All Forum Posts by: Rohan Gangar

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.

@Rohan Gangar I'm not as familiar with DFW as I am with central and eastern TX so I can't say with much confidence what is achievable up there. 1% can sometimes be a reasonable target in TX, but it doesn't create as much cash flow as it does in other areas due to property tax.

Rohan 

May I suggest a different course? 

If you think of a real estate investment as a business, the tenant is your customer and the house/property is the shop. 

Instead of focusing so much on the shop, focus on your customer. What type of Tenant do you want as your customer? Take it one step further: what do those Tenant look for in a property: location, amenities? Last question, are there properties in those locations that you could purchase at a reasonable price/rent ratio and the property could be stable and produce some reasonable level of cash flow? Buy that property. 

Remember one thing: Cashflow is a nice dividend. But fortunes in real estate aren’t made from cash flow but rather from capital appreciation through forced and natural ways. 

Hope this is helpful for you 

Your best chance for immediate ROI in the current market is a house hack. Of course, there are opportunities in class C/D properties. Those properties require more time and management. There is also a greater risk of vacancy due to the income levels of potential tenants. Sorry if this isn't what you are looking for. Hope you find it helpful.