All Forum Posts by: Andrew Herrig

As a new investor in Dallas, I'll offer a little different perspective. While I am also interested in SFH below market value that generate good cash flow as rentals, my first purchase was a duplex. I would be extremely interested if you found a way to market to tired landlords with underperforming 2-4 unit properties and get these properties at a discount. I think the key is to market in good areas, as I seem to have trouble finding any decent multifamily deals in areas I would feel comfortable investing in.

Also your property taxes seem a little high. Back of the envelope calculations based on your assumed monthly property taxes give me a tax appraised value of $111k (in Dallas county). If you do end up purchasing the property for $95k, I would definitely protest the taxes based on your purchase price being the "market value". I have not done this yet on my property, but am considering it as my tax value is slightly higher than what I paid.

Welcome to Bigger Pockets! I'm a new investor myself from Dallas. I closed on a duplex in the North Dallas area in February and am in the middle of renovations.

When was the house built? I ask because older houses tend to have more maintenance and upkeep. And in Dallas especially, almost all houses >30 years old have some kind of foundation problems.

Like Simon said, I think you have the potential for a good deal here, but I would look very closely at your repair costs. How did you estimate this? Do you have a contractor or do you plan to do the work yourself? I would also bump up your vacancy. I use 8% - the rental market is strong in the DFW area, but I wouldn't feel comfortable estimating less than 1 month per year of vacancy. With 8% vacancy, that gets you to the 50% rule (estimate 50% of gross rents for expenses + vacancy) so your other expenses seem reasonable.

I assume this is a foreclosure? If so, are you sure you meet the requirements to get a renovation loan? I remember from when I was looking at properties that the requirements can get kind of tricky.

Bryce Y. Andrew Ramler Just ran across this thread because I have "dallas" tagged as an alert. Would love to hear about both of your experiences thus far. I bought my first property in Dallas, a duplex, in February. One side is rented out and I am renovating the other. Learning a lot of valuable lessons so far, especially regarding contractor management!

Tim Norris I got a quote for a "renovation" policy like you described, but it was very barebones (very few covered perils, no liability). I also had to pay for a full year of coverage, even though renovations should only last a couple months. Is there better renovation coverage out there than what I've found so far?

Brandon Turner Thanks for the reply, sometimes it's just good to know you're not only one with a problem!

I called Foremost, and they were willing to issue a policy assuming I got several of the issues taken care of beforehand, which wasn't super helpful. After calling around some more, I finally found a "normal" insurance policy that will cover my situation, albeit with lower coverage amounts.

For reference, my original policy was with USAA who has great rates for the coverage they provide, but pretty tough underwriting standards - they don't like to take a lot of risk.

I recently bought a duplex that is occupied on one side and needs fairly extensive renovations on the other. Due to my contractor's schedule slipping (surprise surprise) I am at risk of losing my insurance coverage. My insurance company is cancelling the policy on May 10th unless the exterior issues have been repaired (dry rot in a storage shed, peeling paint, broken window, etc).

I am hoping the repair work will be done by then, but I want to have a backup plan. I have called around a bit and can't find anyone willing to insure the property. I have heard of vacant house insurance, but it's not really vacant so I was assuming I could get a normal policy albeit at a slightly higher rate.

Any suggestions?

Very interesting article. I really like the case study you put together. Makes me want to learn more!

This is a great thread. I love seeing people's assumptions on the math (response rate, conversion rate, etc.) I am keeping this info tucked away for when I start my own campaign, hopefully this summer.

Question for the DFW folks in the thread, Jon Klaus and Jerry Puckett - would you consider the DFW market "saturated"? I have a few zip codes that I like and am familiar with and was thinking of starting with direct mail to absentee owners (perhaps the 300 per week suggested here). Do you think I would see any return from that, or is Dallas saturated enough that I need to get more creative?

Thanks for the welcome so far!

Jon Klaus - The duplex is in North Dallas, near 635 and 75. I am hoping to have the second unit ready to rent by April. I really like Bishop Arts as well, along with Old East Dallas. Have you ever attempted a rehab on one of these historic homes? I feel like you would have to have a pretty big buffer in the rehab budget to account for the unexpected things that can come up with these homes.