28, in tech, looking to buy my first deal in Texas -- advice welcome
Member since 2026 · 5 posts · 6 votes
28, in tech, looking to buy my first deal in Texas -- advice welcome
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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votesYou are correct - cash flow is a myth with 20-25% down long term rentals in year 1, 2, or 3 if you are honest about your expenses.
There is no secret market or secret strategy. Every idiot with a pile of cash is chasing after these assets. That doesn't even mention first time homebuyers who have been shut out of the market and are desperately trying to get into their first house. Too much demand, no forced selling, there is no margin without a lot of patience or work. Owner occupied and value add (if you know what you are doing) are the only options that seem to make sense in the current market. Neither one of them come with cash flow unless you suffer through a lot of work and pain to get there.
16 Replies
- Real Estate Broker · DFW · Member since 2015 · 350 posts · 270 votes2mo
your bar is probably too high to be honest. I'm not sure what return numbers you're trying to achieve but tons of new investors want "10% cash on cash, on market able to do full inspections, in good areas". If you're just focused on pure yield be prepared to be a slum lord and own in the worst areas. If you're looking for better cash flow you need to be comfortable buying off market properties at discounts and renovating them. At today's prices and rates its really hard to find cash flow but houston and san antonio are way better than DFW and Austin for that.
For reference a great on market deal here in DFW in a non D area will get you maybe $300 a month in cash flow. I have a property listed right now in fort worth at 215k and gross rents on each side of the duplex are around 2k to 2.1k per month total. That's about as good as you're going to find in appreciation markets if you're looking for just LTRs.
Where you can actually generate yield right now are more creative options - Coliving/rent by the room, smaller apartment complexes, Air BNB. Single family is hard to scale.
One thing to consider as well is your cash flow goal, while anything you buy should cash flow to cover all obligations you're going to be way better off buying something in a B or A area that nets $200 a month vs buying something in a D area that on paper nets 1k a month. All the real money is made in real estate investing via appreciation either forced or natural. I learned that lesson the hard way and only buy in good areas now.
Good luck!
- Member since 2026 · 5 posts · 6 votes2mo
Quote from @Harrison Sharp:
your bar is probably too high to be honest. I'm not sure what return numbers you're trying to achieve but tons of new investors want "10% cash on cash, on market able to do full inspections, in good areas". If you're just focused on pure yield be prepared to be a slum lord and own in the worst areas. If you're looking for better cash flow you need to be comfortable buying off market properties at discounts and renovating them. At today's prices and rates its really hard to find cash flow but houston and san antonio are way better than DFW and Austin for that.
For reference a great on market deal here in DFW in a non D area will get you maybe $300 a month in cash flow. I have a property listed right now in fort worth at 215k and gross rents on each side of the duplex are around 2k to 2.1k per month total. That's about as good as you're going to find in appreciation markets if you're looking for just LTRs.
Where you can actually generate yield right now are more creative options - Coliving/rent by the room, smaller apartment complexes, Air BNB. Single family is hard to scale.
One thing to consider as well is your cash flow goal, while anything you buy should cash flow to cover all obligations you're going to be way better off buying something in a B or A area that nets $200 a month vs buying something in a D area that on paper nets 1k a month. All the real money is made in real estate investing via appreciation either forced or natural. I learned that lesson the hard way and only buy in good areas now.
Good luck!
I appreciate your reply, that is what I keep finding most of the places I look. I believe we'll need to buy in A - B areas and hold for the appreciation, even if it means putting down 50-60% as long as there is some cashflow and the CoC is reasonable.
- 2moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
hello. if you didn't find any cash flow you did everything right - there isn't any on LTRs right now. none.
i BRRRR and break even when i'm done. i get the equity bump. hopefully the cash flow will come eventually.
- 2moTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
You are correct - cash flow is a myth with 20-25% down long term rentals in year 1, 2, or 3 if you are honest about your expenses.
There is no secret market or secret strategy. Every idiot with a pile of cash is chasing after these assets. That doesn't even mention first time homebuyers who have been shut out of the market and are desperately trying to get into their first house. Too much demand, no forced selling, there is no margin without a lot of patience or work. Owner occupied and value add (if you know what you are doing) are the only options that seem to make sense in the current market. Neither one of them come with cash flow unless you suffer through a lot of work and pain to get there.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes2moAnd the next question is, do you understand all of the things that really go into deciding? Advice comes with the bias of the person giving it.
Quote from @Javier Perezanta:
Hey everyone, first post.
I'm 28 and work in tech. I've been reading this forum for a while and I'm finally at the point where I want to buy my first investment property (or two). Looking at Texas, mostly Houston and San Antonio, though I'm open to Dallas or Austin if the numbers work.
I'm going for cashflow, not appreciation. I've run a lot of listings through my own model at this point and killed all of them, which I assume is normal but it does make me wonder if I'm looking in the wrong places or have too high a bar.
If anyone here is active in these markets and wouldn't mind giving a new guy some direction, I'd appreciate it. Even just telling me what I'm probably getting wrong would help.
Appreciate your time.
Their goals, access to cash, buying techniques, plans for taxes may differ than yours.
We buy not using real estate agents and that saves at least 3%, or $9,000 on a $300,000 purchase and when we sell it's the same thing. We save at least another $9,000 and often times we keep the 3% interest rate the seller had, which can save nearly $200,000 over the life of the loan.
So, you need to know what their goal is and how they are approaching it, to compare apples to apples. - 2moJacob CamhiBusiness MemberHinton, WV · Member since 2026 · 132 posts · 40 votes
it sounds like you're probably seeing what everyone else sees on the mls. for strong cash flow in texas, especially in competitive markets like houston and san antonio, it's really tough to find it on-market. i'd suggest looking at your county's public records instead of just listings.
your county tax assessor or recorder websites for harris (houston) or bexar (san antonio) counties let you pull lists for free. try stacking a few filters: look for absentee owners who have owned the property for a long time (say, 10+ years) and haven't refinanced recently. also, check city or county sites for properties with code violations or delinquent taxes. these types of signs mean the owner might be more motivated to sell at a price that works for your cash flow model, rather than just waiting for market appreciation. it takes more legwork than scanning listings, but it's where i often find my best deals.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2mo
Quote from @Javier Perezanta:
Hey everyone, first post.
I'm 28 and work in tech. I've been reading this forum for a while and I'm finally at the point where I want to buy my first investment property (or two).
Sorry, but you got this all wrong.
Real estate is actually not very good at cash flow. It's superpower is long term equity. Businesses are the opposite: hard to build equity with roof washing business, but easy to cash flow. Because a business is literally designed for cash flow.
Also, you are in tech. That's your competitive advantage. Why would you not use that instead? Cashflowing an LTR at 7% interest rates is hard enough in your back yard, impossible if you do it remote, which adds an extra layer of cost and inefficency; you'll be bleeding money for years. - 2moDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 982 posts · 643 votes
Welcome @Javier Perezanta. I don't think it's unusual at all. I passed on plenty of properties over the years because the numbers just weren't there. Looking back, I'm glad I waited for the right ones instead of forcing a deal.
Spark Rental Co-Investing Club577 Reviews - 2moCameron TopePro MemberProperty Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
Quote from @Javier Perezanta:
Hey everyone, first post.
I'm 28 and work in tech. I've been reading this forum for a while and I'm finally at the point where I want to buy my first investment property (or two). Looking at Texas, mostly Houston and San Antonio, though I'm open to Dallas or Austin if the numbers work.
I'm going for cashflow, not appreciation. I've run a lot of listings through my own model at this point and killed all of them, which I assume is normal but it does make me wonder if I'm looking in the wrong places or have too high a bar.
If anyone here is active in these markets and wouldn't mind giving a new guy some direction, I'd appreciate it. Even just telling me what I'm probably getting wrong would help.
Appreciate your time.
Javier,
What's your definition of a good cash-flowing deal?
As others have mentioned, cash flow is tight right now.
We just went through one of the greatest waves of appreciation in history, and rents have not kept up.
Combine that with Texas being a high property tax and Houston being a high-premium insurance town, cash flow is hard to come by.
So what are you trying to accomplish by buying real estate?
- Member since 2026 · 5 posts · 6 votes2mo
Quote from @Cameron Tope:
Quote from @Javier Perezanta:
Hey everyone, first post.
I'm 28 and work in tech. I've been reading this forum for a while and I'm finally at the point where I want to buy my first investment property (or two). Looking at Texas, mostly Houston and San Antonio, though I'm open to Dallas or Austin if the numbers work.
I'm going for cashflow, not appreciation. I've run a lot of listings through my own model at this point and killed all of them, which I assume is normal but it does make me wonder if I'm looking in the wrong places or have too high a bar.
If anyone here is active in these markets and wouldn't mind giving a new guy some direction, I'd appreciate it. Even just telling me what I'm probably getting wrong would help.
Appreciate your time.
Javier,
What's your definition of a good cash-flowing deal?
As others have mentioned, cash flow is tight right now.
We just went through one of the greatest waves of appreciation in history, and rents have not kept up.
Combine that with Texas being a high property tax and Houston being a high-premium insurance town, cash flow is hard to come by.
So what are you trying to accomplish by buying real estate?
Fair points, and pretty much what I've run into. Between rates, taxes, and insurance, cashflow is hard to find right now.
The deals that do cashflow have all been in C+ and D areas that we probably won't venture into. So we've realized we're comfortable putting more down, if that's what it takes to make a property work in a better neighborhood. Open to either approach, I just care more about a solid area and steady cashflow than stretching for yield. - 2moCameron TopePro MemberProperty Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
Quote from @Javier Perezanta:
Quote from @Cameron Tope:
Quote from @Javier Perezanta:
Hey everyone, first post.
I'm 28 and work in tech. I've been reading this forum for a while and I'm finally at the point where I want to buy my first investment property (or two). Looking at Texas, mostly Houston and San Antonio, though I'm open to Dallas or Austin if the numbers work.
I'm going for cashflow, not appreciation. I've run a lot of listings through my own model at this point and killed all of them, which I assume is normal but it does make me wonder if I'm looking in the wrong places or have too high a bar.
If anyone here is active in these markets and wouldn't mind giving a new guy some direction, I'd appreciate it. Even just telling me what I'm probably getting wrong would help.
Appreciate your time.
Javier,
What's your definition of a good cash-flowing deal?
As others have mentioned, cash flow is tight right now.
We just went through one of the greatest waves of appreciation in history, and rents have not kept up.
Combine that with Texas being a high property tax and Houston being a high-premium insurance town, cash flow is hard to come by.
So what are you trying to accomplish by buying real estate?
Fair points, and pretty much what I've run into. Between rates, taxes, and insurance, cashflow is hard to find right now.
The deals that do cashflow have all been in C+ and D areas that we probably won't venture into. So we've realized we're comfortable putting more down, if that's what it takes to make a property work in a better neighborhood. Open to either approach, I just care more about a solid area and steady cashflow than stretching for yield.I totally agree with not going into C and D areas - I made way more money on my A and B class properties.
But why are you investing?
What are you trying to achieve by investing in real estate?
- Member since 2026 · 71 posts · 30 votes2mo
Nicholas is right that there "isn't any on LTRs right now" at the level most people screen at, and in Texas that's not a coincidence: the state carries some of the steepest property-tax-plus-insurance loads in the country, so a model tuned to real net cash flow should kill the typical listing. I don't think your criteria are broken. I think the unit you're screening is. You're running listings and rejecting whole metros, but the number that actually decides this lives one level down, at the census tract.
I work with housing-market data rather than owning in Texas, so weigh that accordingly — but I pulled the 2024 census-tract numbers for the four core counties you named before writing this. On gross rent-to-price (annual median rent divided by median home value, tract by tract), three of your four look almost identical at the median: Harris (Houston) ~7.0%, Bexar (San Antonio) ~7.5%, Dallas County ~6.6% — all within about a point of each other. Austin (Travis) is the real outlier at ~4.2%. But the median is the trap. Inside Houston the tract band runs about 3.4% to 10.9% from the 10th to the 90th percentile; San Antonio 4.1% to 11.1%; Dallas 3.2% to 10.1%. That's a ~7-point spread inside each city, several times wider than the gap between the cities themselves. Which tract you buy moves your yield far more than which of those three you pick.
So "killed Houston and San Antonio" really means "killed the median Houston/San Antonio tract" — a fair verdict on the middle of the county and the wrong one on the roughly 40% of tracts that still clear 8% gross. That top slice is about the only zone where a Texas LTR keeps enough gross yield to survive the tax-and-insurance load with anything left over, and it's where I'd point your model instead of at the metro name. San Antonio actually screens best of the four on this — highest median yield and the fattest high-yield tail — which is convenient given it's one of your two primaries.
Austin is the one where the write-off mostly holds, but even that's a distribution call, not the city being disqualified: only about 15% of Travis County tracts clear 6% gross, and the best-decile Austin tract (~6.4%) still lands below San Antonio's median (~7.5%). Keep it as an appreciation play if you want one, but don't expect a cash-flow model to find much there — the tail just isn't tall enough.
All of it is free and replicable: B25064 (gross rent) and B25077 (home value) on data.census.gov, pulled at the tract level and filtered to each county (Harris 48201, Bexar 48029, Dallas 48113, Travis 48453). Two honest caveats so you don't over-trust it. This is gross rent-to-price, not net — a screen for where to point the underwriting, not the underwriting itself, and in Texas the gross-to-net gap is bigger than usual because of taxes and insurance. And tract ACS medians are small-sample 5-year estimates that skew single-family, so treat them as a relative compare between tracts, never as a pro forma for a specific door. But as a first filter to stop throwing away whole cities, it's brutal and it costs nothing.
- Banker · MA · Member since 2026 · 120 posts · 33 votes2mo
Welcome to actually doing the work running numbers and killing deals is not a sign you're doing it wrong, it's a sign you're doing it right. Most people who 'find cash flow' in today's market are either underestimating expenses or not stress-testing vacancy, capex, and management fees honestly.
That said, Travis's point is worth sitting with, but it's not the whole picture. A few things worth pressure-testing in your model:
**1. How are you financing it?**
Conventional 20-25% down at today's rates is a tough road to cash flow on a turnkey asset in Houston or San Antonio. DSCR loans (debt-service coverage ratio) are worth understanding they qualify based on the property's rent income vs. the mortgage payment, not your W-2. Rates are a bit higher than conventional, but the structure can sometimes open up deals that otherwise look marginal, especially if you're buying under your own name and preserving personal DTI for future deals.
**2. Your expense assumptions may be conservative or not conservative enough.**
In Texas specifically, property taxes are the variable that kills a lot of models people built using out-of-state assumptions. Some Houston and San Antonio submarkets run 2.2-2.6% effective tax rates. If your model isn't using actual county tax data at the purchase price (not the current assessed value), you may be underestimating by hundreds per month.
**3. Value-add is real, but it has a learning curve.**
Travis is right that forced equity through light rehab or a mismanaged property is one of the cleaner paths to year-one cash flow. The risk is execution especially remotely. If you don't have a reliable GC and PM in market, that margin disappears fast.
With 31 years in the mortgage business, the investors I've seen succeed early tend to over-model rather than over-optimize they know exactly what rate, down payment, and rent level makes a deal pencil *before* they make an offer, not after. Get that financing structure nailed down first, then let it guide which deals you're even looking at.
Happy to talk through the DSCR vs. conventional math if it would help you sharpen your model.
---
Jim Driscoll
- 1moAlyssa MarquezBusiness MemberReal Estate Agent · San Antonio TX / Fort Lauderdale, FL · Member since 2023 · 120 posts · 29 votes
We agree, the easy cash flow deals are harder to come by these days. Higher finance, insurance, taxes, maintenance make properties that look solid on paper no longer pencil out when you factor in everything. The owner-occupied value-add is giving investors a better option as the equity you are able to create doesn’t totally depend on market appreciation – you just have to be patient to say NO when the margin is too thin.
- OH · Member since 2026 · 60 posts · 17 votes1mo
Your screening discipline is a good sign. For Houston and San Antonio, I’d keep the cash-flow hurdle explicit and separate the variables: taxes, insurance, maintenance, vacancy, management, and realistic rent—not just the purchase price. It may also help to track why each deal fails in a simple log so you can see whether the issue is market, property type, or financing assumptions.
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes1mo
I've looked into some of these markets personally and I could not make it cash flow. The reason being is because Texas has done a great job of building and has more inventory than there is demand. At one point we were going to submit an offer on a fourplex outside of Austin and before we signed the offer to submit we took one last look. We realized that there were new construction apartments everywhere. That means the only way we can compete is on rental price, in which case the numbers wouldn't work.
You are going to have to be extremely aggressive on the acquisition price in order to make it work. But that's easier said than done if a Seller isn't willing to budge.
Picking a market with less building but still demand is probably a better fit.
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