All Forum Posts by: Kent Ford

Quote from @Ryan Kelly:

@Kent Ford Austin got hit by a combination of factors, but only because it was also the highest appreciating market nationally during 2020-2022. Austin nearly doubled in median home value in 24 months. As you stated, that leads to higher property taxes and higher homeowners insurance as well, and when combined with higher property values and a 150% climb in interest rates, it compounds affordability issues. There are some positive signs on the horizon. The home values have given back approximately 50% of their COVID highs from where we started in Jan 2020. On top of that, demand isn't really the problem, it's simply new supply having to get absorbed. Austin is still in the top 3 markets for apartment absorption rate, it's just that we added 60,000 new units in 2 years, so it will take a few years to get the supply and demand balance in check. It's not a cheap market anymore, but still has some strong business and population growth tailwinds.

That’s a great point! Austin’s explosive growth and rapid appreciation certainly created unique challenges, but it’s interesting to see the city still holding strong on demand, especially with so much new supply. With business and population growth continuing, do you think Austin might stabilize into a more balanced market, or could we expect another surge once this supply is absorbed?

Quote from @Jay Hinrichs:

Quote from @Kent Ford:

Quote from @Joe S.:

Quote from @Kent Ford:

Texas is seeing a surge in new real estate businesses due to its booming population and investor-friendly climate. What do you think makes Texas such an attractive place for entrepreneurs in the real estate space? Is it the lack of state income tax, affordability, or something else?

 That was more of a leading statement. Are you looking to convince people that Texas is great are you looking to convince yourself?

Don’t forget the exceptionally high property taxes.

I see where you’re coming from, and the property taxes are definitely something to factor in when considering Texas. It really depends on what you're prioritizing in your investments. For some, the potential growth and lack of state income tax might still outweigh the challenges, while for others, the high property taxes are a dealbreaker. What’s your main focus when you look at an investment market? Is it the overall tax structure or the growth potential?

I personlly dont care about prop tax's we flip everything within 6 to 9 months I am not a buy hold investor in that market nor am i looking to be one.  I like NV.

It sounds like you’re all about keeping things short-term and maximizing returns with each flip—property taxes aren’t a concern when the hold period is brief! Nevada’s a great market, too; have you found that flipping there aligns with your strategy as well?

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Texas offers a diverse real estate market, from the tech-heavy Austin area to the sprawling suburbs of Dallas and the oil-rich Houston market. How do you think choosing the right location in Texas impacts the success of a real estate business? Would you focus on booming urban areas, or do you think the suburbs and smaller towns have more potential?

Quote from @Jay Hinrichs:

Quote from @Kent Ford:

Quote from @Jay Hinrichs:

Quote from @Kent Ford:

Quote from @Jay Hinrichs:

the reasons you post.

tax's 

somewhat limited development regulations compared to other markets.

work force   also close to Mexico and all the folks streaming in that need housing.

building cost still lower than most of the country.

Land forever .. no shortage sprawl is not a bad word.

Political out look  conservative business friendly compared to West coast. 

It’s interesting how those factors shape the investment landscape in Texas. The lower building costs and more relaxed development regulations definitely seem like attractive reasons to keep investing, especially with the need for housing growing as people continue moving in. How do you see the long-term outlook for Texas real estate with all this sprawl and political support? Do you think the rising taxes might eventually become a bigger concern, or do you feel the benefits will continue to outweigh the costs?

jobs attract people.. people need housing.. if this is in balance then things work fine.
Austin seemed to grow like crazy with all the jobs.  but then i see where prices are falling in some areas of Austin .. maybe overbuilding ?

It’s interesting how job growth and housing demand tend to move hand in hand. Austin’s tech boom definitely brought a surge of people, but you’re right, it seems like supply may have outpaced demand in some spots. Do you think overbuilding is the main cause, or could the rising interest rates and overall cost of living in Austin be cooling things off as well?

probably all of the above.

It sounds like you’re weighing multiple factors, and that’s totally understandable. Real estate decisions, especially in a place like Texas, can involve a lot of moving parts. What’s the most important factor for you right now when considering investment opportunities? Would love to hear more about your thought process!

Quote from @Lucia Rushton:

@Kent Ford I am not sure you have that accurate. Texas is a non disclosure state with regards to the final sales price. We absolutely have a SDN which is a sellers disclosure notice that is required with SFH purchases.

You're absolutely right! Navigating real estate transactions in a non-disclosure state like Texas definitely comes with its unique challenges. Since final sales prices aren't publicly disclosed, it can make it trickier to gauge market trends or ensure fair pricing based solely on public data. However, tools like the Seller’s Disclosure Notice (SDN) help bridge the gap by ensuring transparency regarding the property’s condition, which is crucial for buyers.
Compared to disclosure states, transactions here rely more on relationships with agents, access to MLS data, and private appraisals to get a clearer picture of market value. It adds a layer of complexity but also reinforces the importance of local expertise.

Quote from @Joe S.:

Quote from @Kent Ford:

Texas is seeing a surge in new real estate businesses due to its booming population and investor-friendly climate. What do you think makes Texas such an attractive place for entrepreneurs in the real estate space? Is it the lack of state income tax, affordability, or something else?

 That was more of a leading statement. Are you looking to convince people that Texas is great are you looking to convince yourself?

Don’t forget the exceptionally high property taxes.

I see where you’re coming from, and the property taxes are definitely something to factor in when considering Texas. It really depends on what you're prioritizing in your investments. For some, the potential growth and lack of state income tax might still outweigh the challenges, while for others, the high property taxes are a dealbreaker. What’s your main focus when you look at an investment market? Is it the overall tax structure or the growth potential?

Quote from @Rick Albert:

Those are the reasons, although I wouldn't be surprised if that is short lived for the mom and pop investors.

I was exploring investing in Texas, but here are the problems I came across:

1. All that building that's happening means more supply which equals lower rents. I was analyzing a four plex and realized there are beautiful apartment complexes being built nearby. I can't compete with them except on price. 

2. Property taxes are wild. In California, it is capped at 2% per year. In Texas, it isn't and it could hurt your bottom line very fast. That was one of reasons why things started crashing in Austin. People couldn't afford the property taxes when they were going up so fast.

3. The no state income tax doesn't really apply when you are comparing to other investment locations. Because there are so many tax write offs, I would much rather invest in a state that has low state income tax and low property tax. The income tax may be written off anyways and I benefit from the lower property tax rate.

You bring up some solid points. The building boom certainly creates competition, especially when you’re up against newer complexes with more amenities. And those property taxes in Texas can be a real game-changer, especially without any cap, making it tough to predict long-term expenses. I also see where you’re coming from regarding the no state income tax—it can sound great, but when property taxes offset any savings, it loses appeal fast. Have you found other markets that seem to balance these concerns better?

Quote from @Jay Hinrichs:

Quote from @Kent Ford:

Quote from @Jay Hinrichs:

the reasons you post.

tax's 

somewhat limited development regulations compared to other markets.

work force   also close to Mexico and all the folks streaming in that need housing.

building cost still lower than most of the country.

Land forever .. no shortage sprawl is not a bad word.

Political out look  conservative business friendly compared to West coast. 

It’s interesting how those factors shape the investment landscape in Texas. The lower building costs and more relaxed development regulations definitely seem like attractive reasons to keep investing, especially with the need for housing growing as people continue moving in. How do you see the long-term outlook for Texas real estate with all this sprawl and political support? Do you think the rising taxes might eventually become a bigger concern, or do you feel the benefits will continue to outweigh the costs?

jobs attract people.. people need housing.. if this is in balance then things work fine.
Austin seemed to grow like crazy with all the jobs.  but then i see where prices are falling in some areas of Austin .. maybe overbuilding ?

It’s interesting how job growth and housing demand tend to move hand in hand. Austin’s tech boom definitely brought a surge of people, but you’re right, it seems like supply may have outpaced demand in some spots. Do you think overbuilding is the main cause, or could the rising interest rates and overall cost of living in Austin be cooling things off as well?

Quote from @Jay Hinrichs:

the reasons you post.

tax's 

somewhat limited development regulations compared to other markets.

work force   also close to Mexico and all the folks streaming in that need housing.

building cost still lower than most of the country.

Land forever .. no shortage sprawl is not a bad word.

Political out look  conservative business friendly compared to West coast. 

It’s interesting how those factors shape the investment landscape in Texas. The lower building costs and more relaxed development regulations definitely seem like attractive reasons to keep investing, especially with the need for housing growing as people continue moving in. How do you see the long-term outlook for Texas real estate with all this sprawl and political support? Do you think the rising taxes might eventually become a bigger concern, or do you feel the benefits will continue to outweigh the costs?