First-time Investor in Central Texas
Member since 2021 · 7 posts · 1 vote
First-time Investor in Central Texas
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ voteswe are happy to help, but do you have any questions that are more specific? "how to analyze a deal" is pretty broad.
a few general reactions.
-definitely don't go by your "realtor's word" - that is utterly irrelevant. they are not making any promises or commitments as to condition, rent, tenant experience - everything after closing is on you. not on your PM, your agent, your appraiser - you, all you.
-you don't have analysis paralysis. that's a made up term by the people selling things to get people like you to buy the things. you are rightly cautious - buying a property is a huge deal. they will make money when you transact. you will not.
-one thing to do is: reset your expectations. a lot of new investors seem to be overly optimistic about the first few years of ownership. you should basically expect to be spending money and putting cash in for the first few years.
-it takes money to buy (closing costs); it takes money to lease out (usually the first month's rent to the agent or PM, plus potentially fees on on top of that); it takes money to get rent ready (things that won't be found until someone is living there.) then your dishwasher or furnace will break even though it's brand new and isn't supposed to. costs costs costs. maybe in year 6 or year 12 you actually generate some meaningful cash flow. not in year 1.
hope this helps.
12 Replies
- 10moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
we are happy to help, but do you have any questions that are more specific? "how to analyze a deal" is pretty broad.
a few general reactions.
-definitely don't go by your "realtor's word" - that is utterly irrelevant. they are not making any promises or commitments as to condition, rent, tenant experience - everything after closing is on you. not on your PM, your agent, your appraiser - you, all you.
-you don't have analysis paralysis. that's a made up term by the people selling things to get people like you to buy the things. you are rightly cautious - buying a property is a huge deal. they will make money when you transact. you will not.
-one thing to do is: reset your expectations. a lot of new investors seem to be overly optimistic about the first few years of ownership. you should basically expect to be spending money and putting cash in for the first few years.
-it takes money to buy (closing costs); it takes money to lease out (usually the first month's rent to the agent or PM, plus potentially fees on on top of that); it takes money to get rent ready (things that won't be found until someone is living there.) then your dishwasher or furnace will break even though it's brand new and isn't supposed to. costs costs costs. maybe in year 6 or year 12 you actually generate some meaningful cash flow. not in year 1.
hope this helps.
- Member since 2021 · 7 posts · 1 vote10mo
@Nicholas L. Hey! Thank you so much for your response! This was very helpful and validates why I've been feeling so wary about purchasing so quickly. I definitely find myself taking a pause now and recalibrating my expecatations. I came in pretty optimistic, started working with the first real estate agent who contacted me in Zillow and caught myself almost buying a $399k (prequalified for $400k) new-built duplex in Harker Heights. Thank you for providing all those possible obstacles and scenarios in buying my first investment. With the real estate agent now, I feel like I'm being pushed to buy something that sounds good instead of walked through in making an informed decision. Then again, I feel bad that I haven't been able to give a clear criteria of the properties I'm looking for, especially since I'm not familiar with today's temple/killeen markets.
- Member since 2021 · 7 posts · 1 vote10mo
@Nicholas L. So more specific question, what numbers and qualities of a property should I look at when deciding if a property shown by my realtor is a good deal or not? To avoid solely relying on my realtor's word.
- 10moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
well... still a broad question. hopefully if it's a new build, there won't be much capex in the first few years... but there absolutely still can be. things can just break. dishwashers, furnaces, really anything that can break will break. =)
you need to conservatively run your own numbers, and use actual numbers and not percentages. and... i suspect that the cash on cash return on a brand new 400K duplex is probably going to be pretty darn low. so, i would try to be realistic about whether that's the best use of your investment dollars or not. if you're putting 20+% down that's a huge amount of cash that is probably going to generate a very low return.
a lot of us on this site are trying to do value add in some way, like BRRRR. you don't have to... but again, then the returns will be lower.
if you post more specifics here in the forums folks will react / ask questions
hope this helps
- Member since 2025 · 53 posts · 2 votes10mo
Hey Arleene! I would love to chat with you about the market and see if I might be a good resource for you. I will send you a message!
- 10moTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
I own a mid term rental in Temple and think that the long term prospects in the area are very promising. Meandering through the next year or two will be interesting given increased inventory levels. And like everywhere else in Texas, property taxes and insurance have a strong influence on the success of a deal over the first few years.
I'd be happy to help and have nothing to sell if you want to send me a message.
- Member since 2021 · 7 posts · 1 vote10mo
Quote from @Travis Timmons:
I own a mid term rental in Temple and think that the long term prospects in the area are very promising. Meandering through the next year or two will be interesting given increased inventory levels. And like everywhere else in Texas, property taxes and insurance have a strong influence on the success of a deal over the first few years.
I'd be happy to help and have nothing to sell if you want to send me a message.
Sure! I sent you a message. Thanks so much.
- Member since 2024 · 18 posts · 8 votes10mo
As a property manager who often works with owners after they have purchased, the realtor often over estimates their knowledge. An expert in sales is not always an expert in rents. The best outcomes I have seen, are when the buyers reach out to the property manager during the option period. It is during this time, I often give a rental market analysis to my investors, so they know what realistic market rents would be. Having an expert in this field involved early, can save you from a bad deal before its too late.
- Member since 2021 · 7 posts · 1 vote10mo
Quote from @Matthew Doerbaum:
As a property manager who often works with owners after they have purchased, the realtor often over estimates their knowledge. An expert in sales is not always an expert in rents. The best outcomes I have seen, are when the buyers reach out to the property manager during the option period. It is during this time, I often give a rental market analysis to my investors, so they know what realistic market rents would be. Having an expert in this field involved early, can save you from a bad deal before its too late.
Thank you so much for this! Will definitely keep this in my mind. I was considering looking for property managers now while I shop around for properties. Would that be too early?
- 10moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 635 posts · 458 votes
Analysis paralysis is super normal on your first deal, especially when you’re relying on a realtor’s opinion without having your own framework yet. The good news is you don’t need to be an expert to make your first deal a good one, you just need a simple checklist.
Here’s the easiest way to break it down:
1. Start with one metric: Cash-on-cash return
This keeps things simple and stops you from drowning in spreadsheets.
A solid beginner target is 8 to 12 percent.
If the property hits that range after you account for:
mortgage
taxes
insurance
maintenance
vacancy (5 percent)
property management (even if you self-manage) then it’s worth considering.
Run every property through that filter first.
2. Use rent comps, not your realtor’s guess
You can check rents yourself for free:
Facebook Marketplace
Zillow Rentals
Rentometer
Apartments.com
If the rents your agent gives you are way above what you see online, assume they’re optimistic.
3. Pick one neighborhood and learn it deeply
Instead of bouncing between Harker Heights, Temple, Killeen, etc, choose one pocket and learn:
average rents
typical prices
which streets are great vs. which streets are trouble
which homes rent fastest
You’ll analyze deals faster because you’re not reinventing the wheel each time.
4. Run your own numbers, don’t outsource your judgment
Your realtor may be great, but they aren’t the one making the mortgage payment.
You only need a simple calculator like:
The BiggerPockets calculator
A basic Excel sheet
Even pen and paper works when you’re starting
If the numbers don’t work on paper, they won’t magically work in real life.
5. Don’t try to buy the “perfect” first deal
Buy the right-sized deal you can learn from and comfortably hold for 10 years.
Your first deal is about education just as much as profit.
Most investors look back and say, “I wish I’d bought sooner, even if the first one wasn’t perfect.”
You’re already ahead of 90 percent of people, now you just need one good, simple buy to break the paralysis.
- Member since 2024 · 18 posts · 8 votes10mo
If you are within 1-2 months of closing a property manager could give you solid input on market rents. Longer than that, the markets could adjust slightly. At a minimum the manager should be able to give an honest opinion about the property condition and if it needs major renovations to be rent ready.
- 10moMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
How do you know how experienced your agent is with investors and rentals?
Over 95% of agents only know how to do owner-occupied transactions:(
Logical Property Management4.9453 Reviews
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