All Forum Posts by: Calvin Clark

Hello BP community!

My fiancé and I just got our first offer accepted for a four-plex in Dallas and are looking for some advice on our analysis before our option period ends. 

The property is comprised of four 2b/1ba units in the South Dallas-Fair Park neighborhood and is right across the street from a large industrial plant. The building has a parking lot with no cover and a brand new 30-year roof. It's currently fully leased at $600/unit. 

Asking Price: $200,000

Gross Rents (4 units): $2400 per month

Expenses:
Taxes: $350/mo
Insurance: ~$200 (haven't gotten a quote yet)
Vacancy (5%): $120 
Repairs (7%): $168
Capex (6%): $144
PM (10%): $240

Total: - $1,222

Mortgage: - $787 (conventional with 20% down and fixed 4.25%)

NOI: $2400 - 1222 = $1178

Cash Flow: $1178 - 787 = $391 per month (10% CoC ROI)

We feel like this is a pretty good deal based on our numbers, but want to see if we are missing anything? We would also like to hear from anyone that has experience with this type of investment in this area of Dallas. 

Thanks all!

@Todd Plambeck Thanks for insight. We actually haven't shopped around for insurance yet. What type of numbers have you been working with here in Dallas? The foundation & roof are both in good condition and the property was built in 1984. We met a property manager from Dallas Luxury Realty who quoted us a $75 flat fee. We're also waiting for a quote from One Prop property management. What percentage for PM is more realistic?

Thanks again!

Hello BP Community,

My fiance and I are looking to buy our first investment property in Dallas, TX (specifically Carrollton). We found a nice SFR that is practically the same house as every other one on the block (should be easy to rent) and has already been renovated. We ran some numbers and want to get some feedback on whether or not this looks like a good deal:

Details

• 3B/2Ba, 1,324 sq. ft. 
• PP: $172,000
• Potential Rent: $1500 - $1700
• Property Tax: $2955/yr
• No HOA

Assumptions

• 5% Vacancy Rate
• 1% Cap-Ex
• 1% Repairs
• $75/mo insurance (not in a flood zone)
• $75/mo prop. mgmt. 

We are basing the property management on discussions with 2 local companies. If you think we think we are off on any of our assumptions, we would love the feedback!

@Ludmila Hill Hey neighbor! I'm no expert in choosing cities good for investing, but I had read a few articles that named Dallas/Forth Worth as good investment area with solid population growth, rental markets, and new business with Toyota, State Farm, & Liberty Mutual. I'm sure there are even better markets out there, but being in Socal, we wanted a city that would be relatively affordable to fly to when necessary. Are you doing any out-of-state investing?

@Jonathan W. We are going to see about 8 houses this weekend with a couple brokers in these areas: The Colony, Lewisville, & Frisco. Do you have any insight on areas that might be hot investment territories?

@Varma Adduri, How was the closing process with the bigger banks? Did you have any trouble? We are working with a local lender right now and received the pre-approval letter in order to be more competitive with potential cash buyers. I'm fairly certain the interest rates will be lower with a bigger bank like Wells, but I am trying to understand the benefit of working with a local lender. Better knowledge of the area? In house underwriting?

Hello BP Community!

I'm taking the dive and looking to purchase my very first investment property out of state in Dallas-Fort Worth area (I currently live in Los Angeles). So far I have some good contacts with realtors and property managers and will be flying out to look at some houses this weekend. 

What is the best way to find a lender for a first time investor that is not local? I've done some searching online through Yelp and have one recommendation from a real estate broker I am working with. Any advice on what has worked for others will really help! Thanks all!

@Tom Ott yeah, trying to buy/invest anywhere in Southern California just doesn't make sense for us-at least for our first deal. We would have to buy a property that's at least 3 or 4 times as expensive as something in Dallas area just to hopefully get the same cash flow numbers. We have a better chance of stretching our investment cash in other parts of the country. 

What other cities have you been seeing as good rental markets? We're specifically looking into the Frisco, TX after some conversations with local RE brokers. 

@Mark Shuter We're looking to buy a SFR in the DFW area that we can buy and hold. Really just looking to get our feet wet with out-of-state investing. Thanks for the reply, and i'll let you know if when we start looking for a primary residence in So Cal!

Greeting BP community!

My name is Calvin Clark, and i'm an Electrical Engineer originally from the tiny island of Guam. I moved to Los Angeles in 2007 to finish my degree and now work for the local power company in beautiful downtown Burbank, CA (home of Jay Leno's 3-hangar car collection). 

I've been listening to the BP podcast for almost a year now and i'm finally diving into the forums to connect with other community members. My fiancée, Adriana, and I have been doing all kinds of research on how to get started, and we decided investing out of state would be our first goal. California is just not feasible for us right now. We're excited to say that we are getting prepared to make our first deal in Dallas, TX in the next couple months. We're heading out to visit and absorb the city, meet with some potential property managers, contractors, and brokers that will form our team for the future. It's a little nerve racking, but we know there's no better education than just getting started. 

We hope to reach our freedom number as soon as possible as we want to have as much time as possible to raise our children one day. The website and community has definitely given us the courage and resources to push us to get going. We've never learned so much, so quickly about real estate from any other source, so thank you Bigger Pockets!