Rental Property Investor · Austin, TX · Member since 2016 · 49 posts · 36 votes
Hey Esteemed BP'ers!
I hoping someone can point me in some direction. I am looking for a market for SFRs within 3 hours of Austin / Round Rock where the price to entry is 90k-120k for B Class areas. I have been doing some research, but I find myself turning in all directions. I would love to hear where some of you have had success. Thanks for your input.
Investor · San Antonio, TX · Member since 2013 · 213 posts · 182 votes
10y
Hello Nicholas Ameluxen
For rentals you need to follow the jobs and the people. San Antonio is by far the best city for rental properties.
If you're ever in town we can show you around.
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
10y
@Nicholas Ameluxen Are you looking for rentals, fix & flip, turn key, etc? You can get a good rental in Killeen/Waco for that, and there's still a few flips in San Antonio that could stay under your $120k budget.
Virtual Assistant · La Grange, TX · Member since 2016 · 3 posts · 0 votes
10y
Would you be interested in a SFR purchase? Have an investment opportunity about an hour from Austin. Looking for private money to purchase, do the flipping myself over 6 years {teenagers in school}, then get out of.
Rental Property Investor · Austin, TX · Member since 2016 · 49 posts · 36 votes
10y
Jason Hirko I am interested in buy and holds. I had looked at Waco and visited a few times, but besides the college it didn't seem it had much there, I haven't been to Killeen but I have done some research. I got kind of the same impression as I did of Waco, Killeen seems pretty dependent on the base. Perhaps I am being too picky? Have you had success in either area? Thanks!
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
10y
@Nicholas Ameluxen well Baylor and the base aren't going anywhere, so if you can tap into them, could be good. In my opinion, they aren't good for flipping because the houses are too cheap, but make good rentals as there is always demand.
Killeen is definitely at or below those price points. And I agree with @Jason Hirko - most investors are about rentals, not flips, though I wrote an article on my website about the flips I've observed local investors pull off.
I wouldn't worry about the base at all. It's the largest US military base by population in the world. Lots of other reasons I've mentioned in other posts about why it's not going anywhere. The rental market isn't going anywhere either. There are other investor headwinds (high turnover, high transaction costs, most homeowners have low equity), but I wouldn't cross it off my list.
Rental Property Investor · Austin, TX · Member since 2016 · 49 posts · 36 votes
10y
Thank you @Brian Adams and @Jason Hirko! If you don't mind me asking, where would you recommend looking in Killeen? I have been using my weekends to take trips to some of these areas, and will make sure Killeen will be my next stop.
I was kind of unimpressed with Waco near Baylor, but it's possible (and probable) that I didn't do enough research.
I see that you're a Real Estate Agent Brian, do you work with investors in your area? Or perhaps can recommend someone who does?
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
10y
@Nicholas Ameluxen You have to be very clear on what you're looking for. I'm not impressed by anything about Waco either, except if you are looking for C class neighborhoods where you can meet the 2% rule, then it's beautiful.
Rental Property Investor · Dallas · Member since 2012 · 107 posts · 69 votes
10y
@Nicholas Ameluxen Check out Temple while you're in Killeen. I think it's cleaner and safer. Has a lot of medical professionals in the area as well as also gets some of the officers that work at Ft Hood. It's also not as dependent on Ft Hood as Killeen is. I have four units in Temple. The west side of Temple is the best, try and get in the Belton school district.
Houston, TX · Member since 2012 · 2 posts · 1 vote
10y
I would echo what Matt G. said about the Belton School District. I grew up in Temple (currently in Houston) and my mom has worked for TISD in the past and now works for BISD so I am still plugged in. Over the past 10 years there has been lots of migration towards Belton or portions of Temple within BISD. Not to say there is anything wrong with TISD but BISD currently has a better reputation.
I am also interested in buy and hold in the Killeen/Temple/Belton area since it was home for 18 years but I have just started looking at it through the eyes of an investor. I would be interested to hear what you learn.
@Matt G., have you had any trouble finding renters for your units in Temple?
@Tyler Ray I'll be sure to share my experiences here on BP, but always feel welcome to drop me a line. Seems like you have way more experience in the area than I ever will. Cheers to your success.
Woodbridge, VA · Member since 2015 · 44 posts · 7 votes
10y
@Nicholas Ameluxen I'm looking in Killeen myself, mostly in zips 76542 and 76543 concentrated around two Wal-Marts. @Brian Adams is an ambitious Realtor and investor in the area that has been very generous in helping an out of towner get acquainted with the area.
I currently getting my ducks in a row, then I am looking to jv with someone on the ground as I live in Virgina and am priced out of B neighborhoods. My only option is East and West of Baltimore city, and that's a no go for a newb.
Please share what your market analysis turns up and good luck.
Rental Property Investor · Austin, TX · Member since 2015 · 43 posts · 8 votes
10y
Hey @Nicholas Ameluxen I'm in the same boat, but I'm looking to invest in multis. If that something that you might like let me know and we can probably meet up and talk some more. I'm in Cedar Park. I'm currently trying to buy my first multi - but people keep over paying for properties making it difficult to compete.
Investor · Austin, TX · Member since 2011 · 155 posts · 23 votes
10y
The thing about Killeen is when the military make cuts or troops get deployed it is like a ghost town, which may make prices cheaper. It is a good price point for rentals and I have been doing my home work there and I have my eye on a few neighborhoods that should yield good returns.
Killeen, TX · Member since 2015 · 85 posts · 60 votes
10y
I guess I'll put my two cents in on this topic. I've said this before on some of my past posts. I'll say it again. Sure, if all out war occurs and every unit is deployed, the entire city of Killeen will be in trouble...and if that occurs we have bigger problems than getting wealthier.
Killeen is largely dependent on federal government. In my mind, this is a good thing. The military and government employees will always get paid. If it comes down to it, the government will print more money to pay the military. The military is what keeps the whole stack of cards together so they will get paid.
With the huge government influence our economy is largely recession proof. In 2008, during the financial crisis and the great recession our unemployment rate was under 6%. There were parts of the country much, much higher than that. The national average was 10%. I'm not concerned about military draw downs at all. Just considering population growth, this area gets bigger and bigger every year. It's grown over 43% since the last census in 2000. The cool thing is a lot of that population growth is retired military settling here like I did....more steady government paychecks.
I own 7 rentals in Killeen and I'll accumulate a lot more as time passes. I'm always on the hunt to buy another property at the right price. Killeen's stable economy centered off Fort Hood is why I chose to retire here after my military career. My rentals act like little cash registers across the city, opening with consistency every month with new deposits.
If you choose to invest here, nothing is risk-free and our market has some pitfalls. I tell every potential investor to find a qualified, verified expert to guide them. We have a dynamic rental market and your mentor needs to know it like the back of their hand...or you could be another statistic. It's not hard to find out who the experts are...real estate is public record. Just run their name in the Bell and Coryell CAD and see if your mentor owns the property they say they do.
Where ever you chose to invest, please find an expert in that market. Going it alone is the quickest way to lose everything you worked for. Real estate investing is complex and market dependent. You won't get everything you need from a book, webinar or seminar. You need a real demonstrated expert in the market you choose. Finding a verified expert isn't easy...but it's not hard either. Good luck to you all.
Investor · San Antonio, TX · Member since 2013 · 213 posts · 182 votes
10y
Hello Nicholas Ameluxen
For rentals you need to follow the jobs and the people. San Antonio is by far the best city for rental properties.
If you're ever in town we can show you around.
Rental Property Investor · Austin, TX · Member since 2016 · 49 posts · 36 votes
10y
Thanks for the replies!
@Account Closed I may take you up on that. I had briefly looked at San Antonio, but it seems like most of the good neighborhoods are in very small pockets, so some insight from someone who invests there would be much appreciated.
Killeen pitfalls: it's a buyer's market, so sellers often pay very high closing costs (commissions, 3%-ish buyer closing costs, title policy, survey, $500 toward home warranty) that can make transaction costs as much as 12% of your sales price.
There is a lot of new housing AND a lot of turnover with military moving in and out, meaning a lot of new mortgages and homeowners with no or even negative equity. The VA loan makes it worse. It's great, but 100% financing and financing in the funding fee means literally every VA purchaser is underwater on their home for the first 5 or so years. 54% of buyers use a VA loan in our area.
No appreciation - or rather, just enough to keep up with inflation. I don't recommend purchasing for appreciation in any market, but especially not Killeen.
The high turnover also impacts rentals - 2-3 year is the typical duration of any given tenant. The turnover means you can keep units filled if marketed right, but still, turnover is no fun.
Some of these "pitfalls" are also advantages. For example, the relatively new age of homes (the median is only 15 years old, built 2001) means that they will be more modern and hopefully fewer major capex requirements - which is good for a buy and hold investor (not so much flippers who need those kinds of problems to get deals).
Killeen, TX · Member since 2015 · 85 posts · 60 votes
10y
Brian is all over it. Another key thing is understanding tenant behavior here; it's vital for profitability and mitigating your vacancy risk. There is no one size fits all in Killeen. Tenants react and desire different amenities in different areas. For example, you may get by without a garbage disposal in one neighborhood but it's a necessity to stay competitive in another. Tenants react differently to different residential structures too. Understanding the psychology of your target consumer is vital to surviving and thriving here. Each target market will have unique characteristics and tastes. It's simply business 101. If you can figure out Killeen and intimately understand the demographics, the competition and consumers in the area where your property is located, you'll do fine...provided you properly valued your acquisition and didn't over-pay for it when you brought it. Valuation is essential! If you overpay for even the best asset; you will lose money.
It's very informal, usually 6-12 people show, often some newbies, but I'd still recommend it to anyone who is interested in our market. I try to make as many as I can.
Investor · Temple, TX · Member since 2015 · 111 posts · 80 votes
10y
Hi, @Nicholas Ameluxen. I'm a beginning investor in Temple, and the market here is good. I just bought my first duplex in the historic area of Temple, with a couple more acquisitions in the works. You basically have your pick of what level of rental/tenant/neighborhood you'd like - we have it all here. Pay more for a property, but have better tenants and fewer headaches. Pay less for a property and have higher cash flow, but expect to put in more time and capital.
The school are ok, but they're not bad. The medical community is robust and growing. We also have strong city government and a surprisingly large manufacturing/business base. All of these contribute to a rental housing shortage for A to B class tenants.
I'm new to making money in real estate, but not new to real estate at all. I've lived here 19 years, so I know my neighbors and my town. I think it's a great place to invest. PM me if you'd like to meet sometime when you're in the area.
Killeen, TX · Member since 2015 · 85 posts · 60 votes
10y
Nicholas - I've popped my head into that meetup a couple of times. I recommend you give it a shot. You'll meet some like-minded people and maybe make a friend or two. That's how Brian and I met. I'd like to stop by more often but my schedule doesn't seem to permit it lately.
Investor · Austin, TX · Member since 2013 · 662 posts · 1k+ votes
10y
Intersting discussion to say the least. I think Brian's advice is spot on. I live in Austin, and consider myself a small time MFR buy and hold investor. Over the last ten years of looking and buying I have been lured into the Killeen Ft. Hood area due to unusually lower entry cost into MFR. There are new subdivision going up all the time. Being a 20 year Air Force Vet I understand the VA loan process and I think with the high concentration of soldiers there is a lot of individuals buying homes there that shouldn't. Therefore someone looking for appreciation should be concerned. I feel that the market is over built. Buy and hold for cash flow is safer but has its perils as well. Ft. Hood will not close, too big to do that but the troop strength stationed there varies wildly at times. Just last week, the base just announced they are renting on base housing to civilians because they have too many houses vacant. That should be a big warning to all real estate investors!!
Killeen, TX · Member since 2015 · 85 posts · 60 votes
10y
It's not a warning sign for me. I will continue buying real estate here and I'll buy more. Real estate is a business in every since of the word. Every business must compete to survive and thrive. I own 7 income properties and I haven't had any problems with vacancy at all. I just finished a renovation in August and it sat on the market for 4 days before it was leased. A lot of investors have a false sense of what this business is. They feel they'll just purchase a property and high-quality tenants will come. That's not the case, investors have a real estate business and they have to compete. I view every available rental on my block as a competitor and I make my units better. From curb appeal to interior, I strive to have the best rental on the block. That's why I don't have any major problems with vacancy in Killeen. Walmart has to compete with Target and real estate investors have to compete with each other for consumers from presentation to pricing.
Despite Fort Hood possibly shrinking in active duty soldiers, the city of Killeen is growing significantly. A growing population means a growing consumer base of tenants. Just check out U.S. census data over time and see for yourself how much Killeen has grown. Fort Hood can offer base housing for rent if it wants but tenants aren't gonna be given to them. Their property managers will have to compete with me on design and price...they are gonna have to earn it and my units have been hard to compete with.