Rental Properties in Texas

[Justin Webb]

Good Evening Texas Investors,

I am curious as to the strategies some of you may use to generate a positive cash flow with your single family rental properties in Texas. It may just be specific to El Paso, but every time I run basic calculations, I typically come up $150-$300 short in monthly cash flow. The only strategy I've noticed working is financing the property for only 40% of its value then paying the rest with your own cash. The culprit is property taxes being close to 2.86%. The same house renting for the same amount and same expenses (P&I, Insurance, HOA, property management fee, maintenance, and reserves) however, has a lower tax rate 5 miles west in Santa Teresa, New Mexico cash flows $100-$200.

Maybe the best strategy is to not invest in SFR and leverage MFRs since the tax can be spread out across multiple units. Any thoughts?