Commercial Real Estate Investor · Pinole, CA · Member since 2014 · 51 posts · 12 votes
Hello All....
I was wondering about the Texarkana region of Texas for investing in Multifamily property...I don't know the area and I was just wondering what the opinion is of the area....is it a dead zone or does it have potential for some future growth or at the least, a good place to invest for stable cash flow.
I spoke with some brokers today and I got two very different viewpoints...one guy flat out said it sucks and my money would be better spent elsewhere and another painted a rosy picture with lots of business and transportation going on in the area...I would love to get the opinion from people here on BP as I value my fellow investors in the area with boots on the ground.
I realize its not one of the hotter markets that is in the news all the time...I am looking for a good stable market that isn't dying and has potential for at least some future growth.....
I grew up there and family still lives there. It's one of those "nice place to raise a family" towns. My take on it is it's a stable area, but don't expect a lot of appreciation. You're probably looking at $700 give or take for average rents.
There has been a lot of development along and north of I-30. I won't call it "growth" because it came at the expense of the older established retail areas. You'll find a lot of newer, pricier apartment buildings in this area. South of I-30 will be mostly older and more modest complexes.
The major employers in the area are exactly the same as when I went off to college in 1976, and that says something. We had Red River Army Depot, Cooper Tire plant, a couple of paper mills outside of town, and the Federal Pen. Other major employers are the two hospitals, Walmart, and the school districts. As far as I know, nothing big and new has moved in during that time.
On the bright side, the city is halfway between Dallas and Little Rock, and a short drive to both. They recently finished I-49 from Shreveport, which will extend to Fort Smith and Kansas City eventually. It will also have a spur from I-69 the NAFTA superhighway, which will link Mexico and Canada. It will definitely be a crossroads then, but that's years away from completion.
Bottom line, in my opinion, is that you could probably pick up some good deals there and generate some cash flow. But if you're looking for growth, I would recommend Tyler/Longview or the Fort Smith/Fayetteville/Springdale/Rogers corridor in NW Arkansas.
Great question! I'm from Texarkana and have family who still lives there, but I've been in the Dallas/Fort Worth area for nearly 20 years now. I own a house in Plano, TX my own) and a rental house in Garland, TX. I have actually considered buying in Texarkana after seeing a multifamily listing on Loopnet, but I was a little scared of the market myself. I would not describe Texarkana as a growing area, although stable would probably be fair to say. It does have a lot more to offer people than it did when I was growing up, such as more stores and restaurants and a much better high school (renovations). Texarkana is family oriented and somewhat blue collar. It is surrounded by lots of farm land, and although it is a city... it's a small one. If you go to the mall or the grocery store, you are going to see people you know there. The population grows very slowly. I think this is because a lot of people leave! LOL... most of my friends from high school left and moved away afternoon graduation. A few remained and raised families, hence the small growth. There's just not much to do there professionally other than standard occupations every town needs, like doctors, lawyers, teachers, electricians, etc. If you have a profession like mine (graphic designer), there is not going to be a lot of opportunity for you there, hence, I don't live there. Another thing I did not realize until after I left is that there is a lot of poverty there. I suggest looking "Texarkana" up on Wikipedia. That's where I read that the poverty rate was somewhere around 20%. I had no idea! Houses are very inexpensive there compared to the rest of Texas even, so you can live fairly comfortably on a low salary. And salaries are also low! I don't want to be too negative because this is my hometown, but I will tell you that after moving to the D/FW area, there is just no comparison. I would not want to move back to Texarkana. OK, so regarding property values... this is interesting because my dad is considering selling the home we grew up in, there. It is a 3/2, about 2000 square feet, on a 3/4 acre lot (all the lots are much bigger there, which is a plus.) He just put in new hardwood floors, Granite counter tops and new window treatments, and has 2 outbuildings on the property. There is a lovely garden in the backyard. A Realtor suggested he list it at $158,000! Granted, it is a modest house, but with all the updates, that is still pretty low. He was so disappointed, he did not even list it. In Plano, TX, where I live now, that house would be probably $250,000, on a zero lot. In Garland, TX, maybe $225,000. I lived in Garland for about 10 years and it's, uh, not the nicest area in D/FW, but it's population is at least 3x Texarkana's, and I'm making about $575/mo cash flow on my rental there. Texarkana may be cheap, but rents are low and there is less demand. What's the name or address of the apt complex yoi are considering? I will ask a friend who lives there for the scoop. It may be a property where the government pays the rent...
Jeff Banky I invest in Arkansas but nowhere near Texarkana. I look at the market and think about it being smallish from a population size and it's not as though there are major geographic barriers to growth. So you can just keep expanding outward (and it's not like traffic turns to Dallas or Los Angeles traffic) so the pressure to increase prices isn't there. Plus, if you're on the Texas side, you have brutal Texas property taxes. In fairness, I basically steer clear of even looking at anything south of Little Rock.
I grew up there and family still lives there. It's one of those "nice place to raise a family" towns. My take on it is it's a stable area, but don't expect a lot of appreciation. You're probably looking at $700 give or take for average rents.
There has been a lot of development along and north of I-30. I won't call it "growth" because it came at the expense of the older established retail areas. You'll find a lot of newer, pricier apartment buildings in this area. South of I-30 will be mostly older and more modest complexes.
The major employers in the area are exactly the same as when I went off to college in 1976, and that says something. We had Red River Army Depot, Cooper Tire plant, a couple of paper mills outside of town, and the Federal Pen. Other major employers are the two hospitals, Walmart, and the school districts. As far as I know, nothing big and new has moved in during that time.
On the bright side, the city is halfway between Dallas and Little Rock, and a short drive to both. They recently finished I-49 from Shreveport, which will extend to Fort Smith and Kansas City eventually. It will also have a spur from I-69 the NAFTA superhighway, which will link Mexico and Canada. It will definitely be a crossroads then, but that's years away from completion.
Bottom line, in my opinion, is that you could probably pick up some good deals there and generate some cash flow. But if you're looking for growth, I would recommend Tyler/Longview or the Fort Smith/Fayetteville/Springdale/Rogers corridor in NW Arkansas.
I agree with Fred. You will probably not get a lot of appreciation in the Texarkana area. I invest in the Fort Smith area and would recommend it to any investor looking for stable cash flow.
When it comes to appreciation, I have heard many people who are very bullish on the prospects of the Fort Smith MSA after the I-49 extension is completed. Then you will have the intersection of a major North/South interstate (I-49) with a major East/West interstate (I-40) as well as the Arkansas river port in Van Buren.
It's a long term play because the funding to finish I-49 isn't there yet. However, in the mean time you are getting consistent cash flow.
This topic is memory lane for me. Fort Smith was my second home when I was a kid because my dad lived there. So I was there for summers, school breaks, etc. I even stayed there for school one year. Went to Belle Pointe School on Dodson Ave.
I own several (3) single family homes in Texarkana and am in the process of purchasing several more (7-12). I live in Arlington which is about 3 hours drive but I travel there 2-3 days a week. Texarkana is definitely a growing market, with ample demand for housing. Texarkana is one of the few if not the only cities in the US that has 3 interstate highways running through it. Texas A&M has recently built a campus in Texarkana that is quickly being expanded. There are some decent sized developments underway and several fortune 1000 companies have been steadily building hotels and commercial centers to accommodate future growth. Texarkana will not become a Dallas in our lifetime but there is enough demand for housing, and purchase opportunities that could make for a good investment. Feel free to reach out to me with any questions or if you'd be interested in meeting up to show you around the city.
I just completed a broker's opinion of value on a 1970s apartment in Texarkana (184 units). It was about $30/sqft which is hard to believe... 16%+ return on equity. It's like any secondary/tertiary market, stable and cash flowing.
The primary employer is the Red River Army Depot and I doubt that's going anywhere anytime soon... Class C, don't over leverage, don't overpay, and you can't go wrong.
I own property in similar Texas tertiary markets, but not in Texarkana. Although I haven't experienced a recession during ownership of those properties, historically occupancy is relatively stable (89.5% average during recession).
I want to add... I see investors making money in any market and who have been around for more than one cycle. One of our clients out of Chicago hunts for poorly operated apartments from long term owners, and he could care less about the market.
I just completed a broker's opinion of value on a 1970s apartment in Texarkana (184 units). It was about $30/sqft which is hard to believe... 16%+ return on equity. It's like any secondary/tertiary market, stable and cash flowing.
The primary employer is the Red River Army Depot and I doubt that's going anywhere anytime soon... Class C, don't over leverage, don't overpay, and you can't go wrong.
I own property in similar Texas tertiary markets, but not in Texarkana. Although I haven't experienced a recession during ownership of those properties, historically occupancy is relatively stable (89.5% average during recession).
Very interested, I don't think I am allowed to put my email in here... so please PM me if this is available.
Now since texarkana Arkansas is a border state it falls under the tax rules of texas. People from my borthers company are really wanting to get transferred there bc of the tax situation.