The Rise of Waco, TX as a Prime Market for REI

[Joshua Carvalho]

Have you ever thought about REI in Waco, TX? More and more people are these days. I moved from L.A. via Miami to Waco a year and a half ago and was amazed at the real estate market I found here. Let me tell you how Waco has become Texas' new hottest market to invest in and why you should consider investing in this market. Here's a little bit of history: In the first half of the 20th Century Waco was a booming city on it's way to be just as large of a city as Austin or even Dallas, but in 1957 a catastrophic tornado hit Waco, destroying it's entire downtown area. Most of the population moved to the surrounding suburbs or other cities and abandoned the downtown area, causing it to become a center for poverty, drugs, homelessness, and crime. In addition, the David Karesh scandal of the 1990's put a bad stain on the city's reputation even though the cult was based 30 minutes outside of Waco in the countryside. Then comes Chip and Joanna Gaines and their hit show "Fixer Upper". They are both born and raised in Waco and have a huge heart for the city. They began their company, Magnolia, years ago as a house flipping business and a small gift shop that they still own and sell products out of. It's currently called "Little Shop on Bosque" and still operated by them today. Once HGTV picked them up, "Fixer Upper" quickly became the channels #1 show and eventually became the fifth most popular show in all of television, worldwide. After five seasons, at the height of their shows popularity in 2015, they decided to pull the plug on the show and focus on their 5 kids, on reviving the city of Waco, and launching Magnolia Magazine. With all the money they had made from the show they bought a few city blocks in the heart of the neglected downtown of Waco, applied their renovation magic to it, and quickly built a beautiful Magnolia campus in the heart of the city. This campus hosts a large Magnolia home goods store, high end furniture store, cupcake bakery, coffee shop, gardening shop, live music concert venue, large grass area with toys and balls for kids to play with, an open plaza with eight food trucks, a small baseball field (that Babe Ruth once played on and families can now play on for fun), a restored historic chapel (the oldest chapel in Central Texas), and six boutique shops with men, women, and children's products. And it doesn't stop there. Magnolia has an incredible restaurant in another part of Waco, they bought a historic hotel that they are currently renovating, they bought an actual castle in the heart of the city that they are currently renovating, they own one of the largest real estate brokerage firms in the city that continues to serve the real estate market, and they themselves own several Magnolia short term rental properties that tourists can rent nightly to have the full Magnolia experience. Before the pandemic, Magnolia alone (not including Baylor University or any other Waco attractions) was drawing in 10,000 tourists a week to Waco and a total of 1 million tourists a year. They also held two annual events in the Fall and Spring that drew in over 100,000 tourists each. Before the pandemic, they employed over 900 people in Waco. Post Pandemic, the tourism and jobs continue, but at a lower number and slightly slower pace. The Gaines' boldness in renovating the heart of downtown Waco immediately aroused the attention of small business owners, entrepreneurs, and investors all over Texas and the country. New restaurants, retail stores, gift shops, etc. began popping up all over downtown Waco. Larger companies also began investing in Waco. SpaceX now has a rocket testing center right outside of Waco, Amazon is currently building a huge distribution center in Waco, and BSR Surf Resort & Cable Park built the #1 wave pool and cable park in the world, making Waco an international surf and wakeboard destination. With real estate prices soaring sky high in Austin and Dallas, investors started looking at Waco's cheap housing market as the new forefront in Texas for great real estate deals. For the first time since 1957, Waco experienced both a population and real estate boom. From the 2015 to 2020, the value of real estate more than doubled. Before 2015, most decent houses in Waco were valued under $100k. Currently, a decent house in Waco ranges from the low to mid 200's. But don't worry, you could still find PLENTY of distressed properties under $100k in Waco. The pandemic has actually caused Waco's housing market and population to grow even more. My own realtor said that 2020 was the most lucrative year of her career and that nearly all the people buying houses in Waco are people who are fleeing California, New York, and Oregon, moving to Texas in hopes of living in a free and functional society again. With Austin, Dallas, and Houston becoming more expensive, many are finding affordable housing in Waco. In conclusion, while most of the USA began experiencing an economic and real estate boom from 2009 and onwards, following the 2008 crash...Waco remained an economically depressed city. Waco's recovery began in 2015 with the Gaines turning the city around. Gentrification, economic and real estate renewal has only been taking place for the past five years. Since Waco is running 6 years behind the rest of the country and with millions of people now moving to Texas, we know what to expect for Waco's future in the next 6+ years and THAT is what makes Waco one the most attractive real estate markets in the country today. Lastly, since the Gaines own several Airbnb's in the city, Waco and most of it's surrounding cities have become a welcoming area for short term rentals. There's plenty of regulation surrounding the STR industry, but it's perfectly legal and welcome here. If you're looking for a short term rental property manager, hit me up. That's my area of expertise. I manage several STR properties in the Waco area.