Investment Strategy based on CNBC Top State For Business : TEXAS

27 Replies

Hi,

TEXAS economy is on the fire lately... and now CNBC listed TEXAS is best place to do business.

There is huge in-migration in Texas. 

What/Where to invest in Texas ...?

  • What: SF, MF, Shopping Center, Office..?
  • Where: Houston, Dallas, Austin, San Antonio, FW, ElPaso

The North, South, and East Austin markets are hot, San Marcos/New Braunfels markets are doing well too. They are longer plays, but the barrier to entry is low enough for your casual investor. 

San Antonio and the I-35 corridor has been seeing some explosive growth for the last couple of years now. According to the US Census Bureau, San Antonio is the fastest growing city in the country with an average of 60 people moving in daily. Market stability is sustained by multiple economic drivers such as (Military, Cyber Security, Biotech, Medical and multiple corporate headquarters). Local education institutions have invested heavily in Cyber Security to help propel SA to achieve its new moniker "Cyber City USA" on top of already being known as "Military City USA". 

There is an urban renaissance occurring within the San Antonio urban core (Tobin Hill, Government Hill, Five Points, Dignowity, Denver Heights and many other surrounding submarkets), which has been helping with the gentrification in the area and higher than average appreciation. This was spurred by the  Pearl Brewery Development

The West/NW side of town has been seeing some incredible growth in regards to single family/multifamily new construction and retail. So depending on what you're looking to do, that may be a good market to look at as well.

With the above being said, there are multiple submarkets throughout SA that offer opportunities for investors looking to purchase stabilized A&B class assets, Value-add B&C class properties or fix and flip opportunities. It really all depends on what your goals are, risk tolerance and exit strategy. 

@Shital Thakkar - being from that area I can tell you that new construction is being lined up to accommodate for the merging of SA, SM, NB, and ATX. Within NB there is an expansion of healthcare and within SM Amazon and a few tech companies are establishing themselves. 

Texas has been a great place to do business. Central Texas is as good as it gets. Austin is more of a matured market. It has gone through a pretty significant gentrification process. Austin has grown in all directions but the new push is south. Kyle and Buda have quickly grown. At one time those were commuting suburbs. Now commuting suburbs are San Marcos, New Braunfels, and Canyon Lake. San Marcos is a beautiful college town. It is going through a miniature gentrification and the West Side of San Marcos is attracting a lot of attention. New Braunfels has been growing just as quick. Both cities are now family friendly with a lot of amenities. New Braunfels has a much more polished city plan and code department. Canyon lake finishes out this Central Triangle, it is still lacking an identity but it is quickly changing. It used to be the hillbilly lake town. Now it is on the verge of going through a change process. I would imagine Canyon Lake will be the city where most people kick themselves for not building in. Farther South you have San Antonio. West San Antonio is growing. I don't think it gets much better than West San Antonio. As a city it has a lot to offer. The cultural diversity is awesome. I can only compare it to San Diego of the 80s and early 90s. A fun city that has a lot to offer people of all backgrounds. San Antonio is a bit more blue collar in my opinion where as Austin is white collar. Just outside of San Antonio you have Seguin. Now that little town is about to really start changing. Seguin is a poor town. A poor town on a river, on one of the busiest interstates, with transportation growth that it has happening all around it. Seguin is a is the gateway to Houston and the oil fields. Out west you have Kerrville. Also located on I10 it is a retirement town. Kerrville is known for art and wealthy retirees. That city does not want growth. However, it is the gateway to Texas hill country. Anywhere you look around San Antonio are towns that are growing and the cusp of becoming premiere suburbs. Downtown San Antonio has a real hipness. Today it was what Austin in the early 2000s was trying to be. Downtown San Antonio has the amazing historical charm and vibe that you cannot get anywhere else. You can feel the history, while also sensing the change. If I chose one word to describe Downtown San Antonio it would be "authentic". It is authentic Texas. Those that saw the beauty and potential are already making it happen. 

In my lifetime Austin and San Antonio will essentially become one city. A new and better version of Dallas/Ft Worth. It will get professional sports teams and become an international player as far as metros go. There is decades and decades of petroleum and energy resources in the Permian Basin and Eagle Ford. The widening of the panama canal has increased shipping and transportation. Texas is a gateway into South America by either land or by sea. Railways built Dallas/Ft Worth and the ports combined with interstate transportation will continue to build Central Texas. El Paso to Houston is a transportation corridor that is always increasing. 

The hyperloop if it gets built will be a game changer. I look forward to the day when my kids can live near me but commute to Houston or Dallas in minutes. 

There is nothing temporary about Texas. It is still a baby as far as growth is concerned. Austin cannot even figure out how to build a loop. Look at a map of all of the states and pick out the ones that have the interstate transport, massive amounts of natural resources, ports, coasts, and diversity that Texas has. If you are an out of stater you can pretty much draw a circle around Austin to West San Antonio and be hard pressed to make a bad purchase as far as areas go. Developers that want value land should consider Comal and Hays Counties. Value investors should look for deals inside 410 San Antonio, Seguin, and Canyon Lake. Heavy Hitters should look at Austin, downtown San Antonio, West San Antonio, Downtown San Marcos. The city with the most potential is hands down San Marcos Texas. It is gentrifying quickly. It has developers already pushing for developments that cater to the university. Is has the same kind of charm that cities in Colorado have. It is halfway between Austin and San Antonio. I would make the bold prediction that Hays county will become the Orange county of central Texas over the next few decades.

Hopefully you got something out of that.

@Marshall Fairley New out of state investor here. I’m interested in Oak Cliff, Dallas. Chatted with a couple of agents but am having some challenges getting a read on the rental rates. Goal is to hit the 1% rule but am coming up short. Any ideas would help.
Originally posted by @Shital Thakkar :

Hi,

TEXAS economy is on the fire lately... and now CNBC listed TEXAS is best place to do business.

There is huge in-migration in Texas. 

What/Where to invest in Texas ...?

  • What: SF, MF, Shopping Center, Office..?
  • Where: Houston, Dallas, Austin, San Antonio, FW, ElPaso

Zero shock to me.  I live in San Diego because it's paradise.  I do business in Houston because it's "paradise" for business. 

I think the 1st question is can you do Shopping Center or Office, or how big of an investment? I'd assume the advancement of the investment is the most lucrative and you can fit in the city/area from there. What price are you thinking and the advise can make sense from there.

@Jarrod Covey , @Sterling Williams , @Leland Barrow

Now CNBC listed Austin & Dallas as top two contenders for Amazon HQ2... https://www.cnbc.com/2018/08/16/as-amazon-narrows-...

Which area of Austin / Dallas will be home of Amazon if this happen... What are top 5 area to invest in both of these cities..?

DallasAmazon HQ Should be...

  • Frisco
  • Irving/Las Colinas

Area to invest...

  • Little Elm
  • Anna/Melissa
  • Denton
  • Arlington
  • Lewisville
  • Fort Worth Suburbs

Austin - Amazon HQ Should be...

  • ?
  • ?

Area to invest...

  • ?
  • ?

Amazon HQ won't have an impact on the San Antonio Market due to proximity. I don't specialize in the Austin or Dallas markets so I have no in-depth guidance or insight to provide.   

@Sterling Williams I’m new to the San Antonio RE investment market, but what do you think about the latest reports from the fed about SA affordabIity and “softening” job growth? Do you think any areas have become too hot in the SA area? Just wanted to get your perspective... https://www.dallasfed.org/-/media/Documents/research/indicators/sa/2018/sa1808.pdf