I had my offer on my first investment property accepted this week! Location is in far north Dallas suburbs (Frisco/Prosper/McKinney). Should throw off slightly positive cash flow if I self manage, and also banking on solid appreciation. I intend to hold for long term.

Any advice from others on the forum about key things I need to be doing?

I'm planning to  heavily leverage technology to handle marketing, applications, scheduling showings, collecting rent, etc. so would also appreciate property mgmt software recommendations.

Thank you in advance!

Welcome to the madness, good luck!

I use SmartMove to screen tenants.  It give you a lot of good information. For collecting rent, I allow the tenants to use Zelle, PayPal, or deposit directly to my account.  I do not want to use a third party collector because I don't know what would happen if they steal the money.

+1 to what Neil said. I am using  tenantmagic to screen prospects and collect the rent myself using direct deposit or one of the EFT tools

Good luck, I just sold my duplex in North Dallas, three hail storms later and three roof replacements plus 8K in property taxes per year made me sell and move my money to other markets.  Appreciation will hopefully do well for you.

I use cozy to collect rent now after trying to get tenants to direct deposit into my account and sending reminders every month. They did direct deposit but I like that cozy sends the reminders automatically and is completely free. The downside is that it does take it 5 business days to get me the money so instead of the 1st, I typically get it on the 6th or 7th. They do have a paid service that gets the money quicker but the free version works well for me.

Thank you for the tips! I was looking into Cozy so @Lallu it's good to hear you find it helpful. I'll look into some of the other tools mentioned as well.

One quick question on listing/marketing the property when self-managing: how to best do this? There's so many websites out there to search for rentals...

Also any important things I should be doing (outside of normal home closing process) to prepare for managing the rental property?

On another note, prices definitely have come down in far north Suburbs (Frisco/Prosper/McKinney north of Eldorado), even in really good school districts. That allowed me to get a pretty good price for the rental property (~$200K) but also makes me concerned about how much lower it could fall. 

Again I'm committed to buy-and-hold strategy, and the area should see strong appreciation over long-term given 1) Great schools 2) Rapid commercial development 3) Extension/expasion of highway 380 and DNT 4) Big companies moving HQ's more and more north (e.g. PGA, Dr. Pepper) but doesn't mean it's easy to ignore the near-term noise!

Originally posted by @Alfie Park :

I had my offer on my first investment property accepted this week! Location is in far north Dallas suburbs (Frisco/Prosper/McKinney). Should throw off slightly positive cash flow if I self manage, and also banking on solid appreciation. I intend to hold for long term.

Any advice from others on the forum about key things I need to be doing?

I'm planning to  heavily leverage technology to handle marketing, applications, scheduling showings, collecting rent, etc. so would also appreciate property mgmt software recommendations.

Thank you in advance!

We pay a realtor to do the marketing and showings.  Once a tenant has signed the lease, we take over.

We typically push our tenants to pay via venmo.

IF we got to a larger volume of properties, we would do something else.  Honestly we are at the edge of the number of properties we are willing to manage ourselves. 

I think the biggest piece of advice is don't expect massive cash flow early on.  IT usually takes 18-24 months for us to get dialed into what we can get in rent, get good solid tenants and to get our properties repaired.  

I can say from experience, expect to spend a couple thousand dollars getting the property rent ready the first time.  Doesn't matter how clean the property is, there is always painting, a little work to do on the floor and I swear a random appliance that needs to be replaced.

A lot of the automation tools scare me.  To me this is a hands on business....not an internet business....I think a lot of these automation tools can set you up for disaster.   While I think the rent collection tools are interesting, I fear the day they're collecting rent from 1000doors and then go out of business....or maybe they do it for two months....and go out of business and never pay the owners.   It's not that risky and seems to work well just having tenants deposit in your bank account.  You can check the deposit from anywhere in the world or around the corner.

I would also not allow ever any automated showing system.  I think that opens you to lots of risk, even in a great neighborhood.   It only takes one to move in, leave the backdoor unlocked, leave a window unlocked and you have a real problem and really no one to go back to.   You might know the last person that went in, but tough to prove who left the door unlocked or open.

Alfie Park, today, you are my hero.  Please keep posting your journey.  I'm eager to hear more.

Quick update (and also request for advice!):

Got the estimated mortgage #'s back from lender and starting to get cold feet. Main concern is that what I assumed to be slightly positive cash flow might actually be break-even to negative cash flow depending on maintenance.

Numbers shared below:

1) $210K purchase price, 2.9% property tax rate, $120/month insurance, 4.125% 30 year mortgage @ 25% down, $40/month HOA

2) Comes out to $1,440/month in monthly payments which is what the lender quoted.

3) Market rate based on recent comps is $1,700 to $1,800/month so let's assume $1,750/month for easy math.

4) That leaves difference of +$310/month in cash flow but if I assume $100/month in maintenance/CapEx and assume 10% vacancy (so $170-$180/month vacancy costs) then it's essentially break-even.

Am I missing anything, and if it's break-even should I get out of the deal? If so I think I'm only on the hook for $100 option fee.

Thanks in advance for advice!

Have you thought about using an FHA loan? Interest rate should be better and FHA loans only require 3.5% down. One of the caveats is that you have to occupy the home. Works well if your buying a duplex.

I can't use the FHA loan b/c I don't plan to live in the house. Hard to move around with 3 little kids.

I decided to back out of deal paying $100 option fee. Next time will look for property with much bigger margin of safety for cash flow!

I can't use the FHA loan b/c I don't plan to live in the house. Hard to move around with 3 little kids.

I decided to back out of deal paying $100 option fee. Next time will look for property with much bigger margin of safety for cash flow!