Midland Texas Investors

[Adam Engleman]

Hi,

I’m from New York and looking for my first intended investment property.

Midland TX Investors

Can you recommend a property Management Company there?

And is Midland a lucrative investment area for rentals?

[Kyler Peters]

@Adam Engleman as long as oil prices are doing well, yes.

[Mike Evans]

What do you plan to invest in? I’ve invested here in Midland & Odessa (single family) for the past ten to twelve years. The housing rental market is strong right now but It’s a cyclical market so be careful when you buy. I can also suggest a property management company if you need one. 

[Caleb West]

Good morning Adam, I'd second what Mike has said. It's cyclical so have a tolerance for that. I currently am not investing in Midland but keep up with local trends for the most part. There are certain areas in Midland that I feel you can cash flow great right now and still keep rented at a decreased rate in low oil price environments. Cost of entry in Midland is pretty high right now compared to other areas of Texas. 

[Adam Engleman]

@Mike Evans

Do you hope for higher or lower oil prices?

When it comes to the housing prices/rentals.

What area of midland is the best for rentals?

Yes please recommend some property managers.

[Adam Engleman]

@Mike Evans

Single Family seems to be the only thing available out there.

Can’t seem to find any Multi’s

[Adam Engleman]

@Caleb West

Where are the areas that you feel are the best?

Can you recommend any property management?

[Mike Evans]

@Adam Engleman

I don't hope for either. Both single & multi deals are hard to find but they are there and you won't find them on the MLS.

There is a correction coming but guessing when is like guessing the winning lotto numbers. 

A good property manager should be able to point you in the right direction as far as where to look. 

[Mason Moreland]

@Mike Evans

It’s good, but only if you are 1,000% sure you are getting in below market price and have set parameters for getting back out while things aren’t crashed.

We cashflow like crazy, but waited for a screaming good deal. Most deals aren't on MLS, particularly with multi family. Most potential multi's and SFRs that are below market here are rehab or D-class of late. Best method I've found is to pound the pavement and look around in person.

While you can find excellent deals on occasion and cashflow like crazy, it is really still a small town type of place and being there and having the personal connections goes a long way here. Just objectively, I would say look elsewhere in TX for more stable rent prices and more stable home values. 

High oil price means more activity, means more people, means more expendable $, means more demand, means higher rents. Low prices mean less activity, less people, less expendable cash, less demand, lower rents. You WILL track with the price of oil and amount of O&G activity out here.

Best places for A- and B-class SFR are north of I-20 business (except for D-class SFR), North/East of Andrews Highway/191, and west of Big Spring/Lamesa Highway. Under appreciated area is the southwest part of town inside the loop B-class and C-class SFR.

I think Lubbock has more long term and equity potential, and we have invested heavily there in the last couple years. We may get out of Midland soon, but only if opportunities with higher cashflow present themselves in other markets or industries.

[Mason Moreland]

Meant to tag @Adam Engleman whoops haha

[Adam Engleman]

@Mike Evans

Can you recommend a good propery management team?

[Adam Engleman]

@Mason Moreland

Can you recommend a good propery management team?

I probably have to buy on the MLS. I don't live there and I know how hot the market is there. Anything worth renting out Someone else will find before me. Unless you know of something?

As for rehabbing, I’m looking for more of s turnkey property.

Im unable to look around in person, I live in NYC.

Thanks for the education on the areas of Midland.

KIT

[Daniel Emery]

@Adam Engleman

I have personally flipped two houses, while I lived in them in Midland, TX, and really feel that its one of the best ways to make good in this market. I work in the oilfield as a consultant for the past 7 years here and the rental game, while it can be good, the overhead just to get into something is extremely hard. This is whether the price of oil is up or down.

My family took the approach of finding two properties which one was a foreclosure while the other was a defaulted VA loan. The two houses were in pretty bad shape and when I did the math but seemed like great opportunities. In fact, both were great but at the time I needed to get out of each the economy was at a high and a low for the other.

House #1 Sale Price 182K rehab 25k = So I was at 207K. This home was 2286 and was put together well once I was finished. The oil was booming when I found the property and with my assessment was projected to sell at $125 sq. Ft. This number is extremely common in Midland especially for a house that is updated. Long story short 2015 the oil price per barrel tanked, everyone lost their jobs, people moved away and nobody really was purchasing like in the boom. I ended up settling for 225k. Though a profit in my mind I could have done so much more to put myself in a better situation. We sold because we ultimately needed to get out from under it for other financial reasons.

Now when the oil is up

House #2 Sale price 202K rehab 35K = So 237K. This home was a mere 1896 sq. Ft. In comparison to the other, 400 sq ft. Smaller. The oil was booming we had a private contractor bid us everything we held onto for about 3-4 months to get everything done. We sold the house in 1 day, basically, 5 shows 3 offers and we were done. The house sold and appraised right where we thought it would and priced out at $148 sq. Ft. WOW. Do the math its not bad by my standards...we never even touched the outdated bathrooms.

There are plenty of these gems here in midland/Odessa. Timing is key and more then likely it needs to be the REO/Foreclosure/Default loan scenario because the "normal" house on the market will be outdated anyways, it will just be clean.

There are many ways to BRRRR and maybe just do what I tried Rehab/Flip. I really would say is to take caution study the oil & gas industry and then after serious though dive in.

Hope that helps!!

[Jesus Vazquez]

@Adam Engleman Sent you a message.

[Jamie Fletcher]

What cap rates are you guys looking for on rental properties in Midland/Odessa? & are you buying at retail price or are you looking for something with a little equity? I am a wholesaler in the area and I've been coming across leads that would work well for rentals but they wouldn't have a TON of equity probably 10-20% with cap rates 10-15% purchase prices below 200k

[Adam Engleman]

@Jamie Fletcher I would really be looking at cash flow now. Not cap rates. Would want it to cash $200 a month after PITI, NOIs and 20% down. And I would like to find a property manager first. I was looking back in July but I moved into a new apartment and got distracted. But property values and rent seem to reflect off the market and that worries me with a possible recession.

But I would take a look. I would prefer multi family but I know they are hard to come by. Multi preferred would be =<$250k but could go to $350k if it’s good.

[Mason Moreland]

@Adam Engleman not yet! Right now, I am the property management team here.

[Steve Meyers]

@Jamie Fletcher @Jesus Vazquez sent you both PMs regarding Midland, TIA

[Eliott Elias]

Come on over to Killeen Texas, this is where I invest and find success