All Forum Posts by: Andrew Herrig

@Michael K. 1-4 unit multifamily is pretty rare in DFW. How flexible are you in where you are willing to locate within the DFW area? There are pockets where they are easier to find and the numbers at least sort of pencil out. You have a little more leeway with the numbers as a house hack rather than pure investment property.

@Jodi Tommerdahl Interest rate is low for an investment property. 

Insurance is probably too low. 

Property taxes are low - counties have been extremely aggressive raising property tax assessments. I would assume they will re-assess the property at the purchase price the year after you buy it. I think Tarrant County is around 2.8% tax rate, but you can verify with Tarrant CAD.

I would budget more for repairs/capex. Depends on the age and condition of the property, but realistically long term, between repairs and capex, you are looking at probably closer to 15%.

Management seems high, unless you are including the cost of finding/placing tenants as well. If so, good for you. Nobody ever seems to account for that cost.

@Account Closed Most of my properties are in Dallas County. Across the portfolio, my tax appraisals went up 25% for 2018. My worst property went up $2200/yr in property taxes - almost $200 a month. It seems we are reaching a cap on rents, there is no way I can raise rents $200 to offset tax increase.

I am starting to strategically sell of some of my portfolio and move the money into syndicated deals in better cash flow markets. When 25-30% of my gross rents are allocated to paying the property taxes, it just doesn't make sense to hold anymore.

@Daniel Hernandez If you want to find something like that on the MLS, I'd probably look south of I-30. Parts of South Dallas, Cedar Hill, Grand Prairie, Lancaster, etc. Good deals are hard to find these days, but you'd have a better chance off market through wholesalers or your own marketing.

@Daniel Hernandez What is your goal with the rental property? Cash flow? Appreciation? Have the tenants pay the mortgage and create a stream of income for retirement? Do you want it to be near your house? How much money do you have saved for a down payment? Are you willing to put in sweat equity if you find a house that needs work? Do you want to pay market price or get a good deal?

It's a little bit like if I asked you to help me find the best job. That's an extremely subjective question that depends on my skillset and values. Without knowing that it's hard to know where to start.

@Cameron Marmon I would not count on any appreciation on C or D condos. Personally I would probably not invest in them unless I owned a majority share of the complex and could control the HOA.

@Marta Frey Local banks are probably not the best place to start if you are looking for a conforming (Fannie Mae) loan. Unless you have 10+ conforming loans already, there's no reason you shouldn't be able to get a 30 year fixed rate loan at 70-75% LTV.

As @Bart H. suggested, I would start with a mortgage broker who works with investors. I've used one that operates out of New York but has funded loans for me in multiple states (none of them NY).

Are you familiar with the Dallas market? Where do you plan to live when you move here? Why not just wait and house hack?

@Grant D. Where did the pipe burst in the attic? Did the area you show in the picture get wet at some point? I can't really tell what's going on, but that looks like a very oddly shaped crack if it's from normal foundation movement. Wondering if the drywall or drywall tape under the paint got wet. Or if at some point someone textured over wallpaper and painted it.

Texas has expansive clay soil. It expands when it gets wet (like with all the rain we had over the last few weeks) and contracts when it dries. You're always going to have some movement. The last few weeks of rain has opened several cracks in my house and closed a few others.

As others have mentioned, being in the bathroom I would make sure you do not have a water line or sewer leak as that will exacerbate foundation movement.

All else being equal, I would trust the structural engineer over foundation companies. 

@Eric Kristt If you are looking exclusively at small multis (2-4 units), I would go elsewhere. There just was never much of that built in DFW and prices are high compared to cash flow.

I think Class A multifamily is going to be considered overbuilt here pretty soon, but that is not the market most people here on BP play in. Economic fundamentals in Dallas are good and jobs continue to grow. I think it's a great place to be invested long term, but it is certainly getting tough to find good deals at this point in the market cycle.