All Forum Posts by: Andrew Herrig

@Rachel Deering If you want to buy a primary residence you can eventually turn into a rental, I'd look for something in the $125-200k range where the monthly rent is close to 1% of the purchase price or better (for example a $150k house that rents for $1500 per month).

Not sure what part of Dallas you are in, but you can find this in parts of East Dallas, Garland, Richardson, Rowlett, Allen, Farmers Branch, Carrollton, etc.

If you need a good realtor for when you re-list in the spring, send me a PM. My wife is a realtor and lists our flips as well as helps regular clients buy and sell. We are in East Dallas, but know the greater Dallas area pretty well since we have done rentals/flips pretty much everywhere. Since it's a $400k listing, she could probably discount it down from the normal 3%. 

Even if you aren't looking for a realtor, feel free to reach out for an opinion on what to list for. I have an addiction to evaluating real estate...

@Rachel Deering I would agree with @Greg Scott that you are better off selling the house and buying a cheaper rental. You can do much better than a 0.7% rent/price ratio ($2,700/$400,000) in a lower priced property. Plus selling your primary residence is a nice tax free gain.

But it depends what you want. If you like living in your current house and are only moving to make some money to pay down debt, refinancing your current mortgage is a good way to go as well.

As far as the student loan debt, I would consider keeping some of the lower interest debt if you are interested in getting into rentals. Consider it loaning yourself money at 4% - assuming you can get 10-15% return on that money from a rental property, it is a good investment.

@Matthew Hite From an appraisal perspective, replacing the HVAC won't help you. But as mentioned above, make sure you have a plan in place and money saved up to replace it. All mine seem to go out at the most inopportune time, and in many cases it is so hot here in Texas it really is an emergency to get it working again.

I would lean toward replacing the windows over the fence, but honestly I'd probably try to find the money to do both. Much easier to do work before you move a tenant in, and high quality properties attract high quality tenants.

@Anna Khan I would not buy a condo in Garland at that price point. Pretty low end, and you will see little if any appreciation while the HOA dues eat your cash flow.

Showing scheduled for Wednesday, 9/27. If you're interested, let me know and I'll give you the time.

Estimated ARV: $790,000

Repairs: TBD by buyer (see pictures in link)

Purchase Price: $590,000

-> Link to property flyer <-

3611 sf / 4 bed / 3 bath / 2 car garage
19,300 sf lot / stucco / pier and beam / built in 1955

This is a great flip in a coveted North Dallas location (Northaven Hills Subdivision). It was completely rehabbed (down to the studs) in 2007 and is in pretty good shape as-is, but will probably need some cosmetic updates to get full market value. See pictures for more detail.

Roof: Appears to be in good shape, but do your own due diligence
Foundation: Have a bid from Align Foundation for $5k to add a few steel beams to help support 2nd story addition
HVAC: 2 units - older but working fine
Electric: no known issues
Plumbing: no known issues
Other: Fronts to residential street, but borders main road, and ARV has been adjusted accordingly

Seller has 15 day leaseback with $5000 holdback until vacant.

This is an assignment of contract. We have an equitable interest in the property and will assign the contract to a 3rd party.

-> Link to property flyer <-

If you want to join my buyers list for future deals, you can do so here:

http://www.andrewbuyshousesdfw.com/investors

@James Perez You can post on myhousedeals.com. I have gotten some traction there before. Also, DFW Investor groups on Facebook @Erik Drentlaw mentioned. There are several meetup groups in DFW, if you attend one you can share the deal to them. If it's a deal I need to move quickly and/or have limited opportunity to show, I usually partner with one of the big wholesalers who have 50,000+ investors on their mailing list.

One thing I have not tried yet (but plan to) is Facebook ads targeted to investors. Not sure how well it would work to sell an individual property, but should be a good, cheap way to build your buyers list.

@Richard Hodges I wouldn't move to Dallas just for the real estate market. If your goal is buy and hold, you are already in arguably the best area of the country (Midwest). Dallas has had some good appreciation, but cash flow is getting harder to come by. 

@Account Closed Depends on your assumptions, but not in my opinion over the long term if you use property management. PM and the ridiculous property taxes in Dallas / Fort Worth take a big chunk of your cash flow.

Gross rent = $1200

Taxes = $120k * 2.7% / 12 = $270

Insurance = $75

Maintenance/Capex = $200 (I would probably use a higher number, but this is debatable)

Property Management = $1200 * 10% = $120

Vacancy = $1200 * 8% = $96 (also debatable, but in this number would also be whatever the PM charges to lease up - usually 1 months rent)

P&I with 20% down at 4.5% = $486

Total expenses = $1247

Hardest part for me has been juggling rental houses with a full time job. When multiple vacancies come up in the same month, it takes a lot of time to coordinate move-out, turnover repairs, showings, and move-in of new tenants. I guess the broader issue is communication and finding contractors (and tenants) I can trust to do what they say when they say they'll do it.