Buying MF in Dallas, Houston, San Antonio, or Austin, Texas?

Question

My main primary goal at this point is to purchase a buy and hold multifamily property (3-4 units). This will be my first investment. I plan on house hacking for the 1st year with the goal of cash flow of $100/door or more after i move out and to gain appreciation.

I am not really happy living in Portland. I was born and raised here, its just to wet/cold for me. i don't mind rain but every day is to much lol. Luckily I am able to relocate to where ever with my job. I have done quit a bit of research and I have narrowed down that I would like to move to the state of Texas (mostly for investment purposes). I have narrowed it down to either Houston, Dallas, San Antonio or Austin (including surrounding areas of all cities).

My question is this, if I am looking for a multifamily (3-4 units) with cash-flow and projected appreciation (I know that is a lot to ask for lol), what would be the best areas in Texas in general to start to narrow down my research locations?

David Thompson · Answer

Hi Joel,

There's been a lot written on BP recently on markets that are the best places to invest.  Some comment that Austin and many cities in Texas are getting overheated.  You seem like a person who is just starting out in real estate and hence, if you have a long term perspective, willing to relocate, I don't think you will go wrong in any of the cities you mention above.  There are cities that probably cash flow better, are a bit more affordable than another but if you look at the data, the migration of people, company and jobs to southern and warmer climates continues unabated.

Texas is pro business, pro landlord.  No income tax but prop tax is much higher as a result, but rents are higher and cover it.  I've mentioned personally I like to look where the growth is moving towards and to me, that is along the I-35 corridor including Austin surrounding towns and south to San Antonio's northeast side. You will find better value in SA for house hacking, you can get some appreciation w/it.   Take a look at some of these towns (google their growth rates) and see what I mean.  Universal city, Selma, Schertz (Amazon's new disti hub), New Braunfels (attracting medical companies) and San Marcos (TX State Univ n 35K students n growing).....all either on or fast access to I-35.  I see no reason you can't find what you r looking for in MF and house hacking.

Joel Bowen · Answer

Yes you are correct, this will be my first investment. I basically decided on Texas for most of the reasons you mentioned ie good economy, warm climate, pro business! I really appreciate the advice, I will start focusing on that area on the I-35 corridor and see if it is something that can work for me. Thanks again!

Rachel Pervis · Answer

Hi Joel I agree with @Joseph Weisenbloom that investing in Texas is not as good as everyone makes it out to be and it is in part due to out of state and newbie investors bidding up properties simply because homes are cheaper than where they reside.

I'm in Houston and there is only 3.5 months of inventory available and even though there are multifamily properties on the market in my opinion most are not good buys due to the areas and the potential to make good cash flow from them; however I do believe Texas is a wonderful place to live. I'm a native Houstonian and I don't plan on living anywhere else. Also with diligence and persistence you should be able to find a MF in Texas that will work for you, but make sure you approach the market with your eyes wide open.

Logan Allec · Answer

@Noel George, I wouldn't dissuade @Joel Bowen from looking into 3- or 4-unit house hacks.  I certainly made it work recently in an even more expensive market (Los Angeles) with the numbers penciling out.

Joel, there

Justin Kane · Answer

Build your power team as you go!

Joseph Weisenbloom · Answer

Well its definitly not Austin we have very low inventory of the type of properties you are interested in. I dont think Dallas would fit as well mostly single family there. Investing in Texas is not as good as everyone makes it out to be. There are droves of out of state and newbie investors that bid up properties. Not to mention we have some of the highest taxes and insurance in the country. If I had to pick I would check out Fort Worth or Houston.

Rick Pozos · Answer

They are all great places to invest in. Probably want to see which city you like the best to live and invest in. Once you pick the city, then you have to decide what part of town, then you have to decide duplex fourplex or bigger. It would be nice if you could just decide overnight what city, what part of town, etc. It is a very personal decision.

Noel George · Answer

Check out Stafford Texas for multifamily properties, it is located in Southwest Houston.

Noel George · Answer

Joel,

It may prove to be difficult to find a multifamily property which will provide good cashflow in my humble opinion. I would recommend looking at single family homes (possibly foreclosed) and do your due diligence to see if any of them strike your interest. Houston's population and job market are growing exponentially. Anyways, Best of luck in everything!

Buying MF in Dallas, Houston, San Antonio, or Austin, Texas?

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