Flipping versus Long-Term Renting in Dallas, Texas
Member since 2023 · 8 posts · 2 votes
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
@Cade Anderson, it can be debated, however, I strongly believe everyone's first deal should be a house hack property. Start looking into this method of investing ASAP.
Hey @Cade Anderson
You're asking the right questions, but they are BIG questions and deserve some solid thinking time.
Zoom out for a bit and really think about your priorities and current skill sets. Identify your strong areas and the areas you could improve on. Once you have a solid foundation all around you'll be in a better position to make an informed decision on where to start.
That being said; long term buy and hold is arguably the greatest way to store and build wealth...but it's not necessarily the best thing for cash flow, at least in the beginning. If generating cash is a concern then you may want to focus on flips or even wholesaling to generate revenue and keep things cushy while you build your portfolio of rentals.
My two cents; build a stable revenue base (in REI, your W2 or whatever) and build from a place of financial strength to absorb any of the inevitable BS that will come your way with a rental portfolio.
Hope this helps a bit even though it isn't super "tactical" advice...you can find plenty of that online and in books. It's the big picture thinking that's the real game changer I wish I had someone helping me with at your age.
Cheers,
Josh
Hey Cade!
When starting out, I would suggest house hacking to familiarize yourself and then turn it into a LTR if that is what you choose
@Cade Anderson, it can be debated, however, I strongly believe everyone's first deal should be a house hack property. Start looking into this method of investing ASAP.
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Flipping is a business, it's not an investment. So you must be an expert on real estate first before you LTR.
LTR is more like semi-active real estate investment.
There's always battle between reward/risk scenario which one is better, flipping or LTR, it really depends on the economic condition, your skillset, the future trajectory of interest rate and the local house market condition itself.
But if you want to be advanced and grow in real estate, flipping is the way to go. It's more like master degree and high school. There're more challenges and risk with Flipping although it offers some lesser risk in some part as well. Both profession requires you to have strong discipline and good calculation in business.
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Hey Cade,
First off, loved starting with a y'all.
As for the decision, I have a few clients struggling with this especially because the cash flow issues in TX right now. Combine the rates with the property taxes and it makes it tough to cash flow in a lot of areas in TX.
A few of those folks are truly flipping for the purpose of keeping as liquid as possible right now. If you can find a way to cash flow that is great, but if you maintain liquidity, then it will make it easier to purchase and be aggressive when times are good.
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Get good deals so you're making about 10 - 15% net per year, HOLD THEM, if you have got a good deal ( not easy in this market) I have flipped about 500 , yes 500 in my market. Biggest mistake in my life, not keeping 50 or so more, cost me millions. , Wealth is built, not flipped :)
Good luck
Hey @Cade Anderson
You're asking the right questions, but they are BIG questions and deserve some solid thinking time.
Zoom out for a bit and really think about your priorities and current skill sets. Identify your strong areas and the areas you could improve on. Once you have a solid foundation all around you'll be in a better position to make an informed decision on where to start.
That being said; long term buy and hold is arguably the greatest way to store and build wealth...but it's not necessarily the best thing for cash flow, at least in the beginning. If generating cash is a concern then you may want to focus on flips or even wholesaling to generate revenue and keep things cushy while you build your portfolio of rentals.
My two cents; build a stable revenue base (in REI, your W2 or whatever) and build from a place of financial strength to absorb any of the inevitable BS that will come your way with a rental portfolio.
Hope this helps a bit even though it isn't super "tactical" advice...you can find plenty of that online and in books. It's the big picture thinking that's the real game changer I wish I had someone helping me with at your age.
Cheers,
Josh
Josh,
Thank you so much for the reply! Really right now I am very much in the learning stage as I save up for that first property, so this advice is incredible. I'll be sure to take this into account before I get into my first deal, and I think flipping to build up a nest egg to eventually get into rentals is the track that I am leaning towards.
Thank you again!
Hey Cade!
When starting out, I would suggest house hacking to familiarize yourself and then turn it into a LTR if that is what you choose
River,
Thank you! That is one strategy that I should look into more, as I have heard it's a great way to get a start in the market.
Thank you again!
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Flipping is a business, it's not an investment. So you must be an expert on real estate first before you LTR.
LTR is more like semi-active real estate investment.
There's always battle between reward/risk scenario which one is better, flipping or LTR, it really depends on the economic condition, your skillset, the future trajectory of interest rate and the local house market condition itself.
But if you want to be advanced and grow in real estate, flipping is the way to go. It's more like master degree and high school. There're more challenges and risk with Flipping although it offers some lesser risk in some part as well. Both profession requires you to have strong discipline and good calculation in business.
Carlos,
I think the education analogy is great. At this point, I am focused on saving and learning and just want to get into the world of real estate through talking to knowledgeable people who have been there and learning from them. By getting my first property, I assume I will learn on the job a lot faster than from a book! I appreciate the reply!
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Get good deals so you're making about 10 - 15% net per year, HOLD THEM, if you have got a good deal ( not easy in this market) I have flipped about 500 , yes 500 in my market. Biggest mistake in my life, not keeping 50 or so more, cost me millions. , Wealth is built, not flipped :)
Good luck
Bob,
500 is insane! I am sure the knowledge you have gained from those experiences is vast, and the experience is something I am excited about. I want to get good at understanding when I have a good deal on my hands. Thank you so much for the reply!
Hi y'all,
My first post on this forum and I'm looking forward to diving into this community! I am in my early twenties, just moved to Dallas from Houston, and I am saving for my first property.
I am not sure about what this first property should be, so I wanted to get the opinion of other people in the area. I am sure that there are deals to be found in any economic climate, but between the hot Texas market and high interest rates, I want to be smart about how I start off.
Long-term rentals are especially intriguing to me, but I wanted to hear from people that have made them cash flow successfully. Would it be better to start out with flipping to try to build up a larger nest egg to later invest in rental properties?
Thank y'all for taking the time!
Hey Cade,
First off, loved starting with a y'all.
As for the decision, I have a few clients struggling with this especially because the cash flow issues in TX right now. Combine the rates with the property taxes and it makes it tough to cash flow in a lot of areas in TX.
A few of those folks are truly flipping for the purpose of keeping as liquid as possible right now. If you can find a way to cash flow that is great, but if you maintain liquidity, then it will make it easier to purchase and be aggressive when times are good.
AJ,
I think that is an awesome strategy, and is probably the one that I am considering the most. The market is hot, and I just wanted to make sure I wasn't analyzing these properties wrong! They look hard to make a monthly return on, so I am leaning with starting with flipping. Thank you so much for the reply!
I would say its easier to find deals to flip with buying from wholesalers. That means you need cash or hard money. There are flip opportunities on the MLS but I am seeing people in bidding wars with them in DFW. I would suggest trying to get into a small multifamily. I see alot that need interior updates. Its the best of both worlds, you can house hack but also have room for growth without the stress of a newbie flipper. I'd be happy to help you with your goals.
Thank you so much for the advice! I have looked a little into multi-family (mostly single-family is what I have been taking a look at), but I want to learn more. I would love to talk more about investing in Dallas and the surrounding area!
You're right, the Dallas market is currently hot, and high interest rates add another layer of complexity. However, smart investment strategies can still yield profitable outcomes.
When considering whether to flip or opt for long-term rentals, it's crucial to weigh the advantages and drawbacks. Flipping can bring in quick, substantial profits, but it demands a hefty upfront investment, renovation skills, and exposes you to market fluctuations. Long-term rentals, on the other hand, provide steady passive income and build equity over time, requiring less hands-on management. Your choice should align with your financial goals, time availability, risk tolerance, and skillset. To build a nest egg, starting small—perhaps with a single-family home or a small multi-family property—and focusing on properties with positive cash flow can be a prudent strategy, offering stable income and a buffer for potential expenses.