Help me decide on a niche in Dallas, TX

[Ryan Moret]

Hello BP!

My name is Ryan and I am super excited to be starting on my path to real estate investment.  I have been doing my homework for the past couple of weeks / month and starting to get comfortable with all the terms and things going on.

A little about myself:

I am 29 years old and work for a commercial general contractor and love my job and am compensated very well for the work.  I don't have any intentions of leaving at this time.  My soon to be wife (3 weeks!) works at our Church and obviously doesn't get paid much, but the work is rewarding and satisfying!  Our faith is extremely important to us and we think that real estate investment will give us great opportunity with financial freedom to serve our community and help others.

A little about my plan / goals so far:

I currently own a home I bought about 2 years ago and have built up near $50k of equity.  Unfortunately, when I bought the home I didn't look at it as a cash flow property.  So it would be in my plans to offload this and put that equity to work in other investment properties.  I also have some cash savings that I have been building up over the past several months and my fiance and I have a budget in place to help us save some more.

We are considering moving to Richardson where we would be closer to both of our places of employment and be able to have a home that we could sit in for a good while longer. I am considering the idea of using that as training/hunting grounds for my first deal. Looking for finding a "deal" that could use some rehab (which I am very comfortable with from my job experience). Using some secondary financing (private or traditional loan) to acquire the property and cover the rehab, get it to market ARV and refinance and move into that home and pay down the debt. Essentially making the equity as my down payment of the home. Once we move in, sell the old condo and use that equity to start an investment empire!

My question is simple.  What works well in the Dallas area?  I am partial to the buy and hold approach, but it seems that city taxes might make this difficult.  Are there some areas of town that work better for buy and hold?  Are single family buy and hold's worth it in Dallas?  Would love to hear about what people find successful and any tips that others have for me.

Thanks!

Ryan

[Tyler Hodgson]

Hello Ryan, and welcome to BP. 

It sounds like you aren't in a good financial position and have some trade experience that will help your real estate investing career. You're on the right track. 

What works well in Dallas? Honestly there are so many different niches and strategies that work well in Dallas. I don't see our economy or real estate market slowing down soon. Your niche is going to depend on your personality. What's your risk tolerance? What is your financial situation? What is your skill set? 

Personally I am not much of a handy man, so I try to find long term rentals that don't need much work going in. It can be very difficult to find a move in ready property that still cash flows properly. Currently I have 2 rentals and my primary residence. 

Do you feel more comfortable doing flips, or buying a long term rental? 

My niche is finding tenants who want to own a home but don't qualify yet. I rent a house to them with an understanding that they can buy the house in X number of years a specific price. They take better care of the house, and typically are getting their finances in order. It's not a true rent-to-own agreement (those can be tricky). And I am okay whether they purchase or not. 

I hope this helps. Keep learning here on BP, this is the best place to be for new investors.