Where in Texas would you invest with 200K and why

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Where in Texas would you invest with 200K and why

Alice Huang
Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes

Hello BP!

Would love some insight from those who live/work/from/invest in Texas!

Where in Texas should I be looking at with a budget of around $200k?  

Would like to BRRRR and open to SFH or multi.

My goal is to cash flow and get my capital back through BRRRR to reinvest.

Thank you and look forward to your insight.

Best,

Alice

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Ryan KellyBusiness Member
Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
6y

@Alice Huang I personally would look in smaller markets where homes in the $75k to $150k price range are more common. Cities like Waco, Corpus Christi, Temple might be decent options. All of the larger metros are priced well above this range, making BRRRR investing extremely difficult to execute.

[email protected]512-674-5478
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  • Anthoney Hanks
    Real Estate Broker · Forney, TX · Member since 2019 · 1k+ posts · 399 votes
    6y

    With a $200K budget, I believe you would have several options in Texas. DFW is a hot area just like the others. Here is a graph of Homes For Sale. As you can see, it is on the rise. So not only the chance for cash flow, but appreciation.

    2Reply
  • Kenneth McKeown
    Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
    6y

    @Alice Huang using the BRRRR method will be easier in markets that the entry price for homes are lower. Obtaining % equity in lower priced homes are easier (typically, ex. making a $100k home worth $140k is easier than a $300k home worth $420k).

    $200k I believe will be hard to make work in Austin.. but I'm not knowledgeable on their market. It's possible in DFW and Houston (in certain areas) may be slightly cheaper. San Antonio is the cheapest of the 4 large city/metroplexes in Texas. 

    I personally would stick with one of those four - but everyone has their own opinion.

    3Reply
  • Jenny Roman
    Lender · Member since 2020 · 89 posts · 69 votes
    6y

    @Alice Huang Hi Alice,  Texas is definitely growing and inviting many out of state investors in. Houston and Austin are booming. If I may assist let me know.

    3Reply
  • Michael DangPro Member
    Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
    6y

    Houston, DFW, SA, and Waco all have great underlying fundamentals.  Job growth, population growth, rent growth, industry diversification, income growth, low crime, and lifestyle.  As always it depends on the submarket within each MSA.  Plus, the ease of finding qualified contractors, money lenders, and etc are prevalent in these markets.

    1Reply
  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    @Alice Huang I personally would look in smaller markets where homes in the $75k to $150k price range are more common. Cities like Waco, Corpus Christi, Temple might be decent options. All of the larger metros are priced well above this range, making BRRRR investing extremely difficult to execute.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5110 Reviews
    WebsiteView Page
    5Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    6y

    Is that $200k cash or your financed price? I'd say Temple or anything along the 35 corridor north of Austin.

    2Reply
  • Cameron TopePro Member
    Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @Alice Huang it's awesome to see that you have a strategy and plan - you'll beat most newbies!

    Truth is BRRRR works in every market - as long as you have a solid team in each area - whether you're in Hawaii (@Brandon Turner just completed a BRRRR there) or a small town in Texas (I did a BRRRR in La Marque, TX with a population of ~15k). 

    The most important thing is finding a deal that fits your criteria. 200k is plenty to put to work - especially if you partner with a solid private money lender. 

    There are investors successfully completing the BRRRR strategy in every market in Texas and across the country. It's about where you have a solid team and want to do deals - not what's the best market for BRRRR.

    Best of luck!  

    [email protected]832-770-7090
    1Reply
  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Alice Huang:

    Hello BP!


    Where in Texas should I be looking at with a budget of around $200k?  

    Would like to BRRRR and open to SFH or multi.

    My goal is to cash flow and get my capital back through BRRRR to reinvest.

    Come buy two rent houses in San Antonio and rent them out for $1,100/mo each!

    1Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    I'm partial to San Antonio (the real estate market was a big part of why I moved here 2 years ago). There are a lot of economic and demographic reasons to believe San Antonio will outperform a lot of the other major metros, but the combination of population growth and low price point are the biggest factors. For under $200K, there are a ton of single family BRRRR opportunities here, and you could certainly find duplexes in that price range as well.

    [email protected]979-218-2286
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    2Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    6y

    @Alice Huang

    DFW has been on fire lately. Tons of good high paying jobs coming here with lots of growth. Shortage of housing and high demand.

    0Reply
  • Will Pritchett
    Rental Property Investor · San Antonio, TX · Member since 2011 · 512 posts · 290 votes
    6y

    Another vote for San Antonio.  65 people move here daily but we're still affordable.  I would not buy a 200k value property however, unless it is a multi-unit.  

    Best,

    Will

    1Reply
  • Alice Huang
    OP
    Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
    6y

    @Jason Hirko @Joseph Cacciapaglia @Will Pritchett @Michael Dang @Kenneth McKeown

    Also anyone else who have suggested San Antonio, where in SA should I look at and where should I aovid?  Thank you all again for your insight.

    0Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Alice Huang:

    @Jason Hirko @Joseph Cacciapaglia @Will Pritchett @Michael Dang @Kenneth McKeown

    Also anyone else who have suggested San Antonio, where in SA should I look at and where should I aovid?  Thank you all again for your insight.

     There are a number of different spots in San Antonio that do very well. If you're coming from Austin, you might want to check out some of the suburbs, like Converse or Universal City. I know a lot of investors that do well over there. There are also a lot of spots in the city to check out. There are good cash flow deals to be had in zips 78201, 78222, 78227, 78228, and several more. Your risk, cash flow, and appreciation profile will should determine which areas are best for you. Of course you'll have to look at the figures for each neighborhood and subdivision as you get to a more granular level, but hopefully this is a start.

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
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    0Reply
  • Andrew McKinnon
    Houston, TX · Member since 2017 · 38 posts · 19 votes
    6y

    @Joseph Cacciapaglia Im just starting to research that area (I’m from Houston).

    Where do you like picking up buy and holds?

    0Reply
  • Andrew McKinnon
    Houston, TX · Member since 2017 · 38 posts · 19 votes
    6y

    @Joseph Cacciapaglia sorry just saw this post haha

    0Reply
  • Jacob Pereira
    Real Estate Agent · Austin, TX · Member since 2014 · 636 posts · 486 votes
    6y

    @Kenneth McKeown, with 200k you could buy 99% of the properties in Austin, provided you still qualified for the loan. Even if the OP chooses to put 20% down (which I wouldn't recommend) that would still come to a million dollars, which goes pretty far in this market.

    0Reply
  • Kenneth McKeown
    Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
    6y

    @Jacob Pereira pretty sure the OP is saying $200k is her budget with a loan. Also a quick search on Redfin shows that there are 2,000+ homes in the city of Austin. Only 126 remain after the max budget is set to $200k. It's pretty safe to say Austin is the most expensive metroplex in Texas - and just about anyone would agree with that.

    2Reply
  • Alice Huang
    OP
    Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
    6y
    Originally posted by @Kenneth McKeown:

    @Jacob Pereira pretty sure the OP is saying $200k is her budget with a loan. Also a quick search on Redfin shows that there are 2,000+ homes in the city of Austin. Only 126 remain after the max budget is set to $200k. It's pretty safe to say Austin is the most expensive metroplex in Texas - and just about anyone would agree with that.

    @Jacob Pereira Spoken to your lenders by the way, thank you.  I do not currently qualify.  Kenneth is right.  Can only get hard money without the visa.  I cannot get a visa without an active investment.  Catch 22.  No longer considering Austin essentially of what Kenneth said.  

    0Reply
  • Alice Huang
    OP
    Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
    6y
    Originally posted by @John Morgan:

    @Alice Huang

    DFW has been on fire lately. Tons of good high paying jobs coming here with lots of growth. Shortage of housing and high demand.

    Any areas there you can recommend that are under $200k for purchase and rehab?

    0Reply
  • Jacob Pereira
    Real Estate Agent · Austin, TX · Member since 2014 · 636 posts · 486 votes
    6y
    Originally posted by @Kenneth McKeown:

    @Jacob Pereira pretty sure the OP is saying $200k is her budget with a loan. Also a quick search on Redfin shows that there are 2,000+ homes in the city of Austin. Only 126 remain after the max budget is set to $200k. It's pretty safe to say Austin is the most expensive metroplex in Texas - and just about anyone would agree with that.

    Yes, I would a agree that Austin is the most expensive metro in Texas; proper data can be misleading, but it never lies. A max budget, after any loans, implies either almost no savings or almost no income, so I'd be surprised. You might be right, though; I'd just never considered it.

    0Reply
  • Brett Cox
    Rental Property Investor · Waco, TX · Member since 2019 · 16 posts · 21 votes
    6y

    @Alice Huang Home value is shooting through the roof throughout Texas, but San Antonio is the most affordable like people said.

    I lived in San Antonio for 8 years and have a rental house there that is doing well. However, like the rest of Texas and most the US, the 1% rule is almost impossible to get now as the home prices have been soaring while rent prices have been more stagnant.

    I live back in my hometown of Waco now, where amazingly homes are going for more and selling quicker here than in SA. Weird stuff going on. And rental prices in Waco are much less than SA.

    There’s another recent post about people on here talking about high vacancy rates with their SA rental homes. Sitting vacant for months despite low rents. I haven’t had that issue because of the location I’m in, but others are struggling in other areas.

    Hope that helps!

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    6y
    Originally posted by @Alice Huang:
    Originally posted by @John Morgan:

    @Alice Huang

    DFW has been on fire lately. Tons of good high paying jobs coming here with lots of growth. Shortage of housing and high demand.

    Any areas there you can recommend that are under $200k for purchase and rehab?

     Grand Prairie, Arlington and Ft Worth with rent ranges between 1200-1800/month. Huge demand for rentals with great appreciation in that range in C+ neighborhoods. 

    0Reply
  • Robert Youngquist
    Rental Property Investor · Houston, TX · Member since 2018 · 15 posts · 2 votes
    6y

    Hello Alice!

    Been on BP for sometime now but not that active so maybe I can offer some incite and change my inactive status ;-) 

    Welcome to the great state of Texas!

    We found the major 6 cities of Texas to be either over priced or just very competitive from investors, both new and old, usually creating artificial demand and over spending. I have only wholesaled properties in the Major 6 because the prices I see investors spending is far above the 70% ARV minus repairs. We found SETX (Jefferson and Orange County, Beaumont, Port Arthur, Orange) to be perfect. These areas have seen consistent, predictable growth and strong oil & gas employers. Cities like Port Arthur, are receiving tons of grant dollars, tax incentives and private money invested in the downtown and surrounding areas. Very exciting to see beautiful, old 20's architecture buildings come back to life, many that have been left abandoned for 30 to 40 years! Loads of on and off market deals, we have some wholesalers that we work with and really looking to ramp up our 2-4 MF BRRR purchases this year. Currently have 14 doors on track to do double that this year. We take on select investors as partners in our MF purchases. Always happy to chat with fellow investors and get them just as excited about, and ultimately participating in our area.

    Tip we learned the hard way: Construction team and material management are key to success! We went through several contractors and subs. After 2 years in the area, we have found the right team of every trade needed for cosmetic to full-gut rehabs.

    Below is link to local story on PA downtown progress and the financials from our current BRRR quadplex. I can tell you, I had originally projected ARV of quadplex to be $125k to $150k. We just got the BPO back from our lender, its going to far exceed those #'s!!



    https://www.panews.com/2019/10/26/downtown-vision-taking-shape-motivas-aggressive-plans-could-have-workers-in-place-by-2020/

    2Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Brett Cox:

    @Alice Huang Home value is shooting through the roof throughout Texas, but San Antonio is the most affordable like people said.

    I lived in San Antonio for 8 years and have a rental house there that is doing well. However, like the rest of Texas and most the US, the 1% rule is almost impossible to get now as the home prices have been soaring while rent prices have been more stagnant.

    I live back in my hometown of Waco now, where amazingly homes are going for more and selling quicker here than in SA. Weird stuff going on. And rental prices in Waco are much less than SA.

    There’s another recent post about people on here talking about high vacancy rates with their SA rental homes. Sitting vacant for months despite low rents. I haven’t had that issue because of the location I’m in, but others are struggling in other areas.

    Hope that helps!

     There are certainly parts of SA that are a lot tougher to rent than others, but there are also plenty of places that rent quickly. Just like in any other market, you really have to know where to look, and  be quick to jump on the right deals when they come up. I think anyone complaining about the speed of renting here has bought in a bad location or done a poor renovation. Plenty of people see "great deals" online, and don't realize that the rent to price ratio is so high, because of the difficulties in those areas.

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
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    0Reply
  • Camille Roland
    Specialist · Member since 2020 · 9 posts · 8 votes
    6y

    @Alice Huang, I too am bias to San Antonio. There are definitely certain parts of San Antonio that are tougher to rent than others. Just like any market we have pockets where different strategies work better. For example the eastside is a great hot spot, though you can still get good rents the taxes after rehab could get pricey. My buy and flip investors do great in this area, key is doing a good job on rehab so it dosen't sit on market too long. With buy and hold I notice the hot spots are geared toward the school districts, and accessibility. We have plenty of properties that are in the price range of under 200k in San Antonio. You will have no problem finding a property for your exit strategy.

    2Reply
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