New Investors South DFW Area

10 Replies

Hi -

My wife and I are new real estate investors in the south DFW area.  We currently live in Mansfield, TX and are looking for properties in Mansfield, Midlothian and Waxahachie.  

We recently purchased a HUD home in Waxahachie that was in rough shape. My wife and I fixed up the home on our own and had it rented in 5 weeks. In my opinion, we are doing OK on it. The rent is double the monthly payment and after saving 20% of the rent for repairs (working hard at building up a solid reserve) and 11% (six weeks) of vacancy, we are cash flowing just over $300/month. There is roughly $35,000 in equity.

Our goal is to purchase another property by the end of the year.  I'm a little cautious of some of the creative financing plans out there so we are doing traditional financing through our credit union and all out of pocket funds come from commissions earned at my day job.  I understand that I'm limited with this strategy and want to learn more about creative financing so we can do more deals.

On another note, we would like to rent out our home in Mansfield as the rents are going through the roof and purchase a larger home in Midlothian with a minimum of 1 acre.  Please let me know if anyone knows of a deal.

@Darryl Taylor

Congrats on a super 1st property!  Learn from the crowd but remember if you are following the crowd you are probably just eating dust.  Sounds like you have a strategy that works for you.  Review it regularly but change it infrequently.

Goals -> Strategy -> Plan -> Action -> Goals 

@Darryl Taylor - Congratulations on your HUD acquisition and restoral. That's great when you are handy.

You have a plan and have followed/executed it to completion. This 1st acquisition is verification that your plan works, so don't deviate from it severely, but, at times you might have to fine tune it.

Good luck with your expansion plans and please keep the BP community posted with your successes.

Originally posted by @Darryl Taylor :

Hi -

My wife and I are new real estate investors in the south DFW area.  We currently live in Mansfield, TX and are looking for properties in Mansfield, Midlothian and Waxahachie.  

We recently purchased a HUD home in Waxahachie that was in rough shape. My wife and I fixed up the home on our own and had it rented in 5 weeks. In my opinion, we are doing OK on it. The rent is double the monthly payment and after saving 20% of the rent for repairs (working hard at building up a solid reserve) and 11% (six weeks) of vacancy, we are cash flowing just over $300/month. There is roughly $35,000 in equity.

Our goal is ....

Doing OK?? Your kidding right. Rehab and rented in 5 weeks. On top of that your saving 31% of the rent roll for contingencies and still flowing 300 bucks. I'd say that's a sweet deal. You've done well.  If I may ask, what was your total out of pocket? Just a round number if you can. 

As you get a better understanding of the actual repairs costs and vacancy rates that % number can get lowered. Lenders like 6 months reserves. Once you have the reserves don't shy away from creative financing. I was talking to a hard money lender that would give me 7% with 2 points origination fees. Develop those relationships and money will find you. 

@Darryl Taylor Sounds like a great first investment to me ! Nice work. I agree with another poster, the hold back percentage can drop lower after you gain more properties and have a nice network of contractors. Keep it up.

I appreciate all of the comments. @Alberto C.  We spent 20K on the down payment and closing costs and 7K out of pocket for repairs. 

It was an interesting experience. It had been on the market for awhile so we made a really low offer. HUD countered and we countered back, only raising our offer 2K. HUD countered again but we were at our max and said we we wouldn't go any higher. The deal was dead. Two weeks later my wife was visiting her sister in Colorado and our realtor called her and said that HUD had reconsidered and accepted our low offer. We were pretty excited.

As for repairs, we figured that we saved ourselves about 10K by doing the work ourselves. I took care of the mechanical side and my wife ran the cosmetic stuff. I eventually helped her as mechanical stuff went pretty quick but paint and floors didn't. My wife was extremely frugal when shopping. I think the only things we paid retail for were the hot water heater, garbage disposal, baseboards and misc small items from Home Depot. She negotiated a discount on vinyl plank flooring from GED's floor store, bought all replacement doors and some light fixtures at the Habitat for Huminaity Restore, and all appliances came from Craigslist including a like new dishwasher for free that someone just needed to get rid of because they upgraded to stainless. Another useful cost saving tip that she did was to buy a ton of paint early from Shermin Williams at their 40% off sale (which happens regularly) and to not have it tinted. If it's not tinted you can bring back the extra or return it all i your deal falls through. She took it back to the store and had it tinted about 4 gallons at a time to ensure that we didn't have any overages. They will tint for free. 

It was a long month. I'd work my normal job and the head down to the rental until midnight. Weekends were 16 hour days. All worth it to save 10K. 

@Darryl Taylor

Hey Darryl, I actually have a property for sale in Midlothian at the moment. Feel free to send me a message if you're interested. 

Also, welcome to BP! There's so much to learn here, especially from the podcasts. 

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