All Forum Posts by: Andrew Herrig

@Sean Ray If you want 1% rule or a little better, I would look west toward Arlington or North Fort Worth area. A $250k house is generally not going to make a good rental. I'd go for 2 at $125k each.

@Michael Bujnovsky I don't want to discourage you from jumping in, but $1000 per month is not going to get you very far in the Dallas market. I am mailing around 4000 pieces per month and struggling to get to 1 deal per month (though I have only been consistent at that level for 3 months or so).

As @Larry Im mentioned, the low-hanging fruit (absentee owners) are getting tons of mail. I just checked, Larry isn't actually on my list, though I am mailing to someone else in Tustin, CA ;)

My best advice is to go after a hard-to-get list. Driving for dollars is a great way to find houses with a higher chance of motivation that may not be on everyone's radar. Mail them consistently for at least 6 months.

@David Smith Are you asking about showings as a rental or as a sale? If a sale, if it's priced right and in a good area, I would expect you would have it sold after one weekend given the current market conditions. But in general, you should be getting 5-10 showings per week, at least the first few weeks.

@Brian Lauchner What are the HOA dues?

SOLD! If you want to get on my buyers list for future deals, you can sign up here:

http://www.andrewbuyshousesdfw.com/investors

@Brandon Shoate Sent you a PM

@Christy Greene Yes, taxes are high here in DFW. Historically the tax appraised value lagged the market value, but it has almost caught up. Taxes on some of my rental properties have gone up 30-50% over the last 2 years. Expect to pay around 2.7% of the property value in taxes every year (so $225 per month on a $100k property). If that property meets the 1% rule and rents for $1000 per month, that means taxes are costing you over 20% of gross rents. It gets hard to meet the 50% rule when taxes eat up such a large chunk.

That said, for cash flow I would focus on first ring suburbs such as Garland and Mesquite. Arlington is good too, and generally Tarrant County will have better cash flow than Dallas County, but less chance for appreciation. Be careful of the neighborhoods you are buying in from a turnkey operator - I have seen a lot of overpriced turnkey properties in neighborhoods I wouldn't touch because out of state buyers don't know any better and they "cash flow" (at least until the first eviction).

As far as cash flowing properties near Frisco, don't waste your time looking - it's not going to happen. If you go further out toward Little Elm / The Colony you might be able to find something.

@Marcus Martinez I am a wholesaler in Dallas. Been at it a few years.

@Trevor Smith If this is your first owner finance deal or even your first deal altogether, you will probably have better luck trying to find a money partner than a low-interest private lender (I consider 8% to be pretty low considering the risk), unless you know someone who would loan you money purely based on their personal relationship with you. Nothing wrong with being a newbie, but it certainly entails more risk for a potential lender/partner. 

I know you said you didn't want to go the hard money route, but these kinds of situations are exactly why they exist. Depending on your expected profits, it could be cheaper than taking on a 50/50 partner. 

@Trevor Smith Just for your information, if you got bank financing for 75%, the bank would have a first position lien. Any other loans you took out secured by the property would be in a lower position. That means that in the event you stopped paying, the first position lien could foreclose and wipe out all lower level liens, which makes them a riskier investment.

But @Tom Cooper is right, most institutional lenders will not let you borrow the down payment even if they are in 1st position.