BiggerPockets

I'm looking to be a long distance investor. My area doesn't know what cash flow is.

I've decided to buy in Texas, near Dallas. Assuming i am buying in a middle class area, do I need to worry about the specific neighborhood? or just assume that all neighborhoods in this city and price range will have a very similar vacancy rate and a similar future appreciation?

I just want to be sure the part of town that i choose will be desirable to tenants and will attract high quality tenants. Would all neighborhoods in a given price range be equal in this criteria? I'm assuming middle class neighborhoods in the $70k-$80k price range, not very poor areas.
Thanks

Seems to me there was a discussion re Dallas areas not to long ago here, and some areas that are not necessarily terrific. Consider doing a forum search of "Dallas" and read those threads-maybe that info will turn up.
Ofgift
(While you're driving down 10 to get there, stop here and buy mine--over 80K, but a nice house, nice neighborhood. ;-D)

a) Consider searching the Dallas area school districts, and get the information about them. People will go to the best school districts they can. That way you can narrow your search from the entire HUGE area to a somewhat smaller one--say the north side of Dallas, or the west side, and continue narrowing from there.
B) call a local realtor or two, and ask them about better, or, good, school districts (I just googled "dallas school district with high scores" and got http://search.yahoo.com/search?p=dallas+school+district+with+high+scores&fr=yie7c
You might get a lot of info there, and after you have the school district you want, contact local realtors , or just do a Dallas MLS search for homes in that price range.
To get a better idea of the area, use zillow and google earth.

C) Another site with good info can be found by googling the "detailed profile of dallas TX"
go to http://www.city-data.com/city/Dallas-Texas.html and scroll down to "forum"
and see what you can learn there. Ask questions, read...
Best wishes.

Ofgift

Jon has really good advice, so consider it.
My own experience was that while living such a distance, and having fewer capabilities at my fingertips than are available today, 15 years later,, I did buy a house in 1993, sight unseen, and it was a great move.
I never expected to see my home, and 4 years after I bought it, had to move into it. I'm still in it. It was new construction, and rented at a positive cash flow before it was completed, for the entire four years, to the same family, who did take good care of it.
I had a good agent, I had talked to lots of people, had good community information, and was fortunate enough to be hooked up with an honorable property management company (no longer in business)

Maybe I was lucky. Would I do it again? Probably, and have considered it, but have not done it yet. The time isn't right for me. After I sell one of mine--are you sure you don't want mine instead of Dallas?--I may, but I did find two places here...

Ofgift

Julian, $70-80K neighborhoods tend to rent for about $800-950/mo in this area. A sweeter spot for income might be a $45K home that would rent for $650 or even $900 under section 8.

As far as neighborhoods, yes there is a huge difference. We have war zones like any other big city and that is not where you want to be. Even if it cash flows well, you have trouble attracting and keeping good tenants.

We also have working class areas with little violent crime. Garland or Arlington for example.

Originally posted by Ofgift Gift

a) Consider searching the Dallas area school districts, and get the information about them.

Thanks i haven't thought of that.

I'm mainly looking at Dallas because property values are so good for the amount of rent... Im seeing a few $60-70k houses renting for $1300. It has a good 6% vacancy rate. According to atlas van lines, the migration rates are very good. One of the fastest growing metro populations in the US. I've read a few good articles like this one from cnn:
http://money.cnn.com/galleries/2007/biz2/0709/gallery.boom_towns.biz2/index.html

I haven't seen anything like this in Canada. I wish there was a great investment area closer to me! Do you guys have another good suggestion?

Im not really into section 8 rentals, I feel that a newer home in a middle class neighborhood would attract better tenants and is easier to up keep from a distance.

"Im seeing a few $60-70k houses renting for $1300."

Very unusual. Perhaps section 8 in a 4 or 5 bedroom house, or a $70K duplex, but other than that, I haven't seen it.

"I don't really think a $70K house in Dallas would be a middle class neighborhood."

More like $125K or so, but defining middle class is elusive.

Originally posted by Julian F.

I'm mainly looking at Dallas because property values are so good for the amount of rent... Im seeing a few $60-70k houses renting for $1300. It has a good 6% vacancy rate. According to atlas van lines, the migration rates are very good. One of the fastest growing metro populations in the US. I've read a few good articles like this one from cnn:
http://money.cnn.com/galleries/2007/biz2/0709/gallery.boom_towns.biz2/index.html

Where in the DFW area can you get $1300/mo for 70k? Yes, our price to cashflow ratio is good, but it isn't that good. In our areas we're looking at more like $1300/mo for $110k ish. If you do find a 70k house in a $1300 neighborhood it will have major problems. While that may be a viable strategy if you are good with rehabs, the fact that you are long distance would make this very difficult. Do you have good contacts in Dallas? A good handyman, property manager, lawyer etc etc? If you find these people blind and find bad contacts, you can really hurt yourself. My advice is to get hooked up in one of the local REI clubs and start networking:

http://dfwrein.com/
http://www.aireo.com/

I don't mean to be a killjoy- the DFW investing picture is in fact rosy compared to lots of other places, but be realistic. Don't get your stats from news articles- talk to real people to find out the reality on the streets.

In addition- make sure you are familiar with our issues. I.E. North Texas is notorious for shifting foundations. The vast majority of our houses built since the mid 60's are built on concrete slab foundations... this can be a major expense (deal killer in many situations).

i will be taking the time to get those contacts before buying, hopefully through references. It will cost more to meet good people through mistakes... but there isn't this kind of opportunity in my area.

If you saw a foreclosure for 70k/5k repairs and $1300 rent... that thing would be snapped up that day... unless like mentioned above this is some type of section 8/warzone thing. I'm not saying it isn't possible but you really need to be able to drive by and see the house/neighborhood and that seems difficult to me from long distance.

Just to give you an idea: we looked at a house in Irving once that was close to the parameters you quote (more like $1200/mo rent and price was in the 80s) this was a wholesale deal and they had repairs estimated at 10k... we looked at the house and 10k was *way* off... I would say around 30-40k... major major foundation issues, updating etc etc... my point is that you don't know unless you see it. We make offers sight unseen, but we do not close unless we have seen the house... this is for houses that are no more than a 20-30 minute drive away. Maybe if you have someone you can trust here to look at the house for you... but that is a big maybe.