Is Texas anyone else's favorite state to invest in right now?

Question

We've been spending a lot of time focusing our attention on Texas the past few months and feel like there are still great buys in a steady, emerging market. Does anyone else feel the same way? Are there other markets that compare to TX when talking about all facets of RE investing (mobile home, apartments, storage, land, etc.)?

Jay Hinrichs · Answer

I personally think its a locals market.. you need to off set sky high prop tax's with no income tax.. also foundation issues. and the ever challenging issue with contractors there.. its a MUST to find a good one and retain them. from my last 3 deals there prices are weakening if you really want to sell.. of course there are pockets.. but that's my experience.

Jeff Filali · Answer

This is from my recent blog post...Why REI’s should consider investing in Real Estate in Texas and Oklahoma…As a full-time Real Estate Investor, I primarily invest in Texas and Oklahoma, not just because I live here, I've looked into investing in many other states as well, but there are great markets in both Texas and Oklahoma where your money goes so much further. The median home price in Texas is $161K with 8% growth rates the past year and a lot of areas are easy to rent for 1-2% rates or more. The best markets are: DFW Metro, Austin, San Antonio, and parts of Houston Metro. DFW & Austin rank in top 10 in the Nation by many real estate investing reports. Forbes recent report: Full List: Where To Invest In Housing In 2017 ranked three Texas cities in the Top 20 Nationally. Dallas was ranked as the No. 1 Market in the Nation. By 2020, home prices in Dallas are expected to grow by 31 percent, the highest growth of any city listed. That projection is based on Dallas' 6.2 percent population growth in three years (2012-2015), 3.9 percent job gains last year and 9 percent annual home price gains. Fort Worth ranked No. 9 on the same list. Home prices gained by 9 percent in Fort Worth last year, Job Growth was 2.3%, and the population grew 5.2 percent in the same three years. San Antonio was No. 20 on the list, with home prices gaining 7 percent, 1.7 percent job growth, and 6.5 population growth.The median home price in Oklahoma is $113K with 4% growth rates the past year and a lot of areas are easy to rent for 1-2% rates or more. The best markets are: Edmond, Norman, Moore, Jenks, Bixby, Broken Arrow, Owasso and other parts of Tulsa & OKC. Also, our property taxes are very low in Oklahoma compared to other states. MarketWatch's report 5 Worst & Best Markets for First-Time Home Buyers had Oklahoma City ranked No. 1 and Tulsa right behind at No. 2 best Market in the Nation for First-Time Home Buyers. Houston, Texas ranked No. 5. The 5 worst markets were all in California (Anaheim, Riverside, Stockton, Long Beach, and Oakland). CNBC reported in their recent report The 15 Cities Where You Can Live Really Well on $60,000, Houston was No. 12, Oklahoma City was No. 13WalletHub's 2017 Best Cities For Jobs, has Plano, Texas as No. 2 Nationally, followed by No. 17 Garland, Texas, No. 21 Dallas, No. 22 Austin, No. 26 Grand Prairie, No. 37 Irving, No. 40 Tulsa, No 58 San Antonio, No. 69 Arlington, No. 75 Oklahoma City, No. 77 Fort Worth, and others in Top 100.This is great news for investors looking to rehab and flip properties. You can pick up great deals on off-market properties needing rehabbed, and know you're putting your money in great markets where homeowners are looking to purchase new homes. For "buy and hold" investors, the markets support rental properties, with high demand, and very low vacancy rates.Texas and Oklahoma also have many other smaller markets in both states where you can do very well investing based on oil & gas prices and pick up properties very cheap that will rent for more than 2%. When oil & gas goes up, rent rates go way up, sometimes more than double or you can rent by the room or by the week and when oil & gas prices drop, you can pick up more great deals buying foreclosure properties. Buy when oil is down, sell or rent when oil is up. If you're an Accredited Investor and would like to receive updates on “Off-Market Deals” in Texas & Oklahoma, look me up!! Best of success!!

Adam Acord · Answer

@David Thompson, You make some very good points about the SA market. The returns my clients are seeing now don't look like they're going anywhere anytime soon. This city is still growing. Economists are saying another million people for our metro in the next 25 years. The Boerne area alone is looking at another several thousand families in the next 4 years.

Jared Watson · Answer

I'll take a 40% return in Austin anyday👍

Jacob Pereira · Answer

I've made a decent living over my brief investing career in Austin, but I've warned many out of state investors to the same thing that @Jay Hinrichs mentioned, which is that we have no state income tax here, which means that our property taxes are astronomical to make up for it.If you live here, it's immaterial, but if you live in a state with income tax, you're essentially getting taxed twice (and yes, I'm aware of (some) of the complexities of cross-state earnings and how they're taxed). All I'm saying is do your math; some of the rules of thumb touted on this site don't apply to the Texas market.

Account Closed · Answer

Since enough Senators made it clear tonight there would be no import tax on Mexico and NAFTA is going nowhere, I am still big on Texas.

Account Closed · Answer

@Tyler Hall The risk of a major problem is increasing rapidly in Texas.

Carlos Flores · Answer

I was surprised to see Dallas had stronger home appreciation last year than San Francisco, Austin and San Jose.On the MF front, there are currently 46500 units either under construction or in lease-up in the DFW MSA. While that seems like a lot, we gained over 114k new jobs in 12 months ending Nov 2016 and more jobs are on the way.

Jay Hinrichs · Answer

@Brent Maxwell I lived a year in BC when I semi retired in 2002.. I can assure you that only those from the common wealth were able to immigrate.. those from Mexico were stopped at the border and turned back.I was kicked out of the country. and all I did was buy a home on golf course and furnish it and ski and fish and frequent resturants etc etc. but they still wanted me out

David Thompson · Answer

Hi Tyler,From you area, I have restaurants and a brewery near you, you may have heard of Uncle Bears, our can beer is in Safeway now. Re: Texas, not sure if its an emerging story. The 4 big cities in the triangle have been doing well for many years and that is projected moving forward. Its a job / population growth story w/ a lot of diverse industries and good quality of life at a reasonable cost that will continue to attract businesses to move here. Pro business climate. You have to be more selective as the tide has lifted a lot of boats like many places in the U.S. Focus on value add and niche areas like you are mentioning. Be patient and develop trustworthy contacts on the ground that can advise on trends, locations and niches that continue to work. Cash flows still pretty good. I like SA as its often more overlooked than the others. I personally don't do anything in MF in Austin, too rich but still hear of good deals being done in SA from my syndicate contacts there. I just sold a duplex and fourplex (new construction) in SA along the I-35 corridor which I believe is a smart place to look. I think Houston can be overlooked, Dallas is getting more challenging to find value.