Millennial investor in Dallas, Texas

16 Replies

Hi all! 

I'm excited to be here and I hope to this becomes a community I grow to actively participate in and contribute to. For a bit of introduction, I am a mid-20 something living in Dallas, TX and I currently work as an investment consultant. Outside of my day job doing portfolio management I am also a bit of a personal finance nerd and am very active in managing my assets and constantly thinking about the best way to put them to work. 

Real Estate is not something that has been on my radar and I think a large part of the reason for that is that it has always either seemed 1) out of reach due to cost, or 2) too much of a commitment to a specific location is required (which is a turnoff to me as I like the idea of being able to switch jobs and move to a new city at any point). I am starting to realize that these two points might not be as true as I thought. 

I currently invest in the stock market and save a significant amount of money from working at my current job. I would like to look into how real estate could fit into my plans for wealth accumulation and if it is a feasible and reasonable option for me. As sort of an exotic aside, a friend of mine and I have been considering the possibility of investing in a rental property in Europe. We believe there are some very compelling reasons for why this is attractive but we do not know a ton about how an investment like that might work. 

Right now I am just trying to learn from the community here. 

@Trevor Rockhill . Welcome aboard, I lived in Dallas when I got started. Due to high taxes and insurance costs I would suggest you look elsewhere in TN (Memphis) or AR (Little Rock), both aren’t to far from you and will be cheaper and offer better returns. I would also suggest not buying in Europe as a first investment. You’ll likely lose money. Everything is so different if you do that.

Welcome to the community, Trevor! 

As a millennial, I know where you are coming from. My first investments—whether stock or real estate—inevitably shaped my view about the markets and industry. Since you already have a corporate background in portfolio management, or as you say a personal finance nerd, you already have the proper mindset to mitigate any risks. 

Obviously your strengths are in stock investing, but diversification can help you when either market corrects. Kudos for thinking outside the box to invest in Europe. Although I consider myself a strong risk-taker, investing in Europe may be too much of a commitment. You must know the laws, taxes, and occasionally travel for maintenance unless you are a limited partner or have boots on the ground. It's best to keep the first few deals local, then we can remove the training wheels so to speak.

Hey @Trevor Rockhill , welcome to BP! Great place to meet experienced players in the industry and get some answers!

There are essentially a lot of different 'markets' within the Dallas market. There are certain areas where a rental property may not bring in as much monthly cash flow (as a percentage of price) but that will result in a larger long-term equity capture. Other places, especially low-income neighborhoods, you may find deals that have high monthly rates (as a % of price) but that may have tenants that are difficult to work with or less attractive equity. I'd be happy to hop on the phone with you and tell you everything I can!

@Trevor Rockhill If you have a significant amount of money, then flipping for capital might be a good avenue for you. Its short term and produces instant gratification, and you can use a loan to do a flip with minimum cash in the deal. Seems like this would fit your personality flipping is about analyzing numbers and doesn't require you stay anywhere specific. 

Thank you all for the responses! I definitely have lots of room to learn and I am seeing some lingo that I don't recognize (though context clues might go a long way!). As a novice I am curious to learn more about what the expected returns are for privately owned real estate and how that stacks up against the public capital markets. There are obviously many factors that would come into play there, and perhaps it's not possible to drill down a general expectation for that reason. Still, for the time and energy required of a "hands on" real estate investment, I'd imagine investors expect an ROI anywhere in the mid-to-high single digits, all the way up to the mid-to-high teens. I imagine these sorts of calculations are viewed differently too for cash flowing rental properties vs capital gains based flipping? Regardless, I think having some diversification through property ownership is probably a very good thing and the cash flow of rental properties is what sounds very appealing to me. I also love the idea of slowly building up a real estate portfolio over the course of 3, 5, 10 years.

Originally posted by @Trevor Rockhill :

@Caleb Heimsoth @Edward Cervantes  

@Logan Gerard @Aaron Beauchamp  

I meant to tag you all in my previous post just above. Is it common etiquette to do this? Is it likely you will not see the post if I do not tag? 

Yes tag people or we don’t see it.  Typically my total rOI is 12-15 percent. this includes cash flow and appreciation 

Welcome @Trevor Rockhill! My husband and I invest in the DFW metroplex. We started when I was 26 by "house hacking" a duplex. 2 years later we have 8 units that are all paying for themselves and we make an income off of them. My husband works in finance and I work in food safety for our W2's, we also have an 18 mo. old son. This type of investing definitely fits our current lifestyle. We self manage our properties, but this hasn't held us back from traveling out of country at least 1x/year as well as frequent trips within the US. 

@Trevor Rockhill ,

Welcome to BP!

I agree with @Logan Gerard , that there are many different markets within DFW.  Think about the nice big residential properties in Plano vs. a small worn out place in the older part of town. 


I am a fan of investing close to home.  

I think that if you get a high grade property as a rental, you will have low cash-flow, but better appreciation.  If you purchase a lower grade property, you can usually get much better cash flow, but the appreciation is a lot lower.

If you start buying and stay in the market like @Christian Montalvo describes, then you will start to find the "unicorns" that are good appreciation and good cashflow.

It is a lot like stocks that pay great dividends vs the AMZN types that just appreciate like crazy!

Originally posted by @Christian Montalvo :

Welcome @Trevor Rockhill! My husband and I invest in the DFW metroplex. We started when I was 26 by "house hacking" a duplex. 2 years later we have 8 units that are all paying for themselves and we make an income off of them. My husband works in finance and I work in food safety for our W2's, we also have an 18 mo. old son. This type of investing definitely fits our current lifestyle. We self manage our properties, but this hasn't held us back from traveling out of country at least 1x/year as well as frequent trips within the US. 

Thanks Christian! That sounds like the ideal path for sure! 

@Trevor Rockhill   I like Greece because I think, it is cheap and should move up from here.  I would say Sweden seems similar to DFW at the moment.  Values have been increasing in recent years.  You might also consider that Texas real estate and Swedish real estate are both tied to oil prices more than most other markets.  It would actually provide a little less benefit than some other places if you are trying to diversify.

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