Strategy & tips for investing in Austin and/or Dallas
Rental Property Investor · Austin, TX · Member since 2017 · 38 posts · 4 votes
I have been offered a position today to relocate to Texas (most likely Austin or Dallas) and its looking like it will be a quick turn around. I'm currently in So Cal, and would most likely sell here and buy there. I'd like to invest in a personal residence for a new family, as well as look at investment opportunities. I wouldn't be opposed to combining the two with the right live-in multi-family opportunity with plenty of privacy between units. More realistically, I'd probably be looking for the right neighborhood/property to fix, force equity, and live in while simultaneously looking for multi family opportunities to invest in, fix, BRRRR, etc..
I'd be curious to hear from BP Texans with tips, advice, etc. on any and all of the following...
1. Best sub-markets to focus in on in the greater Austin and/or DFW for both personal residence and multi-family investment opportunities.
2. What strategies are working right now. What do you see as a solid game plan for the next 3-5 years?
3. What do I not know about Texas real estate that I should? What are the best resources to start with?
Thank you in advance for your help! Hoping to meet and add value to all the great deals I hear about in Texas!
Congrats on the new position! I'd need to know much more about you and your situation to give detailed answers. However, here are some initial thoughts on your questions:
1. I second @Marian Smith and @Paul B. about your primary residence. In Austin, you need to be as close to your work as you can be while staying within your budget and living in an area that you like. Your future co-workers will be the best source on that. Ask where they live and what the commute to the office is like. For multifamily, you need to know your budget, the numbers that you're seeking, and the kinds of properties/projects you're willing to take on as a landlord. Once you have that, an investor agent like me can tell you what your options look like in the Austin area.
2. Owner-occupying or "house hacking" is the strategy I have seen most often among my first-time investor clients this year in Austin. Flipping activity here is still high and competition for deals is fierce. I wrote an offer on a flippable single family property in South Austin last week that had 30+ offers by the end. Straightforward residential buy and hold investing for immediate cash flow is almost non-existent, especially for single family homes. Currently, you almost always have to purchase at negative cash flow and have a solid plan to value-add and raise rent(s) ASAP after purchase. Lots of investors are still speculating on appreciation, and out-of-state buyers are still very active in Austin. Most of those who are still making buy and hold work are hustling doing their own direct marketing, driving for dollars, knocking on doors, talking to neighbors, cold calling, etc.
3. Property taxes are high in Texas, especially in the Austin area, but there's no state income tax. Check out the Texas A&M Real Estate Center and the Austin Board of Realtors for more information on the Texas and Austin area housing markets. Overall, the Austin area has been in an extreme seller's market for roughly the past 5 years, with less than 3 months of inventory in many price ranges, especially under $500k.
I hope this helps. Good luck!
For personal residence you'll want to be near your job. The traffic in Dallas is nowhere near as bad as So Cal, but it's pretty bad in Austin, and even in Dallas it seems to be getting worse by the week with all the people moving here.
For multi-family, Class B and C is a better investment opportunity than Class A (all the new construction, and perhaps the type of place you might want to live). The towns between Dallas and Fort Worth are one area to look - Arlington, Hurst, etc.
Congrats on the new position! I'd need to know much more about you and your situation to give detailed answers. However, here are some initial thoughts on your questions:
1. I second @Marian Smith and @Paul B. about your primary residence. In Austin, you need to be as close to your work as you can be while staying within your budget and living in an area that you like. Your future co-workers will be the best source on that. Ask where they live and what the commute to the office is like. For multifamily, you need to know your budget, the numbers that you're seeking, and the kinds of properties/projects you're willing to take on as a landlord. Once you have that, an investor agent like me can tell you what your options look like in the Austin area.
2. Owner-occupying or "house hacking" is the strategy I have seen most often among my first-time investor clients this year in Austin. Flipping activity here is still high and competition for deals is fierce. I wrote an offer on a flippable single family property in South Austin last week that had 30+ offers by the end. Straightforward residential buy and hold investing for immediate cash flow is almost non-existent, especially for single family homes. Currently, you almost always have to purchase at negative cash flow and have a solid plan to value-add and raise rent(s) ASAP after purchase. Lots of investors are still speculating on appreciation, and out-of-state buyers are still very active in Austin. Most of those who are still making buy and hold work are hustling doing their own direct marketing, driving for dollars, knocking on doors, talking to neighbors, cold calling, etc.
3. Property taxes are high in Texas, especially in the Austin area, but there's no state income tax. Check out the Texas A&M Real Estate Center and the Austin Board of Realtors for more information on the Texas and Austin area housing markets. Overall, the Austin area has been in an extreme seller's market for roughly the past 5 years, with less than 3 months of inventory in many price ranges, especially under $500k.
I hope this helps. Good luck!
@Hunter Peterson I personally like the Dallas/Ft. Worth area for both house hacking and investing. Particularly the Ft. Worth side of the metroplex. @Paul B. is right about the Austin traffic. It is horrible. Some parts of Dallas is no picnic either. Most due to the ever present road construction expanding the roads. But with inventory for rentals running around 5% I have never had any problems finding tenants for my units when they become vacant. Also, with annual rents going up 5% as well per annum this is a great market it invest. If you want to connect with a fellow investor that can share with you more details about the Dallas/Ft. Worth area and help you build your network to help your business grow and be successful just send me a PM and lets connect.
Definitely recommend Dallas for starting investor. Find a duplex, fix it up, get strong cash flow, then move on. Can easily find $3-400k duplexes here, probably don't exist in Austin.
Hi Hunter,
Congrats on your new relo opportunity. I went to Austin this summer to check it out, the traffic is worse or equal to LA. Comments from others are spot on, live close to work. By the way people, I saw bummer stickers on cars that said Austin is not CA keep that in mind when you are looking for your new home.
Good luck!
@Marian Smith thanks for the advice. I think that's exactly what I'll do.
@Paul B. thanks for the help. I'll look in those areas for opportunities.
@David Ivy thank you for all the helpful info. I replied to your DM.
@Joe Funari I appreciate the info. It looks like I'll be moving to Plano/Carrollton/Frisco/McKinney area. My company will be located just east of Carrollton. My first focus will be to get my bearings and find a place to live (probably rent to start), but I'd be very interested in building my network for opportunities in the not so distant future. If you have any leads on great places to rent I'm all ears!
@Ronald Rohde after some very basic searches it seems there are some great opportunities. And the pricing compared to CA is insane! Thanks.
@Carol Bloom I appreciate the advice. I think it will be most apparent that TX is not CA when I looking for the beach!
@Marian Smith thanks for the advice. I think that's exactly what I'll do.
@Paul B. thanks for the help. I'll look in those areas for opportunities.
@David Ivy thank you for all the helpful info. I replied to your DM.
@Joe Funari I appreciate the info. It looks like I'll be moving to Plano/Carrollton/Frisco/McKinney area. My company will be located just east of Carrollton. My first focus will be to get my bearings and find a place to live (probably rent to start), but I'd be very interested in building my network for opportunities in the not so distant future. If you have any leads on great places to rent I'm all ears!
@Ronald Rohde after some very basic searches it seems there are some great opportunities. And the pricing compared to CA is insane! Thanks.
@Carol Bloom I appreciate the advice. I think it will be most apparent that TX is not CA when I looking for the beach!
So did you move to Texas yet?