Originally posted by @Rohan Gangar:
Hi Aaron, so what should I aim for in Texas? I live in the DFW metroplex and was looking to find a cashflow deal!
Hi Rohan,
I live in DFW too. As you've noticed, the 1% rule doesn't work here. (I think due to property taxes versus state income tax and DFW's low inventory.)
I typically count on cash-flowing $200-$300 a month. It's tight when you only own one property but as you accumulate properties and rents gradually increase, it gets easier. (But, & I stress, You MUST HAVE Back-up Funds to carry you through!)
My nutshell history... My first deal was 10 years ago. I paid cash, rehabbed & rented it. I refinanced it about a year in, getting back most of my cash and cash-flowing roughly $200 a month. I bought another property. Sold it for a profit, then another. (I flip houses on the side until I build up enough to purchase another rental property.) Then I bought my 2nd rental…
That 1st house’s rent slowly increased so it’s now cash-flowing about $670 a month but, it also has $130,000 equity from appreciation! BTW, I need to cash-out refinance it again and use that money to buy another property.
By flipping, then re-investing in long-term holds, I now own 4 single family lease properties (w/ handsome equity) & a duplex on top of my personal residence.