Pro/con buying multi fam rental in Texas (out of state)

6 Replies

Hey, just weighing more options.

Can I get a pro/con list for buying a multifamily home out if state for your first time rental? Specifically Texas, I live in Washington state and the cash flow here is abysmal. Lucky to get a CAP of 6.

In Texas, I've noticed a few quad and duplexes in the following cities 

Fort worth

Killian

Austin

Dallas

San Antonio

For my Texas pros, what is your read on these areas? Crime? Vacancies? Ec t. 

Also, is it very difficult to get approved for a loan that is for out of state rental? I already am pre approved for the loan in general. But haven't asked about approving out of state yet. 

Thank you all so much!! I'm still new to this but learning.

Originally posted by @Jayme Jahns :

Hey, just weighing more options.

Can I get a pro/con list for buying a multifamily home out if state for your first time rental? Specifically Texas, I live in Washington state and the cash flow here is abysmal. Lucky to get a CAP of 6.

In Texas, I've noticed a few quad and duplexes in the following cities 

Fort worth

Killian

Austin

Dallas

San Antonio

For my Texas pros, what is your read on these areas? Crime? Vacancies? Ec t. 

Also, is it very difficult to get approved for a loan that is for out of state rental? I already am pre approved for the loan in general. But haven't asked about approving out of state yet. 

Thank you all so much!! I'm still new to this but learning.

 I am unable to find duplex's in Dallas that give much if any return. I have looked at most of the ones that have come on the market, and sold one off of Live Oak and Skillman a little over a year ago.

There are a lot of people chasing very high valuations on duplex's.  If you can get a good price on one, then yes, I would pull the trigger because finding tenants has been easy.

Best of luck to you, let me know how it goes!!!

Moving out away from the DFW area the cap rates are a little better.  However, your appreciation will not be as much and the rents are usually cheaper.  I still find 10 caps, usually C properties.  I would recommend finding someone in Texas, you can build a relationship with, and after you think you can work with them, Partner up with them on a couple of buildings. 

Things to remember is to have an exit strategy, work division, etc.  

Texas is a great place and all properties have been appreciating, I do feel some areas are overheated.  I like to keep within a 35 mile radius, so I lay eyes on the property regularly.  I budget for management but I self manage.  

Follow some folks from Texas and connect with them.  You can get some great feedback.  

Best of Luck to you.  

Thank you both for the info! 

Luckily, I am able to fly out cost free thro ugh a relatives benefits to see the place before buying and whenever we need to check up on it. Maybe monthly or every other hopefully. I would be astounded to get a CAP of 10 or even 8! Here is a stretch to find a 6.

I'm still waiting and looking in my area as well but not too sure how long before our prices come back down. 

At any rate, great info from both of you and I will keep it in mind while looking. 

I do want to make some Texas contacts. I only have one that I know and tryst but he is in San Antonio and i can't find anything in that area right now. 

If anyone knows any good contacts that do property management and or real estate agent please let me know. 

Thanks!!

http://www.city-data.com/ is a free site that helps find local data such as geological hazards(floods, earthquakes, etc), average household income, average SFH price, things like average duplex triplex, quadplex price, and basically everything that can help you all you have to do is enter your city in the search bar(it is good to compare the data to find the best place to invest based on the data)

Hi Jayme!
San Marcos (Texas), is a wonderful market to consider, as there are 8-10%+ CAP Rates that come up on and off market, fairly often.

They are more often than not, not marketed as such, and/or sellers agent is not quite current on truly accurate rental rates, trends, demand, etc.

Please do not hesitate to reach out anytime, should you have any questions, concerns or interest.