50% Rule In Dallas?

[Brandon G.]

First, I know the 50% rule is a guideline and not a rule. I am curious: Given the high property taxes here the Dallas area, how achievable is the 50% rule?

I ran a report using a house whose ARV is $150,000, bought at $105,000 (70% ARV). 10% maintenance and capex, 8% vacancies, .027% property taxes, 10% PM, $900/yr for insurance.

I show annual operating expenses at $9637 which is about 58%.

With a monthly mortgage of $532 (100% financed at 4.5%) this only cash flows at about $60 per month.

Is there something wrong with my calculations?

[Andy Collins]

Your on the top end of the price range to work well, at least that is what I have found

A house in the $110-$120k range is what I look for,  houses in the $150k range tend not to cash flow as well, add our higher property taxes and that is even more true.

I prefer the suburbs with decent school districts, most of my tenants have kids still in school, normally they are looking for a particular school, so find the best schools and find houses that would feed that school (in some districts it doesn't matter, like Garland, however in Mesquite, the demand is for Poteet High School, so I buy houses that are in the area that goes to Poteet