First Rental Investment - Wichita Falls, TX

Investor · Houston, TX · Member since 2021 · 8 posts · 3 votes

Investment Info:

Single-family residence buy & hold investment (Section 8).

Purchase price: $100,000
Cash invested: $5,000 (downpament)

This would be my first investment property I'm looking to purchase in Wichita Falls, TX. It is a 3/1, the seller is willing to finance the deal at 8% interest for 30yrs. My monthly obligation would be $697.08 and Section 8 is paying $1,274/mo. I would also hire a property management for 10% since I would not be in the area to manage it myself.

I have around 20 of these that have the exact terms & might scoop up as well.

Is this a good/bad deal?

1 Reply

79 views

Most Popular Reply

Kyle MccawBusiness Member

Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes

@John Humphrey I am an active investor in Wichita Falls. I would want to look at your rental comps with a fine tooth comb. The section 8 rate does not seem to line up with my experience. 3 bed 1 baths are very common in the area but do more much slower than a 3/1.5 or 3/2.

I don't understand your last comment. Do you own 20 of these already? Or you plan to purchase 20 properties with the numbers in Wichita Falls?

McCaw Property Management4.4909 Reviews

Website View Page

3 Reply

See this reply in the discussion

9 Replies

Jump to latestLatest

Sort by

Kevin Coco-Senyszyn
Real Estate Agent · Keller, TX · Member since 2022 · 62 posts · 37 votes
3y
Based on the numbers you've provided, this deal seems to have solid cash flow with the Section 8 rent at $1,274/mo and your monthly obligation at $697.08. Considering property management at 10%, you'll still have a good margin.
@Kyle Mccaw has invested in more than a couple of similar deals in Wichita Falls recently and might have valuable insights to share. I would reach out to him and see what he thinks.
1 Reply
Alfred Litton
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
3y
Do be aware that your property taxes and insurance are going to on top of that. Together, those would be about $4000/yr. (I know. I own 4 homes in WF, so I'm very aware of the insurance and tax rates.) So that's going to put you at $1030 for PITI. Take 10% off your $1274 for management, and you're only clearing $116/mo. That seems mighty thin to me for something that is that cheap. I know WF very, very well. Section 8 housing that is going for $100K is potentially going to be in rough shape, in a rough neighborhood and have little appreciation potential. If the water heater goes out, for example, that's a year's worth of profit gone.
Best of luck to you, but I'd be a hard pass on this. I need bigger margins than that to justify the risk.
1 Reply
Mary lou L.
Investor · Wichita Falls, TX · Member since 2014 · 382 posts · 123 votes
3y
Hi! I live here in Wichita Falls. I have assisted out of town investors and I own property here as well. What area of Wichita Falls is this in? there is a wide range of houses in a very short distance. If you need any on site assistance I can help!
2 Reply
Kyle MccawBusiness Member
Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
3y
@John Humphrey I am an active investor in Wichita Falls. I would want to look at your rental comps with a fine tooth comb. The section 8 rate does not seem to line up with my experience. 3 bed 1 baths are very common in the area but do more much slower than a 3/1.5 or 3/2.
I don't understand your last comment. Do you own 20 of these already? Or you plan to purchase 20 properties with the numbers in Wichita Falls?
McCaw Property Management4.4909 Reviews
Website View Page
3 Reply
Alfred Litton
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
3y
@John Humphrey I really know nothing about Section 8, but the 4 sfhs I have in WF are all 3/2 and from 1100-1300 sf in B-class neighborhoods, and I rent those for $1100-$1250. They are mostly in the SW part of town, which is an attractive area for rental properties to be in. $1274/mo for such a property seems kinda high to me, but maybe others with more experience with Section 8 can enlighten me.
0 Reply
John Humphrey
OP
Investor · Houston, TX · Member since 2021 · 8 posts · 3 votes
3y
Quote from @Alfred Litton:

Do be aware that your property taxes and insurance are going to on top of that. Together, those would be about $4000/yr. (I know. I own 4 homes in WF, so I'm very aware of the insurance and tax rates.) So that's going to put you at $1030 for PITI. Take 10% off your $1274 for management, and you're only clearing $116/mo. That seems mighty thin to me for something that is that cheap. I know WF very, very well. Section 8 housing that is going for $100K is potentially going to be in rough shape, in a rough neighborhood and have little appreciation potential. If the water heater goes out, for example, that's a year's worth of profit gone.
Best of luck to you, but I'd be a hard pass on this. I need bigger margins than that to justify the risk.

Thank you for the feedback Alfred!
0 Reply
John Humphrey
OP
Investor · Houston, TX · Member since 2021 · 8 posts · 3 votes
3y
Quote from @Kyle Mccaw:

@John Humphrey I am an active investor in Wichita Falls. I would want to look at your rental comps with a fine tooth comb. The section 8 rate does not seem to line up with my experience. 3 bed 1 baths are very common in the area but do more much slower than a 3/1.5 or 3/2.
I don't understand your last comment. Do you own 20 of these already? Or you plan to purchase 20 properties with the numbers in Wichita Falls?
Mr. Mccaw,

I was planning on moving forward with these properties but based on on the feedback and re-calculating my numbers, I decided to pass on these.
2 Reply
Arif Mahmood
Member since 2020 · 1 post · 1 vote
2y
Hi I am a physician residing in Wichita Falls; own many single family homes. So far so good. But insurance and taxes have made a big dent in profits. I am also buying property in Lawton Oklahoma. Own close to 40 units and trying to grow as much as possible. I’ve been doing it for about 7 years now.
1 Reply
Sandra Wortham
Realtor · Wichita Falls, TX · Member since 2019 · 1 post · 0 votes
2y
I am a Realtor/Property Manager here in Wichita Falls and although it is harder to find those great deals that will cashflow, they definitely are still out there! Just have to look a little harder. Let me know if I can be of assistance to anyone looking or needing management in the area!
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.