All Forum Posts by: Kim Annello

Just my $.02.  About a year ago, we were in the same boat with approximately the same amount of money. After chasing what seemed like a hundred SFHs in a hot market (North Dallas suburbs -- where Toyota and everyone else appears to be moving), we found a small, older office/retail building in southwest Dallas. It's not the hottest area of DFW but it has a lot of potential.  (actually appraised for $100k more than we bought it for). We have 4 tenants and so far cash flow positive. We aren't making a ton of profit yet, but we are paying down the mortgage and there is room to increase our rents and vacant land that we can use for future development. In my estimation, commercial is far less a headache than residential. We would have needed to purchase a minimum of 2-3 houses to get the same net cash flow. But now we are dealing with one mortgage, one insurance policy, and only at risk of losing partial rent at any one time. So my advice is stick with commercial and look farther out from Austin. You can find something in your price range if you are patient and diligent about your numbers.

Welcome @Nick Walton. I just moved to Frisco last year. After spending 3 very frustrating months trying to purchase a SFH for rental purposes in the Frisco area, I switched gears to commercial property. Have a small office building in southwest Dallas (Cedar Hill). Frisco/Plano/Colony are very hot right now and prices reflect that. I've heard that Toyota is promising its employees who relocate a bonus if they stay in North Texas for 2 years. I am wondering if this is going to create a mini bubble in our area, with houses selling like crazy now and then a huge glut for sale in a few years. Do you have any thoughts on that?

@Wai Chan -- I'm in almost the same boat.  Have been looking at SFRs in Frisco (where I live), Little Elm, The Colony and McKinney for over 2 months. Probably looked at over 40 properties. Made offers on 3 houses (one I even offered on twice after their first deal went through). I am not offering all cash but I did offer over list more than once. Only got 1 and had to terminate because it was supposed to be fully rehabbed and it was not.  My agent says that there is just so little inventory under $200k here that everything goes in literally hours. And of course, everyone is hoping to cash in on the Toyota/LIberty Mutual influx.  I am extremely frustrated too. Might try a different part town til things settle down. If anyone has good advice on this areas, I'm all ears too.  

thank you all. Especially @Hattie Dizmond for the info about duplexes. I thought that was a Texas oddity. I'm making an offer on the house. We'll see how it goes. 

Hi all -- I'm hoping to get some input on two properties I am deciding between. Both are in a working class suburb north of Dallas (The Colony for you DFWers).  Here are the numbers and some information

Property #1 is a 3BD/2BA single family home with 2 car garage and decent size fenced yard that has been fully rehabbed. Very little work will need to be done. The rehab was high end: granite counters, travertine showers, stainless appliances, bamboo floors, new siding, foundation repair. It is near a middle school and close to the new Toyota HQ, and a large retail complex that will be completed next year. 

The sale price is $163,000

Anticipated rent is $1450/mo

Taxes $200/mo

Insurance $80/mo

Repair reserves $100/mo (just a guess on my part)

Property mgmt $160/mo (based on assumption of 12% of rent, but I will do myself so not a true expense)

Debt service (P&I) $670

Cash flow: $240/mo  (if I include a vacancy allowance, its about $120/mo)

Property #2 is a duplex. Each side is 2BD/2BA with a small side yard. No garage, just 2 spots on a parking pad for each side. Same high end upgrades. It is on a street with other similar duplexes near a playground. It is a little farther from the new office/retail development than property one, but in a slightly quieter neighborhood.

The sale price is $230,000 ($115k per side -- apparently duplexes are separately deeded here in Texas so I'll have two mortgages)

Anticipated rent $2200 (one side allegedly already rented at $1200/mo, I'm being conservative by assuming $1000/mo for the other side)

Taxes $260/mo

Insurance $167/mo

Repair reserve $125/mo

Property mgmt $240/mo (same as above, I will handle myself)

Debt service (P&I) $946/mo

Cash flow: $460/mo (same caveat for vacancy allowance)

My initial thought is to go for the duplex because its more cash flow and slightly less risk that you would be without both tenants at once. But I think the cash flow on the SFH is acceptable and appreciation might be better. My hsuband is concerned about the duplex not having a garage and wondering who would rent a duplex if they could get a 2BD apt with more amenities for the same price. These are valid points. BP experts, what say you?

Thanks in advance!

yes Drew it would be great to meet. I will email you 

is anyone here familiar or affiliated withGlobal Realty or GRC? I've come across several of their rehabs in my search for an SFH investment. Most of them are in The Colony/Little Elm area. Would love to know if anyone had worked with them before.

Welcome all Frisco-ites (is that what we are called?) Are you referring to the REIA Dallas group that has a meeting on March 12 near the Galleria? Looks like there are two women that run the group? Is there another REIA group specific to Frisco/Plano? If so, I'd love to join.

Howdy BP -- I am new to this site as well as the north Dallas suburbs (Frisco) where I now live.  After spending 15+ years in downtown Chicago, my husband and I moved to TX, in part for better real estate investment opportunities. I have practiced law for 15+ years and am ready for a new challenge. I am most interested in commercial investment (I represent REITs and developers in my law practice, so know a little about how those properties work), but since I will be doing this part time (at first), residential investment seems like a good place to start to learn the process and generate more seed money.  I'm hoping 2015 will be the year I begin a new chapter in my professional life. I would love to exchange ideas with anyone who is also investing along the DNT or elsewhere. Best of luck to all of you this year and beyond.