I’m not doing deep comps yet, just making sure I’m not about to “model my way into” a thin deal.Then I look for any loud deal-killers that a spreadsheet won’t fix (bad pocket, major deferred-maintenance signals, insurance/tax landmines, chronic occupancy/collection issues).

As some have noted, taxes and insurance play a much bigger role in Texas than in Ohio, Indiana or Arizona.

The property tax rate for the resales we target is 0.55%.Comparative Vacancy CostBelow is the comparison data for a minimum-priced new home and the typical-priced existing home our clients buy.New HomeResalePrice$550,000$400,000Interest rate3.99% (the rate you stated)6%Average stay1 Yr5 YrTime to re-rent3 Mo1.5 MoProperty tax rate1%0.55%Down payment25%25%Loan term30 Yrs30 YrsNew Home Ten-Year CostTo keep the example simple I did not include insurance or maintenance.Debt service (P&I): $1,967/MoProperty Tax: $5,500/Yr (1% x $550,000) or about $458/MoTotal monthly cost: $2,425/MoVacancy cost:Turns/Ten Years: 10Months vacant: 3 Mo x 10 turns = 30 monthsVacancy cost: 30 x $2,425/Mo = $72,750Resale Ten-Year CostTo keep the example simple I did not include insurance or maintenance.Debt service (P&I): $1,799/MoProperty Tax: $2,200/Yr (0.55% x $400,000) or about $183/MoTotal monthly cost: $1,982/MoVacancy cost:Turns/Ten Years: 2Months vacant: 1.5 Mo x 2 turns = 3 MoTen year vacancy cost: 3 x $1982/Mo = $5,946(The vacancy cost comparison is $72,750 for the new home versus $5,946 for the resale.

It's not a matter of if, it's when.VENDOR INSURANCE TRACKING WILL EVENTUALLY BURN YOUThis one scared me more than anything.

I knew what I was getting into with this market, and it has an extremely high insurance rate compared to other areas in the country.

Most good GC's will be able to get Subs and Materials at a discounted rate that you will never get....so the actual cost to you may be close to the same.That way, you don't have to: 1) deal with the Sub's crews (you don't know anything about the trades and can be taken advantage of easily), 2) Deal with City Inspectors - they hate dealing with homeowners/Investors, 3) assume any liability for faulty work , 4) worry about Lien Releases and stuff like that, 5) Verify that all subs have Liability Insurance/Bonds/Workers Comp, 6) be involved with materials...picking up, storage, warranties, liabilities, etc....Your time is better spent running your investment business - find a new property to flip, keep your books in order, etc.

And in today’s environment, most C-class properties aren’t cash flowing the way they used to — debt costs, insurance, and operating expenses have compressed margins significantly.

I know TX has high property taxes and from what I heard, higher insurance costs but I believe OK is the same way.

Are they duly licensed and properly insured and Bonded in the State of the property?

After debt service, taxes, insurance, maintenance, capex, vacancies, legal, etc.