locations for new construction buy and hold

[Vijay Nidumolu]

Dear all,

Its been a humbling experience, reading all posts on biggerpockets. 

I am trying to buy a property (either SFR or TownHome) and hold it. I plan to buy and rent it , and let the rental pay for equity. I prefer low maintenance to positive cashflow, and I plan to buy a reasonably new construction area. I have a rental in holly springs NC and we live in Dallas suburbs.

I searched following areas so far.

a) I am tired of almost all national builders saying no, to investors in Dallas, Austin and Raleigh metroplex areas.  

Also, I was beaten by cash offers on 3 homes in dallas so far.

b) I found new construction to be far away from city center in little Rock , AR and so not sure if rental demand. 

c) I think oklahoma city is georgraphically risky for me. No offense , OKC is a great city. But, I might end up with sleep less nights during summer if there are tornadoes in OKC.

d) Any suggestions on locations in USA, as to where can we buy a new construction or reasonably new homes ~300k and rent for ~1600(if tax is ~1%). I gave up on 1% or 0.8% rule in 2020.

regards

vijay 

thanks and regards

vijay 

[Will Fraser]

Don't be too down on the prospects of higher rent to value ratios, @Vijay Nidumolu!  If you're looking to exclusively invest in Collins County or similar areas then you can kiss those numbers goodbye, but many other places (including Little Rock, a perennial city with strong rent demand) have a R/V ratio that will serve you well.

What is the big picture thing that you want to get out of investing?  That will be an instrumental thing to hold in mind while trying ot determine the best next plays.

[Alex Grosvenor]

Hey Vijay! 

Getting beaten out by 3 offers is NOTHING. Most investors I talk to get 1 in 30 to 1 in 40. Meaning 1 offer accepted for every 30 offers made. Especially here in Dallas where everything is flying off the shelves. 

Don’t get so down. Keep your head up. Keep making things.happen everyday. 

I was looking at a New build yesterday going for 200k that rents for around $1600. That’s a .8% rule right there. Those are easy to find. Now 200k with a $2,000 rent is nearly impossible here in DFW.

[Cassi Justiz]

Hey @Vijay Nidumolu, 

Lubbock, TX is a strong market with decent new construction prospects. I've looked at the numbers and even new construction stuff is pretty strong. It's still a competitive market, but it's a smaller town so you won't get the Dallas or Austin level bidding wars. The taxes are a bit higher than you'll see in OK or AR, but lower than most parts of Texas.

Reach out to @Jordan Sutherland and he can point you in the right direction with investor friendly builders. 

[Vijay Nidumolu]

thanks a  lot @Cassi Justiz

@Cassi Justiz

@Cassi Justiz : I am trying to use rental to build wealth, (accumulate equity, as it gets old) . I will check little Rock area once again. Also, I was thinking about tornadoes risk in little rock area .

Alex Grosvenor : wow 1/30 . thats insane Alex :)

[Mason Moreland]

Originally posted by @Vijay Nidumolu:

thanks a  lot @Cassi Justiz

@Cassi Justiz

@Cassi Justiz

Don't let the crime stats freak you out with Lubbock. It is highly concentrated to certain parts of the city. East of Avenue Q is almost all C & D class properties and crime is high. Bleeds over some into petty crime (theft) around neighborhoods closer to campus. City is growing fast south and southwest towards Wolfforth (they have basically started to merge). Good neighborhoods all over the place though. We like to focus on properties that appeal to families, but do pick up some student renters as well. Check into @Matt Moreland and his KW team there, they are all investor focused realtors.

[Matt Moreland]

@Mason Moreland

Thanks, Mason!

I would be more than happy to help anyone looking into investing in buy and holds here in Lubbock. We've had great personal success with some of the new developments here in town with significantly lower maintenance/repair costs and still throwing off cash flow similar to the old student properties many are focusing on nearby campus (nothing wrong with those, just a different strategy).

Would absolutely add Lubbock to your list of cities to drill into deeper as the potential here is high. Whereas all the primary and secondary markets are highly saturated with investors at this time, Lubbock is still like the secret that people are just now hearing about.

We have already seen property values here shoot up just in the last 3-4 years with tens of millions in outside capital coming in, and with more development coming to the High Plains of Texas it is a prime time to buy into the path of growth while there is still tons of upside to be enjoyed.

[Cassi Justiz]

@Vijay Nidumolu, 

There are some areas of Lubbock with higher crime, but no worse than any of the other cities you are looking in. As mentioned above, the types of homes that you are focusing on are typically in areas that are not known for crime. I am from Lubbock and still own property there. I really like South/SW Lubbock and the Wolfforth area but there are lots of nice pockets. My former primary residence in Lubbock is my best cash-flowing and lowest maintenance rental to this day. I wish I would've known (and had the means) to buy about 10 houses like that one back in 2012. :) 

I am pretty much only buying in the OKC area now because I live here and am licensed here, but I definitely keep Lubbock on the radar. 

[Vijay Nidumolu]

thanks a lot Cassie , Matt and Mason

Really appreciate insights related to Lubbock Tx.

regards

vijay

[John Thedford]

I suggest SW Florida. My friend is starting some builds that are quality builds with nice features in the 240K range. 

[Joseph Schweizer]

Hi @Vijay Nidumolu!

I heard about some New Builds in Florida from @Zach Lemaster. Upon a quick look on the website, it looks like they might fit the criteria you mentioned in bullet "d".

Best Wishes!

[Griffin Schermer]

@Vijay Nidumolu

Indiana is a great market in terms of affordability. There are lots of solid areas to invest without breaking the bank. We are seeing demand all over the state, not just Indianapolis. Even in the less populated areas we are seeing growth. As a builder I can tell you we are seeing demand in Southern Indiana cities between Indianapolis and Evansville (Martinsville, Bloomington, Spencer, Columbus, French Lick, Bedford). I'm sure up north you can find similar demand. You can build below 300k for sure, you could build a duplex for less than that in this market with land and home. 

[Zach Lemaster]

@Joseph Schweizer Thank you for the mention, and I completely agree with you!

@Vijay Nidumolu

I'm happy to answer any questions you have on anything.

We have some excellent new builds in FL & NC currently that offer very attractive returns. It's a great opportunity to get into a brand new built home in an A class area that both cash flows well, and has immediate equity? Truly the best of all worlds which is extremely rare these days.

[Will Fraser]

Originally posted by @Vijay Nidumolu:

thanks a  lot @Cassi Justiz

@Cassi Justiz

@Cassi Justiz : I am trying to use rental to build wealth, (accumulate equity, as it gets old) . I will check little Rock area once again. Also, I was thinking about tornadoes risk in little rock area .

Alex Grosvenor : wow 1/30 . thats insane Alex :)

Little Rock is not a place I would associate with tornados.  I grew up "up the road a piece" and know that LR has had some spinnys, but nothing to compare with OKC, Tulsa, Joplin, and continuing on in that band across the region.