Investing In Texas? Good Or Bad?!

[Sam Chicquen]

Hey, everyone! How's it going? I've been doing some research, and I'm really interested in the multifamily real estate market in Texas. The thing is, I don't live there, and I'm eager to start my investing journey in that area. I was wondering if there are any seasoned multifamily investors in Texas who have an in-depth understanding of the market.

If you're someone with significant experience in Texas multifamily investing, I would be extremely grateful if you could spare some time to answer a few questions. Connecting with someone knowledgeable like you would be an invaluable opportunity for me to expand my understanding of the market and gain some valuable insights.

Your expertise and advice are highly respected, and I genuinely appreciate any assistance you can offer. Looking forward to the possibility of connecting with you and learning from your experiences. Thank you in advance for your time and willingness to help!

[Alecia Loveless]

@Sam Chicquen Hi Sam, I don’t personally invest in Texas but my parents and sister live north of Dallas in the Denton area and my sister has a healthy portfolio.

Just to give you a heads up before you buy in Texas be aware of the property taxes on any properties you get serious about and try to look at them for a few years going back.

Both my parents and sisters personal homes have gone up in tax assessed value by approximately 50% on average for the past 5 years with my parents house going up $278,000 in assessed value this year alone even though they have made $0 in improvements to it. This amounts to about $7,000 on their tax bill. When my dad, who is an attorney, went to the appraisal district for round 1 of trying to get it lowered the lowered it by $40,000.

My sisters rental properties all went up on average about 40% in assessed value which means that where she had a small cash flow every month now she is basically breaking even on them all after the recent increase in insurance premiums and now the increase in her property taxes.

I just advise you that if you get serious about a multi family property in Texas to make sure that it’s taxes haven’t gone up by thousands of dollars the past 3-4 years because likely whatever town it’s located in will continue doing that and it’ll eat into your cash flow.

[Lucia Rushton]

@Sam Chicquen when you say multifamily, how many doors are you considering? And what is your budget ? We have plenty of out of state clients who purchase here because we have a strong economy. Happy to jump on a call with you to discuss.

[Sam Chicquen]

Quote from @Alecia Loveless:

@Sam Chicquen Hi Sam, I don’t personally invest in Texas but my parents and sister live north of Dallas in the Denton area and my sister has a healthy portfolio.

Just to give you a heads up before you buy in Texas be aware of the property taxes on any properties you get serious about and try to look at them for a few years going back.

Both my parents and sisters personal homes have gone up in tax assessed value by approximately 50% on average for the past 5 years with my parents house going up $278,000 in assessed value this year alone even though they have made $0 in improvements to it. This amounts to about $7,000 on their tax bill. When my dad, who is an attorney, went to the appraisal district for round 1 of trying to get it lowered the lowered it by $40,000.

My sisters rental properties all went up on average about 40% in assessed value which means that where she had a small cash flow every month now she is basically breaking even on them all after the recent increase in insurance premiums and now the increase in her property taxes.

I just advise you that if you get serious about a multi family property in Texas to make sure that it’s taxes haven’t gone up by thousands of dollars the past 3-4 years because likely whatever town it’s located in will continue doing that and it’ll eat into your cash flow.

Hey Alecia, thank you for providing such valuable information about the Texas market. Your insights have been incredibly insightful, and I truly appreciate the time you took to explain the intricacies.

I have a few questions related to the rising taxes in the area. Could you shed some light on the reasons behind the substantial increase? Moreover, I'm curious to know how landlords are coping with these escalating tax rates. Are they adjusting rents to accommodate these changes?

Additionally, I recall you mentioning your sister's involvement in real estate. If she happens to have a BiggerPockets account, I would love to connect with her to gain further insights and perhaps exchange ideas.

Once again, thank you for your valuable input, and I look forward to hearing from you soon.

[Sam Chicquen]

Quote from @Lucia Rushton:

@Sam Chicquen when you say multifamily, how many doors are you considering? And what is your budget ? We have plenty of out of state clients who purchase here because we have a strong economy. Happy to jump on a call with you to discuss.

I would greatly appreciate the opportunity to schedule a call with you. If it's convenient, could I send you a direct message to discuss this matter further?

[Wale Lawal]

@Sam Chicquen Texas is very big and it's extremely important you pick your top 3 market in Texas.

As a Multifamily Investor and an Investor Real Estate Agent, Houston, Dallas and San Antonio seems to be where I have seen many successful Multifamily investors and Syndicators invest.

I will recommend you do some research on these 3 markets and make your decision from there.

Goodluck and keep us posted.

[Sam Chicquen]

Quote from @Jeffrey Duplantis:

Good Morning Sam, there are only 15 landlord friendly states in the US  Both, Texas and Florida are “Landlord Friendly” states.  Texas has a growing tech sector coming out of California mostly.    Elon Musk transferred Tesla to Austin area, and Oracle and many others relocated there.  
their is no State income tax there either which some find attractive. 
Florida is growing mostly from New York people resettling there. Also , no state income tax.  Problem with Florida is the insurance issues that develop a few years ago  after the hurricanes tore it up.   Harder to get and expensive. 
as for as creative financing goes. I'm a Private Money Broker. first, You need to open an LLC in the US- it's easy to do online. Nevada or Wyoming are better for asset protection. You will need a registered agent that lives in the state where you open it in. I can give you the name of a legal team that does that in both states. Or just open one yourself in Texas. Then you need to find a deal and get it under contract. I can run the numbers to see if you have a good deal or not. I can vett lenders for you to get the best rates. To get funding, we need to ensure you will make money at least $20,000 Net profit on each deal. You can reach me at (225) 573-2819.

Thank you, Jeffrey, for providing such valuable information, it's truly appreciated. Your insights have been enlightening, and I've learned a great deal from the paragraph you shared. I would be thrilled to connect with you and delve deeper into this topic.

At your convenience, please let me know the best time to reach out and have a more detailed conversation. I understand the importance of respecting others' time, especially during the weekend. Please feel free to share when it would be suitable for you to discuss further.

Once again, I'm grateful for your expertise, and I'm eagerly looking forward to our upcoming conversation.

[Bruce Lynn]

Hi Sam,

When you say multifamily is that 2-4 units or bigger?

Why multi vs single family?

One trick here in Texas is I don't think we have as much small multifamily like other parts of the country.  We do have some 2 and 4 door units, but just does not seem like many to choose from at any one time.

What I've noticed lately too is that prices seem super high for many of these compared to the rents. Often you will see something like $3000 total rent for $600,000 sales price on a duplex. I guess if you just need a safe place to park money for the long term, maybe that is a good place, but if you expect ROI, it seems pretty low.

Another consideration on small multifamily is what is your exit strategy?  Normally you're selling to another investor and that is not always an easy endeavor.  

The good news is for real estate, perhaps the two most important things to look at are population growth and job growth.  Texas has plenty of both.

I'm also of the opinion where we might just be preparing for a perfect storm that will be bad for renters and great for owners.  Lots of dynamics happening right now.   Strict lending for multifamily, high interest rates that make construction expensive.  Maybe a 2-5 year period where very little new construction will take place.  High rent which will make it difficult for renters to save for down payment.  Prices for starter homes very high now that prevent many from buying.  While we've had a bit of a lag in rent growth the past 6 months or so, if all that continues, we should see good rent growth in the next 2-5 years.

[Ronald Rohde]

Texas is still a massive market, have you narrowed it down at all? 2-4 unit MF is the easiest investment, I would just jump in as the price point is all recoverable.

[Jordan Moorhead]

Texas is great and growing like crazy!

[Jacob Pereira]

Quote from @Sam Chicquen:

Quote from @Alecia Loveless:

@Sam Chicquen Hi Sam, I don’t personally invest in Texas but my parents and sister live north of Dallas in the Denton area and my sister has a healthy portfolio.

Just to give you a heads up before you buy in Texas be aware of the property taxes on any properties you get serious about and try to look at them for a few years going back.

Both my parents and sisters personal homes have gone up in tax assessed value by approximately 50% on average for the past 5 years with my parents house going up $278,000 in assessed value this year alone even though they have made $0 in improvements to it. This amounts to about $7,000 on their tax bill. When my dad, who is an attorney, went to the appraisal district for round 1 of trying to get it lowered the lowered it by $40,000.

My sisters rental properties all went up on average about 40% in assessed value which means that where she had a small cash flow every month now she is basically breaking even on them all after the recent increase in insurance premiums and now the increase in her property taxes.

I just advise you that if you get serious about a multi family property in Texas to make sure that it’s taxes haven’t gone up by thousands of dollars the past 3-4 years because likely whatever town it’s located in will continue doing that and it’ll eat into your cash flow.

Hey Alecia, thank you for providing such valuable information about the Texas market. Your insights have been incredibly insightful, and I truly appreciate the time you took to explain the intricacies.

I have a few questions related to the rising taxes in the area. Could you shed some light on the reasons behind the substantial increase? Moreover, I'm curious to know how landlords are coping with these escalating tax rates. Are they adjusting rents to accommodate these changes?

Additionally, I recall you mentioning your sister's involvement in real estate. If she happens to have a BiggerPockets account, I would love to connect with her to gain further insights and perhaps exchange ideas.

Once again, thank you for your valuable input, and I look forward to hearing from you soon.

 I own a few fourplexes and duplexes in Austin, and was excited to see that the Texas legislature recently passed a 20% cap on increases for non-homesteaded properties worth less than $5M. Also, although the Texas economy is still growing, the housing market is no longer the white-hot mess it was, so seeing more 50% annual increases would be pretty unlikely anyway. To @Alecia Loveless, your parents' and sister's houses should have been homesteaded, meaning that they can only go up in taxable value by 10% annually (less for certain disabled veterans or elderly owners). This won't affect @Sam Chicquen, since he doesn't plan to live in them, but if for some reason your family forgot to homestead their properties, they should probably consult a tax attorney to see if they can claw some of that money back.

[Joe C.]

What are the pros and cons with Houston and Dallas. I know that Houston gets hit with bad storms but really know nothing else about it. Thanks.

[Jordan Moorhead]

@Joe C. pros are they are both some of the fastest growing metros in the country

[Donato Callahan]

Quote from @Sam Chicquen:

Hey, everyone! How's it going? I've been doing some research, and I'm really interested in the multifamily real estate market in Texas. The thing is, I don't live there, and I'm eager to start my investing journey in that area. I was wondering if there are any seasoned multifamily investors in Texas who have an in-depth understanding of the market.

If you're someone with significant experience in Texas multifamily investing, I would be extremely grateful if you could spare some time to answer a few questions. Connecting with someone knowledgeable like you would be an invaluable opportunity for me to expand my understanding of the market and gain some valuable insights.

Your expertise and advice are highly respected, and I genuinely appreciate any assistance you can offer. Looking forward to the possibility of connecting with you and learning from your experiences. Thank you in advance for your time and willingness to help!

 Sam, 

I own nearly 400 units in Texas commercial multifamily and would be happy to help. One of the key things I look at when I'm analyzing a market or a new deal is development progress in that area. 

For example, I'm under contract on a deal in San Antonio right now and use this build permit heat map to see where other people are doing construction and renovation projects. 

The result is that I avoid buying in areas where everyone is already focusing and find the hidden gem spots.