All Forum Posts by: Diego A.

Hi Luna,

Congrats on getting started. This is my two cents.

I am getting a similar situation with my new investors as well.

#1 Agents can provide you the houses based on your criteria, or you get some houses and share with them. At the end, you are making the decision, but you have to understand the time that an agent will take to run the number. In my case, per house and being in the industry for more than 7 years takes me at least 30min to run a good number per house. Killing them with a lot of properties will discourage them to work with you in the long run. Remember that the agent is a partner in this situation.

#2 Offers, this is a common situation for new investors that wants to go down to make the deal work. That is no how the market works. You have to understand what is your strategy in the short, middle, and long term. In DFW, I am seeing few cash on cash with a 7%, for SFH it is more likely a 2% to 4%. For flip deals, there is a average of 80% ARV, but it will all depend on where you would like to be and buy. When a situation where an investor still want to do an offer, I talk with the listing agent to understand if they are going to consider such an offer before submitting a formal one. As previously was said, it depends on many factors.

DFW has a lot of new investors that are getting crashed by wholesalers to enter in the business, so they are just making a little 10% or less in a deal. I just listen to biggerpocket episode 956, this is an extreme example, but it is what I am seeing here in DFW currently mainly with new investors that don't want to work with an agent.

To add to what @Bruce Lynn said, I was working a deal recently in Dallas and I found that there are many restrictions on renting by a room, mainly because you will become a hotel at some point (not sure about the restrictions) in my case I found that the subdivision had a restriction to rent one room. 

Make sure to do the due diligence for this.

Hi Brian,

Cash buyers in the current market is difficult. Mainly in the wholesaling. I have not found one opportunity yet that gives me an ARV of 75%.

Any professional investor will tell you that if you go over that the amount of work that you have to put doesn't worth the return.

My latest was found in the MLS where we got a better deal than what I was getting from wholesalers.

Let me clarify that the wholesaler business is needed, but it seems at the lack of deals they are putting the pressure to then investors. 

What I found recently was a couple that bought a deal with a wholesaler on which it was told that it will make an 80% ARV (with lack of knowledge they believe what the wholesaler told them)

After they completed the work they made a small 5% in the deal so they told me that the exit that business immediately.

They needed a partner or more training to understand how it works, but I feel that when you don't know, you don't know so people is getting advantage of that.

It is going to be difficult for them to agree if they see that the foreclosure will pay Fannie Mae and themselves.

How much is the UCC lien? Are they negotiating?

Investing in new builds is becoming challenging too. In my area around Flower Mound they are still allowing it but prices are high.

I know that new builders in the Fort Worth area are allowing it too, but most of them are.small builders and you need to dig in to find them.

In Texas i have seen 85% of properties with carpet in the bedroom. I am not sure you would lose tenants if you don't put them in. I feel that is a more efficient way mainly when they have mascots.

I haven't tried myself but you are giving me an idea for the next project in my rentals. It has got very difficult to clean the carpets so replacing them every time a tenant leaves is no cost efficient either.

I haven't done a complete rebuild, but I am working with a client so he can build in a land. The permit seems scary but it is not that hard, you just have to go to the city and talk with their permit department to figure out what all you need.

The contractor has to be registered in the city to be authorized to do the work.

Of course, there are going to be a lot of documentation and the city will need to inspect the process. This is in general done by the project manager handling the project. 

In my investments, I am doing the project management and my general contractor works with the team to complete the work, when we present the permits you have to be very well organized to make sure all paperwork is in place.

There are many factors to look at. Are those neighborhoods growing? What is the expansion plan from the city? How home values appreciated against other neighborhoods?

Then it is important to know what is your investment strategy, risk tolerance, and time that you are going to dedicate in the game.

The easy way is to wait the 2 years but this is all about cost benefits. How much you will profit from the sales? how much you will spend in Dallas to wait for it (rent)? Can you afford to buy a new house without selling the Chicago home?

I would say that I am seeing a good growth in Xplex in DFW now. Good places are Arlington and Fort Worth in my view.

Townhouses and condos are difficult beasts, I would prefer townhouses, I have some investors friends that they didn't want to go with a mantainance headache so they bought townhouses, but those are expensive and they are Long-term.

Condos are a bit old in DFW

However, all deals on that you would need to have an investor friendly realtor to help you with.