All Forum Posts by: Bart H.

Originally posted by @Liwen Gu:

Somehow I just can't see Amazon choosing Dallas as it's 2nd HQ...Dallas has really awful weather, I imagine Amazon would want a more desirable place for its employees.

 Have you even been to Dallas?  Why do you think the weather is awful?  Its got a couple of months that are hot, its got a ton of sunny days, the winters are very mild.

Originally posted by @Thomas Weidner:

What are some good real estate programs where you can get your agent license in the state of Texas. What are the cost of these programs as well. 

 I was looking into possibly getting my license and I have heard Champions is a good program.

Havent done it myself, and I have no affiliation with them, but its where I was thinking about going.

https://www.championsschool.com/

D- Magazine with an article suggesting that the top end of the MF high end apartment market is in really bad shape from a pricing perspective.

I think this is an early sign that we are seeing the end of the boom in Dallas.  Especially in MF's

Originally posted by @Bruce Lynn:

@Bart H.  Where do you see this or find this info?

 There isn't any scientific study or stats that I know of.

Merely pointing out the observation of my wife and I as we have been looking at properties over the last 4-5 years.  Until the last 12 months or so (basically when we got the new city manager), I don't ever remember seeing any construction jobsites that had been shut down (talking residential & small MF).

In the last 6-12 months we have seen a dozen or so stop work order signs on various houses. And this is across at least 3 or 4 different council districts, so I don't think its a single council person or neighborhood getting serious about construction jobs.

I could be wrong, but my sense is code enforcement is viewing things differently than they have in the past.

Originally posted by @Mike H.:

The cash out refi seems like the way to go there.

But that does surprise me that texas would have written a law forbidding a heloc on an investment property. For what purpose? They always seem to tell everyone how proud they are that they have such little business regulation. Yet they seem to have some of the oddest laws governing financing and investment properties I've heard.

i.e. No heloc's on investment properties. No seller financing. etc.

 Remember Texas had a huge issue with the S&L crisis /oil shock in the 80's.  They have very strict homestead, and real estate loan requirements because of it. 

And yes it did keep us from having a huge run up and huge drop in 07.

Originally posted by @Bryant Patterson:

@Anthony Madia if you're living in the house for at least a year, you can qualify for a 3.5% downpayment loan. That's one of the biggest benefits of house hacking. 

Austin will be tricky, especially if you're coming from out-of-state. The areas where students live have been picked thin by investors for years. Finding a duplex or quad that hasn't already been flipped is going to be hard in one of those areas near campus. Now, if you aren't looking for a great deal and just want a place to live, that's different. It will be pricey though.

If you venture further south of campus (and south of 290), you can find deals, but then you'll be a 30-minute drive to campus. Austin has a terrible public transportation system compared to what you're used to, so be careful not to underestimate the time it takes to navigate this city. Traffic is the worst thing about Austin. 

 This, Bryant is spot on with the lower down payment, you also get lower interest rates, and with roommates you can significantly lower what you owe.

Plus if you are a student, you have cost avoidance.  I mean you have to live someplace.  so ANYTHING you get from other renters will lower your costs.  Even if the numbers aren't stellar by Bigger Pockets numbers in terms of absolute returns.

Originally posted by @Bo A Vanecko:

I have mentioned in a previous post that i have an investor (current consultant at company i work for in CO) in Texas interested in helping me secure my first purchase(s) in the Fort Worth are (C class homes in areas that likely have gentrification happening).  He has a company set up and his wife is a real estate professional and they are basically doing much of the leg work to pick a good deal for me and in return have offered up a 6% management fee to manage these OOS properties. 

As i have narrowed in on a few homes, another item has come to the table that is definitely interesting.  Here are the two options i am currently presented with:

1) buy one or two SFH's with the capital i currently have and get around 15-20% (or better) CoC returns on these and around 300-500 cash flow monthly

2)  Go in on partnering with this colleague / investor on some new builds:  

--> background is he purchase 10 lots of land in various areas of FW at substantial discounts to their current value. he can now build on these and a finished product could easily see 400-600 cash flow and 25-35% CoC

-->  he has his eyes on about 5-10 other lands and wants to free up his capital on these lots and also has lined up new construction loans as well

So the question is, would it be better in the beginning to utilize my capital in one or two SFH's now or potentially go in on three new builds where the risks are obviously on the length to build etc and no cash flow until rented out etc?

the other question is are there any recommendations on lawyer to help me set up a contract for these partnerships (i am assuming some type of LLC or LP type arrangement)?

would love to hear peoples thoughts on either option :)  

as a long term goal, we are looking to get these homes going and either keeping or selling interest in them down the line as we want to begin buying larger multi-plex units (nearly scored a 20 unit recently but the owner would not budge on price and the price did not quite make sense).

 Are you comfortable with this partner?  Ie do you know them well?

I think I would have some difficulty working with someone I barely knew, on buying multiple properties a thousand miles from where I live.

I think each one of those steps could be risky, ie 1) buying your first rental....let alone two or more 2) buying out of state 3) working with a new partner.  4) working with a partner who you didn't have a prior relationship with. 5) buying multiple rentals at the same time.

Look, there are a million ways to do real estate, and everyone has their own risk tolerances, niche, investment goals and capital to invest.  We personally have found that buying one property at a time is about what we can safely digest.  It takes a few months to catch up on  deferred maintenance, paint, find tenants etc.

Assume everything you do will cost you a lot more than you expect, and have reserves.  It seems like every time we have a tenant change we end up buying a new appliance or AC unit.

My suggestion,  if you are looking out of state would be to find a good group that is putting together a deal on a multi family property. Or better yet find someone who is local who can show you the ropes.

Originally posted by @Eric Du:

Hi all,

I've been analyzing small multifamily properties in Dallas / Fort Worth, Texas area, and I have been wondering what kind of returns other investors are getting in the area? Seems to me that many of the listings that hit the MLS don't make too much sense from a cash-on-cash ROI point of view when using traditional financing. Are most of the deals you find off-market deals? If so, how do those compare to what you can find on the MLS nowadays?

Best regards,

Eric

 I think you will have problems finding anything in the 2-4 unit category much above a war zone in Dallas that shows a return.  And if/when they do come on the market, there are multiple offers in cash within the first 24-48 hours.

I think house hacking absolutely is the way to get started in the investment game, I don’t know that you will be able to live rent free, but you should be able to live much cheaper that you otherwise could. As far as in State tuition, I believe, you will need to own a home for a year before you can qualify.

Originally posted by @Scott Trench:

Oh, and based on this discussion, and corroborated by a recent podcast with @Todd Dexheimer , Cincinnati is my frontrunner for now. I will definitely still be looking at other markets for consideration in this investment, or a future investment.

Thanks!

Scott

 Just out of curiosity, wouldnt Cincinnati have the risk of being dominated by P&G?  P&G just came out of a pretty nasty proxy fight, and I think there are concerns that they may still need to lower the corporate overhead.

If that happens, doesnt Cincy become a risk for real estate investors?

I agree that DFW has made a huge run, and we wont see that kind of a run in the next 5 years, but the long term fundamentals are pretty strong.  Large diverse industrial and technology base, top level airport access, business friendly environment etc.  Just over the last few years you have had major parts of State Farm, Toyota, Capital one and others move substantial portions of their business to Dallas.  I would think it would continue.

I really wonder if there is a 'perfect' area to invest, I am kinda coming around to the idea that investing in what you know trumps going far afield to buy real estate.

If you do end up taking a tour of Dallas, send me a shout and I would be more than willing to give you a tour of the areas I think are most promising in Dallas.