? I am assuming you mean gross but not sure based on the context of your message?
I meant $1000 gross
I would suggest using leverage to purchase your rentals. With 20% down you should be able to get traditional bank financing. I would look into areas further north of Little Elm including Savannah and Prosper. It is highly unlikely you will cash flow $1K/month with a purchase price of $80K. Get that 1st rental under your belt and see if it's for you.
Thank you for the tip Rocky Vasquez
Eduard,
Do you have 70-80K in cash or is this your target price range?
Nick
Don't focus on gross rent. Focus on the next after tax cash-on-cash Return On Investment (ROI). That is all that matters: the bottom line. I wouldn't do any deal that doesn't bring in at least double digit ROI. I put together appreciation deals for my clients that are minimum 25% cash-on-cash ROI over 6-month periods, as well as buy and hold deals that have annual cash-on-cash ROI of minimum 11% ROI from rents (not including appreciation).
Decide what is your risk tolerance (this is directly related to your ROI). Rule of thumb: low risk = low ROI, high risk = high ROI. When it comes to high ROI and high risk, it's not about avoiding risk, it's about managing and shifting risk.
Hope this helps. God Bless You!
Thank you for your advise.
the Tarrant County Tax Sale held on the 1st Tuesday of the month is a good place to start. They have several properties that could be rehabbed into nice rentals. In August it had 3 properties that went 45% ARV. One was a 4-2-2 model home in Crowley, TX. It sold for $77k, and has an ARV of $175k.
@Eduard Florea You're in a great market to start out in. What you're looking for is very attainable. As a good rule of thumb, you can normally expect rental values to be about 1% of the ARV. Make sure you take the opportunity to walk through a couple of houses that are being rehabbed right now so you are able to do your own rehab bid when the time comes for you to pull the trigger on one. The best deals sell FAST! So you might not have time to schedule a contractor to give you a personalized bid.
Thank you for your advise.
Hi
new to BP. looking for my first rental investment home . where do i start ?
thanks