Would you invest 300 k in San Antonio (TX) or Raleigh (NC)?

Question

I want to invest in SFH or a duplex in San Antonio or Raleigh (ok with neighboring cities). I am a first-time investor, and this would be an out-of-state purchase. I have done much research and narrowed it down to these two cities. I like Texas, but the only thing that holds me back is the higher property taxes compared to North Carolina.

1- Money: ok to spend ~300K (prefer to put only 20-30% down) and invest in a couple of properties than buying one in cash

2- Prefer cash flow (of course, appreciation would also be great)

3-Prefer SFH over duplex just because with SFH (in a good neighborhood), I probably would have less headache and drama

Here are my questions:

1- Which city do you invest in and why?

2- Would you consider any other city in NC or TX? Why?

2-Am I correct in thinking SFH has less headache over multi? if not, why not?

3- How would you spend the 300k for investment?

Thanks,

Justin Brickman · Answer

Why do you say multifamily is preferred? It clearly depends on which market you're in and many other factors we don't need to get into. But if I had to choose one, single family portfolio would be the easy pick.

Less turnover & no tenant on tenant conflicts, better appreciation, more buyers if you want to sell, easier to finance, and more cash out options.

V.G Jason · Answer

You're talking $300k cash to invest, or $300k as your house price point leveraged? For both questions, I'd still apply the same answer I have above. The only other thing I'd add is I'd buy less properties, and better one's. Rather than more of them in lesser neighborhoods.

V.G Jason · Answer

I am in both cities pretty deep. And by Raleigh, I mean general Triangle(Durham, Cary, Apex).

I am very bullish both--clearly. $300k in San Antonio can go much further than Raleigh, so if you ever intend to scale it'd be more  practical in San Antonio. With that said, I think San Antonio  is like a small cap equity that is about to touch into mid cap and over time large cap. That's more speculation though. While I think Raleigh is a top 30% large cap equity that can hit the top 10%. That jump may be even larger and a bit less speculative given the investments there.

I would prefer SFH over duplex-- in pretty much any area they appreciate better. Duplex works best if you're young, single, and can cost your lifestyle. I get the 1 roof, multiple tenants. You can do that with rent by the room, etc. Cash flow may exist slightly better in San Antonio, but if it does truly grow into a large cap city expect the property tax to start wiping it away. Cash flow shouldn't be the focus of your investment.

In regards to which city,  my advice would be to visit both twice. Stay in different areas, get a feel for it. Then see what your money can get you better in each city, and I'd prioritize the best location of the cities I could get in either. While doing all that you want to be interviewing property managers, etc., to see if you can form a team too.

Basit Siddiqi · Answer

I think both markets are good - Why not invest in both if possible?The good thing about NC and TX is that they are getting a good amount of new people moving into both states.

Nathan Harden · Answer

Let me ask you a question.... Have you visited either of these cities for yourself? If so, which one do YOU prefer?

You're going to get people from both places saying to invest in their community (probably a local realtor trying to earn your business).

Then you're going to be left in the same situation. "He said invest in Texas but she said invest in NC"

There just comes a point in time where you're just going to have to jump. You said you've done your research. Great! Now I question, is the analysis paralysis? Just jump!! You're going to earn battle scars no matter where you decide. The point is to decide for you and your money. Don't let a random person be the decision maker as to where your hard earned money is spent.

Multifamily is preferred. The goal should be to own as many doors with as little roofs as possible.

MJ Jav · Answer

Thank you so much Tushar..Sorry, I might not have been very clear on the last question. if you had 300k in hand (aside from the loan you can get), how would you invest

Tushar Desai · Answer

#1 and #2 - provided my feedback in earlier thread

#2 _ it depends - I have duplex in NC RTP since 2007 and it has been smooth sailings for them since it all depends on the property management company you deal with

#3 Also in $300K you won't get duplex in any good localities in NC and/or Texas unless one is forced to go to shady areas where you then deal with lot of tenant eviction and section-8. I know there are many folks who adore section-8 but I prefer to completely stay out of it for obvious reasons.

Tushar Desai · Answer

Completely agree. The NC (RTP) and surrounding areas are very highly priced and most of them are townhomes with $150-$200 HOA fees which defeats the basic purpose. I have home in both areas (NC RTP and Dallas Texas) and see a huge difference. I was exploring San Antonio recently and trying to understand that market more as compared to Dallas Fort Worth where I see reduction in monthly cash flow and depleting overall returns as of now (tons of rental inventory there)

MJ Jav · Answer

Thanks a lot for the info V.G! Good idea to visit both.

Would you invest 300 k in San Antonio (TX) or Raleigh (NC)?

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