Best city in Texas to buy a fourplex?

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Best city in Texas to buy a fourplex?

Tyler D.
Member since 2019 路 219 posts 路 99 votes

I'm looking to buy a fourplex in Texas with my VA loan. The plan is to live in one unit, and rent out the other 3, but I haven't decided on the city. All in I'm looking to spend a max of $800k on a fourplex.

Real estate is my side hustle and I work in tech, so I'd prefer to live in a city that has a strong tech sector (but this isn't a huge factor as I can move out after living there for a year). Austin jumps out immediately as being too expensive. I found some nice deals in San Antonio but I'm not so sure about the job prospects. Dallas seems strong job-wise, and Houston looks like a bit of a sweet spot. Good amount of jobs, low prices, and a nice place to live.

But this is all going off a few hours worth of googling, and I'd like to get the info straight from the source. If you had to choose a city in Texas to buy and rent a fourplex, where would it be, and why?

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Mitchell Benson
Member since 2018 路 9 posts 路 6 votes
6y

Find a good job first. Then find a property 馃憤

5Reply
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  • Mitchell Benson
    Member since 2018 路 9 posts 路 6 votes
    6y

    Find a good job first. Then find a property 馃憤

    5Reply
  • Michael Jones
    Lender 路 Hutto, TX 路 Member since 2017 路 95 posts 路 60 votes
    6y

    Invest in Temple/Belton. Relatively close to Austin and Waco. Still affordable and not a booming economy. Economy will continue to grow modestly and will allow for common sense appreciation as well as steady job growth. I have a few SFR there and will continue to invest in the area.

    4Reply
  • Daniel J Dominguez
    Investor 路 Houston, TX 路 Member since 2017 路 71 posts 路 38 votes
    6y

    Houston by far

    1Reply
  • Jobin V.
    New to Real Estate 路 Houston 路 Member since 2018 路 20 posts 路 5 votes
    6y

    Daniel can you elaborate as to why you recommend Houston? Any specific neighborhoods?

    0Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Mitchell Benson:

    Find a good job first. Then find a property 馃憤

    If this were my line of thought, I'd get a job in San Francisco where a SFH is $1.2 Million.

    Please stay on topic.

    2Reply
  • Bruce Lynn
    Real Estate Broker 路 Coppell, TX 路 Member since 2011 路 5k+ posts 路 4k+ votes
    6y

    I say find the job first...then find the 4plex, but know that is not always an easy task....to find the right 4plex, find one at the right price, find one with the right rents, and find one with 1 unit vacant, find one in a neighborhood where you want to live.  Not impossible, but perhaps not all that common either.

    1Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Michael Jones:

    Invest in Temple/Belton. Relatively close to Austin and Waco. Still affordable and not a booming economy. Economy will continue to grow modestly and will allow for common sense appreciation as well as steady job growth. I have a few SFR there and will continue to invest in the area.

    I'll check them out. How do they compare to the big cities?

    0Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Daniel J Dominguez:

    Houston by far

    What puts houston above the others, in your opinion?

    0Reply
  • Michael Jones
    Lender 路 Hutto, TX 路 Member since 2017 路 95 posts 路 60 votes
    6y

    @Tyler D. - you could find a 4-plex for $200k to $250k. If you look in Harker Heights/Killeen, you could get it for sub $200k and pursue Section 8 possibly. You may not need Section 8 to make it work, but it's an added benefit.

    2Reply
  • Daniel J Dominguez
    Investor 路 Houston, TX 路 Member since 2017 路 71 posts 路 38 votes
    6y

    The Real estate market follows employment on a local level. Texas has been leading the country for years now in job creation. As a matter of fact Houston TX is ranked #1 in the US for job creation. Houston's affordability coupled with its abundance of properties makes for a great market to invest in. Not to mention the fact that people from major cities (ie California,New York) seem to be migrating towards the less expensive markets. Highly suggest doing research on the Houston market 

    @Tyler D'Alessandro

    1Reply
  • Bryan Noth
    Realtor 路 Austin, TX 路 Member since 2016 路 1k+ posts 路 1k+ votes
    6y

    @Tyler D. I wouldn't be so quick to rule Austin out, especially if your budget is 800k for a quad. There are several that show up in a quick MLS search that have merit in the price range.

    All of the major metroplex areas in Texas have upsides.  Austin is arguably the fastest appreciating market and has diverse employers.  San Antonio will likely be the lowest entry point for with respect to price.  And I agree with @Daniel J Dominguez about Houston's job market.

    What is your investing goal might I ask?  Buy and hold?  And for appreciation or cash flow?

    To answer your question directly, if I had the budget of 800k, I would invest in Austin.  If my budget was lower, I would pick San Antonio or Houston depending on work availability.  

    1Reply
  • Account Closed
    Rental Property Investor 路 Canton, OH 路 Member since 2017 路 1k+ posts 路 1k+ votes
    6y

    @Tyler D'Alessandro

    Where: Northern Texas Sherman, Denison, Howe, and surrounding towns.

    Why: I used to live in that area and while prices are still high, they are not Austin or Dallas high...and those places are commutable to Dallas...and Dallas keeps spreading north!

    1Reply
  • Jacob Pereira
    Real Estate Agent 路 Austin, TX 路 Member since 2014 路 636 posts 路 486 votes
    6y

    At 800k you'll be fine buying in Austin. I'm kicking myself now for using my VA on a duplex instead of a fourplex, but I now also own a few fourplexes in Austin that cost under 500k.

    3Reply
  • Karl B.
    Rental Property Investor 路 Erie, PA 路 Member since 2015 路 1k+ posts 路 2k+ votes
    6y

    I did a lot of research for the best cash flow and was close to investing in the Killeen area (preferably Harker Heights and perhaps Copperas Cove).

    Went with another market but as far as cash flow Killeen was pretty epic. Plus they have A LOT of 4-unit properties in that area. 

    1Reply
  • Kenneth McKeown
    Real Estate Agent 路 Dallas, TX 路 Member since 2016 路 432 posts 路 341 votes
    6y

    @Tyler D. what are you looking for most in life? Obviously moving and finding a job here in Texas may offer you a different lifestyle in each city. San Antonio, Houston, DFW and Austin are all great metroplexes with (maybe excluding Austin) pretty decent returns and a great lifestyle. $800k for a 4-plex for instance where I'm at (DFW) would buy you a completely remodeled 4-plex right in the thick of things in downtown Dallas. Or you could be in Arlington for half of that. Both would offer you a much different lifestyle but one will cash flow much better than the other. 

    1Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Bryan Noth:

    @Tyler D. I wouldn't be so quick to rule Austin out, especially if your budget is 800k for a quad. There are several that show up in a quick MLS search that have merit in the price range.

    All of the major metroplex areas in Texas have upsides.  Austin is arguably the fastest appreciating market and has diverse employers.  San Antonio will likely be the lowest entry point for with respect to price.  And I agree with @Daniel J Dominguez about Houston's job market.

    What is your investing goal might I ask?  Buy and hold?  And for appreciation or cash flow?

    To answer your question directly, if I had the budget of 800k, I would invest in Austin.  If my budget was lower, I would pick San Antonio or Houston depending on work availability.  

    Hey Bryan, my goal for this property is to max my veteran's benefits. In Texas I get a 100% property tax exemption (100% disabled veteran), as well as the great VA loan rate. This is why I'm specifically looking at the bigger cities and not the smaller ones which would arguably cashflow better.

    As for the property itself, I'm thinking that a fourplex with a 3/2 + garage setup would be optimal, as it would attract families who would stay for a long time. I'm still new to the REI game, so I'm open to suggestions on this, though. I'm looking to buy and hold for the long-term, with a focus on cash flow.

    I took a look into Austin and you're right. I found a few in the $700k range. I'll have to look at the numbers to see how they'll cashflow.

    1Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Kenneth McKeown:

    @Tyler D. what are you looking for most in life? Obviously moving and finding a job here in Texas may offer you a different lifestyle in each city. San Antonio, Houston, DFW and Austin are all great metroplexes with (maybe excluding Austin) pretty decent returns and a great lifestyle. $800k for a 4-plex for instance where I'm at (DFW) would buy you a completely remodeled 4-plex right in the thick of things in downtown Dallas. Or you could be in Arlington for half of that. Both would offer you a much different lifestyle but one will cash flow much better than the other. 

    The income from the property comes first, as I don't need to live there if I don't want to after the first year. While it would be nice to have a property in a place that I want to live, it's secondary to finding a market with the best returns.

    At the moment I'm leaning toward the non-Austin metros, all for different reasons. 

    1Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Karl B.:

    I did a lot of research for the best cash flow and was close to investing in the Killeen area (preferably Harker Heights and perhaps Copperas Cove).

    Went with another market but as far as cash flow Killeen was pretty epic. Plus they have A LOT of 4-unit properties in that area. 

    I don't think it fits with my goals on this specific property, but I'll check out Killeen in the future. Thanks Karl. 

    0Reply
  • Kenneth McKeown
    Real Estate Agent 路 Dallas, TX 路 Member since 2016 路 432 posts 路 341 votes
    6y

    @Tyler D. if you're strictly looking for best returns - the above mentioned areas will be better than any of the large metroplexes. But if you want the lifestyle that comes with a large metroplex - then SA, DFW or Houston would all be viable options. 

    0Reply
  • Tyler D.
    OP
    Member since 2019 路 219 posts 路 99 votes
    6y
    Originally posted by @Kenneth McKeown:

    @Tyler D. if you're strictly looking for best returns - the above mentioned areas will be better than any of the large metroplexes. But if you want the lifestyle that comes with a large metroplex - then SA, DFW or Houston would all be viable options. 

    Thanks Kenneth. Which areas other than Arlington do you recommend for good cashflow?  

    0Reply
  • Kerry BairdPro Member
    Rental Property Investor 路 Melbourne, FL 路 Member since 2011 路 3k+ posts 路 2k+ votes
    6y

    Austin has a lot of growth and isn't so connected to oil.  I had a couple of plex units in Ft Worth but the property taxes got crazy high, taking much of my cash flow.  I sold and re-positioned in Florida (where hubby has his W-2 job).  The gain in equity was terrific.  Cashflow low, equity high.

    We bought houses in the US and UK, while we were stationed over there for 16 years, so I did a lot of research, too.  I prefer lateral trending markets, with in-migration, and a robust population.

    I just looked up cities over 500k and there are only 36 in the nation. Texas has a few, in order from smallest to largest: El Paso, Fort Worth, Austin, Dallas, San Antonio, and Houston.  After Macon, GA, Frisco, Sugarland and McKinney are the fastest growing cities in the nation, according to Wiki. 

    A rough quote of the Real Estate Radio Guys, "Live where you want to live, and invest where it makes sense."

    3Reply
  • Roland Brown
    Realtor 路 McKinney, TX 路 Member since 2016 路 106 posts 路 90 votes
    6y

    @Daniel Rainmaker I鈥檓 a Dallas area Realtor, I love selling houses, and am so jealous of the affordability of the Houston. My rental is down there馃槣.

    1Reply
  • Roland Brown
    Realtor 路 McKinney, TX 路 Member since 2016 路 106 posts 路 90 votes
    6y

    @CJ M., Sherman has a ton of merit, also I do end up putting investors that want to stay in DFW in Mellisa, Anna, and Cross roads

    1Reply
  • Roland Brown
    Realtor 路 McKinney, TX 路 Member since 2016 路 106 posts 路 90 votes
    6y

    @Tyler D'Alessandro, I鈥檒l second @Kenneth McKeown, to me the lifestyle of the city is a HUGE consideration, you have to feel the area out, each market, San Antonio, Houston, Austin, and my biased answer of DFW has a different feel.

    I think it鈥檚 a hard toss up between Houston and Dallas, holding the property for a long time, my own opinion DFW area will grow the best, the reasons are very clear, I live here, buying an apartment here and really wish it so馃槣.

    A little tongue in cheek.

    Do some market research the link below by Joe Fairless is high quality.

    https://joefairless.com/ultimate-guide-selecting-target-real-estate-market/

    Once you know your city and with a budget of 800k go get cashflow, and remember you鈥檒l want to sell that building someday. Make sure it鈥檚 something someone else will want to buy, or at least can be made into something someone will want.

    My 2 cents

    2Reply
  • John Gerst
    New to Real Estate 路 San Antonio, TX 路 Member since 2019 路 4 posts 路 3 votes
    6y

    I am a disabled vet as well, in the tech industry, and live in San Antonio. I am relatively new to REI but very familiar with the tech industry, especially in San Antonio, so I think I can offer some useful information that can at least validate the availability of tech jobs in San Antonio.

    The world of Cyber is growing like wild fire and there are only 3-4 major locations for Department of Defense Cyber and San Antonio is one of them.  You should have no issue with tech jobs in the San Antonio area.  You can PM me if you would like to talk more and I hope this helped.

    0Reply
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