All Forum Posts by: Anderson Schulle

The big companies are moving to the metro areas. So DFW, Houston, Austin. The growth we've seen here in DFW over the past years has been beyond anything I've seen before (population, housing, infrastructure...).

Speaking specifically about Dallas-Fort Worth...
Home builders are typically only building above the 300k price point, that's when their profit margins increase, so that's where you will find most homes priced at. This also means that homes under 300k (especially under 200k) are the most sought after. The other day we sold a rental property for a client, and had 21 offers in 2 days. More than half above asking price. In the end it sold for 176k. Our client bought it for 90k just 3 years before.

So home prices are going up. Rental prices started to stagnate. There are only so many 100-150 dollar yearly rent increases you can push onto tenants before they move out.

Historically, homes in Tarrant County have had better returns than in Dallas County. So ideally a home in a good school district, but in the 150-250k price range. Anything under 100k will be in a C- neighborhood, which comes with its own challenges.

There are lots of wholesalers here that we can connect you with. Those properties come with the challenge of you needing boots on the ground to get the rehab done. But it might get you 10% equity in the end. Unfortunately the 25% equity days are over here. Wholesalers are selling at 85% ARV, and often their numbers are not accurate.

Anything truly turnkey will most likely be either overpriced or in a lower income neighborhood. There is just no way of making good money with a turnkey business here in DFW. More than 2 years ago, yes. Now, you are essentially buying at or above market price with a turnkey provider. That's why there aren't many here.

Hope this helps. This is a great and booming area, very landlord friendly, very stable (even during the last crisis). And there is still some room for appreciation.

Hi @Alain Haug. My suggestion is to familiarize yourself with the different types of markets we have in the US and pick the one you like the best. Some are very expensive but might provide superior appreciation (timing is key). Others provide higher immediate returns, but very slow appreciation. And then you have some markets that are in-between. There is no market better than another. It's just different strategies, different risk levels, and of course, finding people you can work with and trust.

I'm from Germany myself, and lived and invest in Indianapolis, but have mostly focused in Dallas-Fort Worth over the past 6 years. Both of these markets are in their own right very attractive.

As to financing, this one will be tough. It's theoretically possible to finance a rental, even if your main income is not from the US. But from my experience of trying to help very wealthy Brazilian investors leverage their rental portfolios in the US, in the end the underwriters just can't make a square fit into a circle. So we've actually never been successful in accomplishing this, even when it was an attempt to do a cashout refi. Doesn't mean it's impossible.

I'm currently looking into a local lender who seems to offer a niche program for foreigners, but they only do less than 50%. I can share the info once I find out more.

Originally posted by @Ram V.:

@Rahul Bhatt @Anderson Schulle @Mitch Messer @Amber Chen

Do you guys have any information on EB5 Direct investment (Not EB5 Regional Centers) in real estate? How to structure real estate investing as a business and create 10 full time American jobs over 2 years to satisfy the EB5 visa rules?

thnx

 Unfortunately I've never done this, so I don't have much to add. I would think there is no way around of structuring this with an experienced lawyer. This is not something you can do on your owner (without previous experience). So most likely an attorney would know the rules and requirements, and would be able to help you setup the legal aspect of the entity and project, while you have to come up with the actual project and cash for it.

If I were you, I would start there...interviewing a few attorneys that have experience doing this, and then pick the most suitable one to get it done.

Welcome to BP @Atta Bari!

Going by zip codes can be tricky. Sometimes it works, sometimes you are within the same zip code in a different school district, or one street is great and one block over things are not that great.

Then there is your personal preference. Some people want newer homes and dislike older ones, other people have a tight budget and are willing to take a little more risk with a property that might need more maintenance upkeep or might attract less financially stable tenants.

Having said that, in my opinion, the best cost/benefit you will get in DFW is the 120-150k range properties that will rent anywhere from 1100-1400 depending on location, size and finishout. They are getting harder and harder to find. And are slowly becoming 140-180k price range due to appreciation and lack of inventory (not much being built under 200k in DFW).

I'm still a big proponent of Mid-Cities, Watauga, North Fort Worth (FW address, Keller ISD), Haltom City, Saginaw and even Blue Mound. Irving and Arlington, depending on the pocket, rent really really fast, due to their strategic location.

Finding a good rental through the MLS will be difficult and probably a little more expensive, but it will give a beginner investor the opportunity to do it at a slower pace (i.e. opportunity to do full inspection and have option to cancel the contract), whereas buying it from a wholesaler (pre-rehab) will provide you an opportunity to get some equity with the property, although you will have to make a quick decision to buy without an opportunity to do a traditional inspection and option period.

We do the latter all the time. After buying lots of houses you get more comfortable with making a quick decision after a visual inspection. There is a little risk there, but you have usually also a good cushion (equity) to make up for it in case there are surprises (usually plumbing).

Hope this helps.

Great initiative!

Originally posted by @Kayla Oliver-Pratt:

@Anderson Schulle I'm interested in TK in your area...could you please send me more into on your company, etc.

Thanks. 

 Sure. I'll reach out to you via PM.

Welcome to BP Lance Wisdom ! Having moved from Germany to the US myself I understand the challenges and benefits of investing in US real estate. I think you already took a great step by being here. As others have said, the next step is zeroing into a market that you like or that fit your goals. Then connecting with people from that market and buy your first property. The first is always the toughest. Let me know if you want to chat sometime.

Originally posted by @Jackie T.:

Cathy - I am actually in a very similar situation to you. My Husband and I are Americans but living overseas in Asia. We have been looking at Texas (both Houston metro and Dallas/Ft Worth metro) the past 3-4 months.

My focus has been SFH, 3bd/2ba in B/B- neighborhoods.

I have been connected to 3 different turnkey Operators in Texas but have not have been able to find any properties that even break even, let alone cash flow. The current rental rates have not kept up with purchase price (which have appreciated quite a bit the past 5 years).

When the turnkey Operators provide pro formas with 1-2% for vacancy and 1-2% for maintenance...it will show positive cash flow. But I’m much more conservative and just don’t find those numbers reasonable at all.

I even started working with a Real Estate agent in hopes she might be able to find me something that at least broke even and she hasn’t been able to yet.

If you or anyone reading this has had luck and can share how they have been able to purchase in these two markets, I’d love some insights.

Hey @Jackie Tran, you are right, our DFW market has appreciated so much, that most neighborhoods you just can't get a positive cashflow from rentals. If you are looking traditional turnkey or MLS, it will be very very difficult for you to buy a property.

Ideally, you will find an off-market property. Since you are overseas, it would have to be either through a wholesaler, or a service provider that act as your boots on the ground and would also be managing these properties. There is a huge benefit in having a trustworthy local partner, especially because many of the bigger wholesalers in DFW are also feeling the squeeze, and so their numbers are just inflated. Any experienced investor will see when their "deal" is not right. Some people get upset about these. I have learned to just move on to the next deal and not get hung up on them having misleading numbers.

Anyway, most likely, and still, with a lot of patience, you will only find a cashflowing property in DFW by buying an off-market deal with some equity.

Originally posted by @Amanda Whiteley:

I currently have two properties through Morris Invest and without going into detail I’m looking for recommendations for an alternative Turn Key provider. Do you have any recommendations?

 What areas are you looking to invest? We might be able to help.

Originally posted by @Christina Kim:

HI Andreson. Can you send me property addresses and pictures to [email protected].

Thank you!

 Hi Chrstina. Sending it to you now. Thanks!