Investing in North Texas

[R Metzgar]

Looking to start a conversation on North Texas. I hear the area is growing rapidly and would like to get my feet wet again. We are having a large exodus of Californians moving out in these areas but would like to get people insight on what they recommend. I would like to find a turnkey situation with obviously good rate on return. Landlord rights etc are better in texas from what I hear and a few other benefits. 

Any recommendations on property investment companies? OmniKeyRealty? etc .

Thanks

[Anderson Schulle]

The big companies are moving to the metro areas. So DFW, Houston, Austin. The growth we've seen here in DFW over the past years has been beyond anything I've seen before (population, housing, infrastructure...).

Speaking specifically about Dallas-Fort Worth...
Home builders are typically only building above the 300k price point, that's when their profit margins increase, so that's where you will find most homes priced at. This also means that homes under 300k (especially under 200k) are the most sought after. The other day we sold a rental property for a client, and had 21 offers in 2 days. More than half above asking price. In the end it sold for 176k. Our client bought it for 90k just 3 years before.

So home prices are going up. Rental prices started to stagnate. There are only so many 100-150 dollar yearly rent increases you can push onto tenants before they move out.

Historically, homes in Tarrant County have had better returns than in Dallas County. So ideally a home in a good school district, but in the 150-250k price range. Anything under 100k will be in a C- neighborhood, which comes with its own challenges.

There are lots of wholesalers here that we can connect you with. Those properties come with the challenge of you needing boots on the ground to get the rehab done. But it might get you 10% equity in the end. Unfortunately the 25% equity days are over here. Wholesalers are selling at 85% ARV, and often their numbers are not accurate.

Anything truly turnkey will most likely be either overpriced or in a lower income neighborhood. There is just no way of making good money with a turnkey business here in DFW. More than 2 years ago, yes. Now, you are essentially buying at or above market price with a turnkey provider. That's why there aren't many here.

Hope this helps. This is a great and booming area, very landlord friendly, very stable (even during the last crisis). And there is still some room for appreciation.