DALLAS FT WORTH REAL ESTATE INVESTMENT PROPERTIES

[Christy Greene]

I WILL BE FLYING TO DALLAS TO LOOK AT SOME PROPERTIES TO INVEST IN.  I AM WORKING WITH A TURNKEY REAL ESTATE INVESTMENT GROUP.  THE AREAS THEY ARE FOCUSING ON ARE IN DALLAS, FT WORTH , ARLINGTON AND EVERYTHING IN BETWEEN.  THE PROPERTY PRICES ARE HIGHER AND GOING UP FAST.  THEY ARE RANGING FROM 130-200K.  RENTS ARE IN THE RANGE OF 1300-1700.  I KNOW PROPERTY TAXES CAN BE HIGH.  CAN SOMEONE ADVISE ME IN THE AREAS TO LOOK FOR AND WHAT AREAS TO AVOID?  THANK YOU.

[Andrew Herrig]

@Christy Greene Yes, taxes are high here in DFW. Historically the tax appraised value lagged the market value, but it has almost caught up. Taxes on some of my rental properties have gone up 30-50% over the last 2 years. Expect to pay around 2.7% of the property value in taxes every year (so $225 per month on a $100k property). If that property meets the 1% rule and rents for $1000 per month, that means taxes are costing you over 20% of gross rents. It gets hard to meet the 50% rule when taxes eat up such a large chunk.

That said, for cash flow I would focus on first ring suburbs such as Garland and Mesquite. Arlington is good too, and generally Tarrant County will have better cash flow than Dallas County, but less chance for appreciation. Be careful of the neighborhoods you are buying in from a turnkey operator - I have seen a lot of overpriced turnkey properties in neighborhoods I wouldn't touch because out of state buyers don't know any better and they "cash flow" (at least until the first eviction).

As far as cash flowing properties near Frisco, don't waste your time looking - it's not going to happen. If you go further out toward Little Elm / The Colony you might be able to find something.