Getting Started North of McKinney

Dallas, Texas
Dallas Real Estate Forum
5yFollow

Getting Started North of McKinney

Andrew Jones
Allen, TX · Member since 2016 · 28 posts · 16 votes

After a long time saving and learning I've got the nugget I want to use to begin my REI journey. My current plan is:

Single family 3/2's along the McKinney to Dennison stretch of 75. Looking in lower middle class areas where cash purchase + rehab comes in at 120k. While I'm local (Allen) I need to approach this as if I were out of state. That means working with an agent, gc and property manager who can work online and with minimal physical presence. I have access to legal and accounting from my software consulting. I'm looking BRRRR to hold, but should have flexibility by not needing to finance out of the gate should a different exit be needed.

My next step seems to be contacting agents and property management in the area.  Once the hunt begins in earnest finding a contractor will be the biggest hurdle.  I've been reluctant to make these calls in the past because I don't want to waste people's time.  Now I'm ready to move forward and it's time to meet people.

Wish me luck!

11Reply
92 views

Most Popular Reply

Alex Grosvenor
Realtor · Dallas, TX · Member since 2020 · 146 posts · 148 votes
5y

Hey Andrew. Nobody ever wants to make those calls. It’s the people who do that are successful. 
Good luck on your journey! 

3Reply
See this reply in the discussion

22 Replies

Jump to latestLatest
  • Kayla Davis
    Rental Property Investor · Washington, DC · Member since 2020 · 13 posts · 8 votes
    5y

    Best of @Andrew Jones !

    I’m still in my learning and planning phase. But I’ll be following in your shoes as early as Q1 2021 if I find the right deal.

    2Reply
  • Alex Grosvenor
    Realtor · Dallas, TX · Member since 2020 · 146 posts · 148 votes
    5y

    Hey Andrew. Nobody ever wants to make those calls. It’s the people who do that are successful. 
    Good luck on your journey! 

    3Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    5y

    I like your thinking.  I think there is probably better opportunity in the small towns like Van Alstyne, Leonard, Bells, Bonham, Maybe Celina or Melissa if it is older original home and maybe Sherman.  That is price wise.  it would be tough to find much for $120,000 any more in Allen or McKinney I would think. 

    My suggestion is never be hands off with GC.  There may be some you can be hands off with, but I think that is rarer in the smaller places and you see stories all the time on different investor forums about people losing their money to GCs.  Even the best ones I would think you want to be there pretty often while they are working and checking quality and progress and pay as you go.  No big deposits up front.

    The risk with the smaller towns are the trades and PM.  There may be one guy that does AC, one that does electric, etc...so your jobs can take longer, potentially pricier, and if you have to get people from another neighboring city they might charge trip fees and such.   PM there might be one that is really active in a lot of those places.   You can also potentially self manage.

    My thought is you want or need to be involved some...and not just turn it over to a 3rd party.  Some people probably get lucky and it all works out like that, but I think some people also get robbed.  Same with any other investment.

    3Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    Thank you to everyone for the encouragement!

    @Bruce Lynn, you're right about areas like Allen.  My 3/2 in an older neighborhood would go for 200ish, that's about 4% appreciation.  It's just outside of my price range right now. However, if it's in your range, Allen is a great place and probably pretty low hassle.  Next door is a rental, and I've had two neighbors over 17 years.  Anecdotal, but the other rentals nearby are well kept and occupied.  The local EDC has a lot of growth on the roadmap, even now.

    As for contractors, I'm hoping to find some referrals or at least get references.  I'm willing to pay a bit more for reliability, particularly on my first outing.  My plan is to split the draws into 3 or 4 pieces, progressively larger, as the properties I'm looking at will probably support projects of that size.  While I'm expecting to do walk throughs on draw days, it's not practical for me to wander around construction sites since Old House + Construction Site + Wheelchair = PITA.  Photo/video communication is going to be important for similar reasons.  I anticipate doing more work on the front end vetting and am willing to accept that.  Are there other steps I can take to mitigate the risks associated with comparatively smaller pools to draw from?

    1Reply
  • Christian Oaxaca
    Real Estate Agent · Denver, CO · Member since 2020 · 5 posts · 1 vote
    5y

    @Andrew Jones Hi Andrew. I know of a very knowledgeable realtor in the Dennison area who is also an investor. Send me a message if you'd like!

    1Reply
  • Mike Freeman
    Investor · McKinney, TX · Member since 2014 · 19 posts · 5 votes
    5y

    The best Property Management companies have contracts or agreements with contractors who they use for trouble calls and repairs if the property owner wants to use the PM's contractors.  When you vet the property management companies in your search, get the details on their process of repairs/trouble calls, the names of the contractors they use, etc. Some PM companies would handle the rehab of the property for you, using their contractors.  Just perform the due diligence in your PM selection and their contractors.

    1Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    @Christian Oaxaca will PM.  Thanks!

    0Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    First offer out.

    0Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    ...and got outbid.  Looking for next!

    0Reply
  • Jeff Peters
    Rental Property Investor · Dallas | Fort Worth · Member since 2020 · 9 posts · 6 votes
    5y

    Hello Andrew. I also see value in the 75 corridor north of Mckinney and have my first rental in Anna (purchased in Sept 2020). I self manage this property along with 2 others in Allen. I currently use PM software called Hemlane. I definitely recommend checking this out (if not already familiar). Good luck!

    2Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    Got a base hit under contract!

    0Reply
  • Kellie Davis
    Aubrey, TX · Member since 2021 · 13 posts · 11 votes
    5y

    Hi Andrew! I'm new here and am moving to that area from Northern California this summer. I found a great realtor who works with investors, and she set me up with a local mortgage company. The area is hot right now and houses are getting multiple offers, offers over asking price, cash buyers etc. So it def helps to have everything lined up and a strong local team of recognizable names to help move along the process. 

    0Reply
  • Jake Tansanco
    Rental Property Investor · San Francisco, CA · Member since 2021 · 16 posts · 8 votes
    5y

    I'm a new investor and I've decided to make Dallas as my first investment out of state. For months, I researched about how real estate investing and finally decided to reach out to a broker in BP (originally was going for Austin but got priced out of the area and the agent referred me to a broker in Dallas). I was looking around Plano, Allen, and McKinney but man oh man the market is HOT! Some houses below $250k would be under contract in 24 hours! Lots of bidding war going on for sure due to limited supply. Luckily, I was able to find an off-market house and the seller accepted my offer today. The fun part begins in the next 30 days.

    2Reply
  • Uriah Rohrbacher
    Mckinney, TX · Member since 2019 · 8 posts · 0 votes
    5y

    Congrats Jake, you are spot on with the current state of the market. I live in North McKinney myself and am having similar issues with other clients on getting offers accepted. Glad you found a property!!!

    0Reply
  • Richard Helppie-SchmiederPro Member
    Flipper/Rehabber · DFW · Member since 2020 · 374 posts · 208 votes
    5y

    @Andrew Jones and everyone else in this forum. There is a great local meetup next Saturday in Dallas at Halcyon Coffee and would love to invite you. There are a few realtors that know the investment world, some lenders and some contractors (such as myself) and think there may be a ton of value within the hour that we meet. Please send me a DM and I can fill you in. Typically 10-15 people and @Alex Grosvenor who commented on this thread can vouch for the value. Would love to see you there!

    0Reply
  • Jake Tansanco
    Rental Property Investor · San Francisco, CA · Member since 2021 · 16 posts · 8 votes
    5y

    @Uriah Rohrbacher Thank you! Inspection came out clean. Gonna lock up this gem before it gets away.

    @Andrew Jones Good job! Keep us posted on your journey.

    1Reply
  • Pimwadee Limsirichai
    Contractor · Dallas, TX · Member since 2019 · 52 posts · 35 votes
    5y

    Hi Andrew,

    I'm so excited to learn that you are starting your journey in real estate investing!! It's such a rewarding place to be. It's a lot of hard work at first, but once you get the hang of it, it'll be like putting bread in the toaster :D

    We are investors ourselves, and have our own construction company that takes care of any renovation needs we may have, along with building new construction when a client is interested. We would be happy to take on any renovation projects you, or anyone you know, may find in your real estate investment journey! :)

    Let me know if you have any renovation/construction questions! I'm happy to help in any way I can!

    0Reply
  • Andrew Jones
    OP
    Allen, TX · Member since 2016 · 28 posts · 16 votes
    5y

    Closed today!

    0Reply
  • Christopher B.
    Investor · Southeast, MI · Member since 2016 · 425 posts · 184 votes
    5y

    @Andrew Jones, congratulations.  Can you share the details?  You too @Jake Tansanco.  For someone out of state like myself, I'm wondering what Dallas brings in terms of return.  Certainly, for years, it's been known to check all of the boxes economy-wise.  

    0Reply
  • Jake Tansanco
    Rental Property Investor · San Francisco, CA · Member since 2021 · 16 posts · 8 votes
    5y

    @Christopher B. Thank you! Based on my research, metro DFW has very high appreciation. Lots of companies moving there which means more job and population growth. Local government seems to be investing a lot in the city too. You can also get 8-16% cash flow in the suburbs or outside the metro with good appreciation too. The thing that eats cash flow is the high property tax (a little over 2% in some cases).

    0Reply
  • Justin Kelly
    Member since 2021 · 2 posts · 0 votes
    5y

    I'm a local Realtor here in Denison, TX at a very well reviewed Real Estate Brokerage/Property Management company. Aside from that aspect, I'm also an investor into the market, with a very similar target as yours. I closed on my first BRRRR last year, and put another one under contract last month and I'm working to get that deal closed.

    I think something you will find in this area is that pricing can be found for very close to what you're looking for, but that sometimes comes with added difficulty on the closing end. For instance, the property I currently have under contract the owner approached me knowing I'm an investor, and asked if I would buy it as is on a cash deal. We came to an agreement, but we are now having a difficulty closing on his end due to extenuating circumstances unrelated to the property. 

    This has been about a month journey, and has been much more leg work on me getting everything that needs to be done scheduled when it should be 100% of the sellers responsibility. That being said, the seller is not a "get it done" type of person, so if I want the deal it falls on my shoulders to do. BUT once it's done, I will have probably twice my purchase price in instant equity, before I even invest a penny into the stud up renovation. 

    One of the most important things to me is having multiple exits on a property to account for anything unexpected in the future. 
    Unlike the stock market, there are a multitude of different ways to exit a position in Real Estate. Buy and hold(turnkey), BRRRR, fix and flip, wholesale, etc. The better price you buy at, the more exits become available. In a smaller market such as mine (Sherman, Denison, surrounding small towns) the market is positioned in a way that certain deals (usually off market) offer so many different exits, I have people ranging from brokers, contractors, and investors offering to financially back some of these deals.

    0Reply
  • Dhiraj Chhabra
    Member since 2020 · 38 posts · 13 votes
    4y

    @justin I own 5 units in Sherman and would love to network about the market and help each other out.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free