Best area in Texas to invest in 4-6 unit apartments?

[Russ Draper]

We're going to have a look at a few different cities in TX and wanted to ask for people's opinions on what is best.  We plan to look at 4plexes and 6plexes in the areas.  We would be out of state investors.  We're considering Dallas/Ft Worth, San Antonio and Houston.  We've never even been to any of these places.  What would you suggest?

[Peter M.]

You will have a tough time in all of those markets because right now investors will jump on anything resembling a deal before it even hits the MLS. I'm not saying don't try but it will be hard unless you are doing your own marketing or can get some pocket listings from RE agents. One thing to note about Texas is we have high property tax because there is no income tax. I usually use 2.5-3% when evaluating property which can be a huge expense if you are not expecting it. Also, the price points may make you salivate compared to prices in Boston but it is all relative when rents can be as low as $350 for 1/1 efficiencies out in a suburb. I am biased toward DFW since I live here but I like San Antonio too. Maybe check out some of the outlying college towns as well. Good luck