Is Dallas Texas a good or bad place to start investing?

Question

I’m planning on purchasing my first investment home here soon ( once this coronavirus stops and the economy starts to look brighter) and have been focused on Texas. Dallas is currently the city I’ve been looking into the most. Personally my reason for choosing Texas in general is because of the strong economy and boom in younger families. Also large corporations are starting campuses in major cities which I see as a positive.

So mainly overall I like the real estate price points and economy of Texas.

Do you think Dallas is a great spot to start? Why?

If you think Dallas isn’t a great spot, why is that? And what places do you think are superior?

Thanks!

John Chapman · Answer

I'm from Dallas, and I'm not sure I agree with @Joseph Cacciapaglia that Dallas is not that diversified or too heavily reliant on the finance industry. (We've got pretty much every type of industry.) However, I do agree with him that it is a pricier market, and it would likely make sense for you to look to San Antonio or a smaller type market first. (Not as familiar with the market, but I hear good things about it.) Prices in Dallas are way up and I don't see alot of opportunity for out-of-state investors to make good return absent boots on the ground and access to off-market (real) deals. It's very hard to make SFR rentals work right now in Dallas, at least in decent areas.

Rick Pozos · Answer

EVERY market right now is kinda pricey. Even though the median price in San Antonio is lower than San Diego, that does not mean that San Antonio is not at the highest price that it has ever been. Most markets are over priced right now. I hear people buying in Rust belt OHIO. Do you think those prices are a little over priced right now??IF and that is a big IF, you are really doing some marketing and finding deals out there you can find a bargain. I find them all the time. But if you are going to call up an agent and ask them to find you some deals, you are about to buy some expensive properties that will have little if any appreciation over the next 5 or so years. AND living out of state to your properties is so much harder than being within 30 minutes to check on them.The real estate market moves in cycles and we are at the top of this one. Wait a little.

Jerry Lundergard · Answer

@rickpozosI concur 100%. Now is definetely not the time to buy real estate at pre covid prices.

Rick Pozos · Answer

I market directly to people who MAY be motivated to sell. I also have done some driving for $$. Plus I have 3 facebook pages(1 personal, 2 business), website, produce a blog, hold a monthly meetup, and network with single family and multi family people to compare stories and deals. I also help people with their deals in exchange for part of the profits.

Jonathon Martineau · Answer

@Rick Pozos I definitely want to wait it out a little and see what impact this virus has on the economy. I would hate to rush and buy a property just to have it depreciate. I will admit though living in California makes it very hard to look at other states and see a home for $100k and not want to buy it 😂

Kenneth McKeown · Answer

@Jonathon Martineau I use to live in San Antonio and moved to Dallas. I actually prefer the DFW market much more than the SA market when I was there - but that was about 3 years ago. The entry price for DFW is going to be higher than SA that's for sure but I believe the market is stronger here and is a much larger metroplex which makes it difficult to truly compare. All of my investments (duplex, quad, single families, and my new build) are all over Dallas and FW. It's been a great market to build my portfolio.

Joseph Cacciapaglia · Answer

I didn't mean to imply that Dallas is completely reliant on finance. They certainly have a wide range of industries. However, they have tried hard to become one of the nations major financial centers over the last few decades. Last I checked, about 15% of Dallas' economy is based on the finance sector, and it has been a major contributor to the areas job growth. This has been great for them through good times, but I believe it could cause problems going forward.

Stone Saathoff · Answer

I might be biased because I work here but San Antonio is great. Low price of entry, diversified economy, investment action from flippers and rental owners.. It's just a good place to be. The people I work with have not stopped due to the virus. I would highly recommend putting your money here.

John Nellis · Answer

@Rick Pozos what are the specific ways you are using to find deals in San Antonio?

Joseph Cacciapaglia · Answer

What do you like about Dallas specifically? In my experience it is one of the pricier markets in TX, and many Dallas investors are looking in San Antonio these days because of this. Dallas has also tied their economy very strongly to the financial sector of the economy. That has set them up for a tumultuous ride over the next several years. I know many out of state investors choose San Antonio, because it has a diversified economy, and is the only top 10 city priced like a secondary market. It's one of the main reasons I moved to this market a few years ago. My second choice in TX would usually be Houston, but with oil prices where they are, all bets are off over there.Of course it will probably be easier to find deals in any of the major markets in Texas than in your local market. Last year, the vast majority of my business came from California investors moving their money to Texas, and I know I'm not alone in that.