Real Estate Investing in Killeen

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y

Killeen is like many other small markets that are largely dependent on 1-2 employers. You can often find deals with great numbers on the surface in these places. However, if one of those employers goes away or just scales back, you can quickly be underwater. I've seen a lot of investors get hurt in places like this. I got out of investing in college towns for this exact reason a few years back.

This is why I stick to major markets. The numbers aren't quite as good, but imho the risk adjusted returns are significantly better. For example, if Fort Hood closed or scaled back, Killeen would be devastated and you'd quickly be underwater with your properties. Compare that to when San Antonio lost Kelly AFB in the late 90's early 00's. Sure it had an impact, but the city was able to absorb that and keep moving. 

When I bring up base closings, a lot of people think this isn't a real risk. However, over 350 bases have been closed since the late 80's, and in recent years there has been a push for another round of BRAC. For Hood employs more than 10 times as many people as the next largest employer in the city, so if that ever did happen, there is little chance the area would survive. Even if they decided to cut their workforce by 10%, that would be equivalent of losing the second largest employer in the market.

[email protected]979-218-2286
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  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    Killeen is like many other small markets that are largely dependent on 1-2 employers. You can often find deals with great numbers on the surface in these places. However, if one of those employers goes away or just scales back, you can quickly be underwater. I've seen a lot of investors get hurt in places like this. I got out of investing in college towns for this exact reason a few years back.

    This is why I stick to major markets. The numbers aren't quite as good, but imho the risk adjusted returns are significantly better. For example, if Fort Hood closed or scaled back, Killeen would be devastated and you'd quickly be underwater with your properties. Compare that to when San Antonio lost Kelly AFB in the late 90's early 00's. Sure it had an impact, but the city was able to absorb that and keep moving. 

    When I bring up base closings, a lot of people think this isn't a real risk. However, over 350 bases have been closed since the late 80's, and in recent years there has been a push for another round of BRAC. For Hood employs more than 10 times as many people as the next largest employer in the city, so if that ever did happen, there is little chance the area would survive. Even if they decided to cut their workforce by 10%, that would be equivalent of losing the second largest employer in the market.

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
    WebsiteView Page
    3Reply
  • Andres I. Cepeda
    Wholesaler · Temple, TX · Member since 2017 · 44 posts · 17 votes
    6y

    @Macori Walker Joseph is spot on with small tertiary markets. I think its valuable to caution toward single employer cities until you can get more data to either mitigate or move on. In this case Killeen, TX will always be affected by Fort Hood and funding toward the military, but it will never go away. Ft. Hood is the most populous military installation in the world and one of the largest by area. During the height of sequestration and the last BRAC, the Army closed other posts and units to consolidate to Ft. Hood. If the military experiences another big round of budget cuts and needs to shrink it will look to consolidate to its major hubs just like any other organization. Fort Hood is one of those hubs in the Army. I'd love to help any other way that I can!

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  • Adrian Fajardo
    Rental Property Investor · Killeen, TX · Member since 2017 · 337 posts · 100 votes
    6y

    @Macori Walker I agree with @Andres I. Cepeda. The US is like the police of the world. The only way Ft. Hood will shut down, unlikely in our lifetime or in the time you own properties, is if there will be no more need for military (world peace). Yeah, the army might downsize but it will shut down smaller bases first before closing down one of the biggest and oldest bases. Not to mention, it is the HQ of a Corps. That's no excuse though to not be conservative and do your due diligence before buying. Still buy undervalue which will help you when downturns occur.

    I wish you the best in your investing journey!

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