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NOTALENT
03-27-2007, 11:36 AM
Im getting prequalified right now on a few properties I came across.....if all goes well im flying out in 2 weeks to check them out and get to the fun stuff.....
They are all brand new houses in the Dallas/Ft Worth and Houston areas. The main one im looking at already has a tenant lined up willing to lease it for 2 years @1350 a month and a $2000 Deposit. Monthly payments with the property tax and insurance comes to be about $900 a month...Than 8% for property management. The propertys will be finished in a matter of weeks, and are selling for 15k under market value (discounted). So I will walk into that equity when purchased.
The other is pretty much the same deal, but Section 8 certified and the they can have a section 8 renter in there when its done. I felt kinda sketchy about that though. I know your guaranteed the money from state, but im kinda worried about the people abusing the place.
Anyone have any tips for section 8 renters, Texas rental properties etc....Im trying to get as much info as I can from many different sources before I sign away for my first SOLO property.
Thanks

MBlaster
03-27-2007, 11:57 AM
My buddy is moving to Ft Worth.
They are keeping their house in LA too.
Damn I can't believe how high property taxes are in Tx.

cdog
03-27-2007, 11:59 AM
Be patient grasshopper. San Diego will be ready by the end of the year. Texas is to far away and property taxes will kill you.

C-2
03-27-2007, 12:20 PM
Do not follow in this guy's path.
I haven't checked out his site in w ahile, but he had a property in Texas grenade on him.
http://www.iamfacingforeclosure.com/78/dallas-house-now-an-reo/
I feel bad for this kid, maybe it's the books and courses he is skipping which are killing him, cuz he doesn't seem to know how things work in the real world:
Casey: What about the Notice of Trustee’s Sale and the Trustee’s Sale itself? Will that somehow show up on our credit?”
Lender: No, it will just be in the public records. It will not be on your credit.
Duh. And the property taxes...those will just pay for themselves, don't worry about it.

Donttreadonme
03-27-2007, 12:20 PM
Do your homework! If it looks to good to be true, why aren't the locals jumping in? You must be putting down a hefty amount to get those numbers...

al cole'holic
03-27-2007, 12:27 PM
...good job NOTALENT, at least you are being smart enough to buy something! :D
Personally I'd take the 2 year lease deal..if it doesn't work out in a year or so and you get out, it will have cost you nothing!

uvindex
03-27-2007, 12:28 PM
The main one im looking at already has a tenant lined up willing to lease it for 2 years @1350 a month and a $2000 Deposit. Nice that there's somebody willing to sign a two-year lease (isn't that kind of unusual for a rental home?) Don't forget, however, that if he walks away you'll burn through that $2K deposit pretty quick then you're stuck suing a guy all the way in Texas (not cheap and no guarantee of collecting anything anyway). Don't forget that you might be paying the mortgage, taxes, and insurance for a while in that case. :) Good luck!

abraman1326
03-27-2007, 01:06 PM
We have a guy here in our office who does a lot of TX properties. I think he's bought somewhere in the 200 range between himself and investors. It's pretty incredible. He has the builders sending him their last few properties at greatly discounted prices, and everyone is making out very well. If you'd like to talk to him about how and what he's doing out there, drop me a PM, and I'll send you our office # and his name. To me, it looks like it's a pretty great market in the Dallas Ft. Worth area, and I know they are all making really good $$ on them. Good luck...
BRA

NOTALENT
03-27-2007, 01:18 PM
We have a guy here in our office who does a lot of TX properties. I think he's bought somewhere in the 200 range between himself and investors. It's pretty incredible. He has the builders sending him their last few properties at greatly discounted prices, and everyone is making out very well. If you'd like to talk to him about how and what he's doing out there, drop me a PM, and I'll send you our office # and his name. To me, it looks like it's a pretty great market in the Dallas Ft. Worth area, and I know they are all making really good $$ on them. Good luck...
BRA
Thats exactly what this is. Im kinda getting spooked on this whole tax thing, I got to look into it a little more. I dont plan on selling it or using the equity on it. Just more resarch.
PM SENT

Ziggy
03-27-2007, 01:21 PM
Someone has been watching Eric Estrada Infomercials:)

abraman1326
03-27-2007, 01:39 PM
Pm sent back. Good luck. I know himself as well as his investors have been doing very well with it. Good luck. If I had some extra cash, I'd jump on it...
BRA

Ivan Dan
03-27-2007, 04:40 PM
Thats exactly what this is. Im kinda getting spooked on this whole tax thing, I got to look into it a little more. I dont plan on selling it or using the equity on it. Just more resarch.
PM SENT
Brandon~ As others have mentioned the property tax is the main problem with buying TX. When we looked early last year the property tax rates were anywhere from 3.5-5% of the sales price. Here in So Cal I would say the average is right around 1.25-1.4% and obviously higher in some areas and lower in others. The reason they charge such high property tax is they don't have a state income tax but they make up for it by charging higher prop. tax rates.
I know some people that have bought quite a bit of property in TX and done fairly well with it. Being that far away though makes it hard for me to justify the risk of it. I had a relatively bad experience with my rental I owned in Apple Valley which was only 75 miles away but far enough away to prevent me from just "dropping" by to make sure everything was ok. I also got burned by what seemed to be a legit Property Management company up there. Whenever I end up buying another investment property again I would prefer it to be within 30 miles or so of where I'm living. Either way I would do a ton of research and background investigation on the Management Company you hire to look after the place for you being that its 1500 miles away.
How much are you planning to put down on the property and what is the sales price?

KREGER
03-27-2007, 05:23 PM
Dont worry all renters will not treat the house the way you would. With that in mind, you will not be dissapointed. The benifits out weigh the maintence you have to put up with.
Since the Tax rates are all over the grid. I would look for lower tax areas. If you are at a positive cash flow, who cares what the tax rate is....:D

boatnam2
03-27-2007, 05:26 PM
working with quite a few guys who already did what your doing a year or so ago.Has worked for a few and flopped for a few.the one doing good bought 4 plexs in towns like college staion.One guy flew down checked out his 2 places said they were very nice brand new, now a year later his section 8 people are moving out saying the neighbor hood has went to hell.

DCBob
03-27-2007, 05:31 PM
Section 8.....Not so fun...can be a real eye opener....Good Luck

YeLLowBoaT
03-27-2007, 05:35 PM
If it seems to good to be true, it normally is. I mean lets face it... who would rent a house for 1350 when thier payment would only be 900 a month. Something is not right there...

al cole'holic
03-27-2007, 06:13 PM
If it seems to good to be true, it normally is. I mean lets face it... who would rent a house for 1350 when thier payment would only be 900 a month. Something is not right there...
..had this same conversation with a client a few hours ago...there are way too many factors involved in that question. There are life renters, credit issues, etc...waiters, waitresses, non professional industry people, under the table workers, the list is never ending. Hell I had a GM that had been renting for 20 years :eek:
There will always be tons of people renting, tons of people using Public Storage, tons of potential :D

NOTALENT
03-27-2007, 06:36 PM
Brandon~ As others have mentioned the property tax is the main problem with buying TX. When we looked early last year the property tax rates were anywhere from 3.5-5% of the sales price. Here in So Cal I would say the average is right around 1.25-1.4% and obviously higher in some areas and lower in others. The reason they charge such high property tax is they don't have a state income tax but they make up for it by charging higher prop. tax rates.
I know some people that have bought quite a bit of property in TX and done fairly well with it. Being that far away though makes it hard for me to justify the risk of it. I had a relatively bad experience with my rental I owned in Apple Valley which was only 75 miles away but far enough away to prevent me from just "dropping" by to make sure everything was ok. I also got burned by what seemed to be a legit Property Management company up there. Whenever I end up buying another investment property again I would prefer it to be within 30 miles or so of where I'm living. Either way I would do a ton of research and background investigation on the Management Company you hire to look after the place for you being that its 1500 miles away.
How much are you planning to put down on the property and what is the sales price?
Eeshh...The tax is high. I still need to work out all the numbers, but even with that and if a renter were to not be in it for a while, I can definatley still afford the monthly payments no problem. As for the distance, that was a concern at first, but the other half of my company is really close to the area and I can always send out a buddy to go check on it. Im waiting for all the figures to come across the board, but a 30year fixed would be the only way I go whether I put down money or not.
Thanks for all the input everyone...its definatley helping alot! These are all the concerns I need to be looking at and to weigh out before I do anything.

YeLLowBoaT
03-27-2007, 06:41 PM
we can figure out about what the loan payment will be if you tell us the ~ selling price.
Example 100k @ 10% is about 875 a month.

NOTALENT
03-27-2007, 06:55 PM
we can figure out about what the loan payment will be if you tell us the ~ selling price.
Example 100k @ 10% is about 875 a month.
Selling is 135k and the other is 115k. I was waiting for number with insurance, tax, property management etc...

YeLLowBoaT
03-27-2007, 07:01 PM
115k at 8 % its about 850 at 7% its about 770
( I can do loan payment calcs in my head... :) )

HM
03-27-2007, 07:02 PM
Marshal Reddick?

NOTALENT
03-27-2007, 07:05 PM
Marshal Reddick?
No, I believe his name is Ron Black, with Texas Investor Homes.
Or was that a joke...lol

HM
03-27-2007, 07:10 PM
No, I believe his name is Ron Black, with Texas Investor Homes.
Or was that a joke...lol
Not a joke....hard to believe, I know. :D
Marshal Reddick does a lot of new construction investor home sales. Texas is a big area. Also provides a management company.

Biglue
03-27-2007, 07:11 PM
My friend was carrying a second mortgage for his property in Texas too. His house out there was vacant for a year. You have to take that into consideration. Can you afford the note on that mortgage? BTW, my buddy was also enticed via the "tenant ready" deal you're hearing. Be careful.

NOTALENT
03-27-2007, 07:13 PM
Not a joke....hard to believe, I know. :D
Marshal Reddick does a lot of new construction investor home sales. Texas is a big area. Also provides a management company.
Hmmm....I may start looking for something similar in other states. Making my first real deal is scary...for this cost I dont feel bad as I would if I were paying 300k+ for a rental....

NOTALENT
03-27-2007, 07:14 PM
My friend was carrying a second mortgage for his property in Texas too. His house out there was vacant for a year. You have to take that into consideration. Can you afford the note on that mortgage? BTW, my buddy was also enticed via the "tenant ready" deal you're hearing. Be careful.
Any idea what company it was? The other thing was its by some big schools...College students always need a place, I would try to get foreign exchange students in there first though.

Biglue
03-27-2007, 07:20 PM
Any idea what company it was? The other thing was its by some big schools...College students always need a place, I would try to get foreign exchange students in there first though.
I don't know what company he was dealing with. His bro in law brought this investment idea through some contacts he had. It actually became a huge deal that divided him and his wife's family. Perhaps there's legit deals out there but my buddy was clearly misled.

GOTTBoat
03-27-2007, 07:54 PM
"lease it for 2 years @1350 a month and a $2000 Deposit. Monthly payments with the property tax and insurance comes to be about $900 a month...Than 8% for property management."
I would do a road trip and look around at rentals in the area and verify, just does not sound corerect.
I have a couple of friends originally from SoCal and moved out there years ago (Plano, Richardson & Allen) for work (NorTel) and they still don't have much in the way of equity when you compare it to here. Property taxes are high but you don't have state taxes if I remember correctly, but that only helps if you are a resident.

locogringo
03-27-2007, 08:23 PM
NOTalent;
Be careful about how you classify your wording. Leasing or lease options are now illegal in TX though there are still ways (legally) around that.
Good luck with the rent. Depending on the areas you are looking at, you may find some surprises from not so great tenants.
TX is a fairly good area though but not the best. You should do fine.
Later;
LOCo

totenhosen
03-27-2007, 08:53 PM
Problem I have seen in deals like this is that you get someone who pumps in a straw man renter making the numbers look better than they actually are. Or a guy that says he'll do it for two years but after the 1st month is nothing but a pain in the ass. Have you done any due diligence on this guy yet?
I also believe Texas limits you as to what you can do as far as Heloc's and taking money out of your property which is another significant downside.

MBlaster
03-27-2007, 09:01 PM
Selling is 135k and the other is 115k. I was waiting for number with insurance, tax, property management etc...
I know Tx is cheap but those places must be in the hood.
Be VERY careful bro.

boatnam2
03-27-2007, 09:11 PM
tax is houston is very high 3.5 or so and insurance will run you 800 or more.figure 10%percent to manage.

Focker
03-27-2007, 09:29 PM
Texas Has No Income Taxes Thus Property Taxes Are High
Section 8 Depends As Any Other Renter. Integrity
Good Luck

C-2
03-27-2007, 09:50 PM
You can get around those taxes if you build a 3-acre pond in front.
Fawk it, have a rental and open a water park....or a bathing hole....wait, put up one of those African watering hole cams.....or the new Lake X....double the rent, waterfront property.....oh my, with the pond the sky is the limit....
Just trying to help :D :D

framer1
03-28-2007, 04:34 AM
Owned an apartment building in Garland (next to Dallas) way to many problems. High property taxes because they don't have state income taxes which doesn't do you a bit of good. High house ins. because of hail storms. Way to far away. Property manager didn't give a $hit. Section 8 people are usually a problem not always but usually. Not my wisest decision, I took a loss on building and was happy just to be done with it. Either way good luck.

R.A.D.man
03-28-2007, 05:16 AM
Can you say where it is in Dallas? I grew up there and go back to see family often. Maybe I can offer an opinion of the area you are looking at in general.

NOTALENT
03-28-2007, 05:22 AM
Can you say where it is in Dallas? I grew up there and go back to see family often. Maybe I can offer an opinion of the area you are looking at in general.
North Houston- Humble and & Spring county???

R.A.D.man
03-28-2007, 05:50 AM
Ohhh. I was thinking Dallas. I know nothing of the Houston area.

NOTALENT
03-28-2007, 05:55 AM
Ohhh. I was thinking Dallas. I know nothing of the Houston area.
I was more focused on the Houston areas....Here is the google map to the Dallas ones...
http://maps.google.com/maps?f=q&hl=en&q=6115+Challedon+Ln,+Dallas,+Texas+75211&sll=37.0625,-95.677068&sspn=50.823846,82.265625&ie=UTF8&om=1&z=12&ll=32.754942,-97.016487&spn=0.212795,0.43396&iwloc=addr

ChumpChange
03-28-2007, 06:46 AM
I wouldn't do it. The problem with Texas is it is drawing investors in with hopes of great cash flow with no money down. There are a lot of speculations there right now on where the market is going. Once you get into the Texas market, you can't get out. Although rental rates are good(now), appreciation is at a standstill. When you want to sell the house, you will have to pay to get out. Not because your of your loan balance but remember all the fees that go into selling a house. If there is no appreciation, agent fees come directly out of your pocket.
There are plenty of good deals coming to SoCal soon. Why invest in a property that's too far to manage yourself.
Trust me, in my business, I have seen a lot of nonprofessionals think they have found a good thing only get shafted by the people who know what they are doing.

boatnam2
03-28-2007, 10:16 AM
guy at work just got back yesterday,didnt even know he went to look at property until this morning before going home from work i talked to him.he said in houston area the forclosures are through the roof.the home builders are doing all kinds of stuff to sell there over saturated amount of homes built.bottom line it is texas and there is more property to build on then cows.

hava life
03-29-2007, 09:45 AM
http://www.realtytrac.com/
Try this link it may give you a better variety to choose from. Be careful Texas last month was the third highest for foreclosures in the month of February with 12,386. I do not see the loan issue being over in my opinion. I still beleive the real good deals will be coming in a few months. But what do I know I have missed plenty of good deals in the past.

C-2
03-29-2007, 10:20 AM
But what do I know I have missed plenty of good deals in the past.
Yeah, really.
How many of us have listened to grandpappy, telling us to buy, buy, buy - cuz what's expensive now, will be cheap tomorrow. I guess no time is ever a good time as far taking the plunge and a risk, and maybe taking on more than we can afford as a future investment.
For the record, I missed the tech rally, the day trading crazy; should have been a mortgage broker or real estate broker over the past five years....what will be the next big money maker?
I've already accepted the reailty that what I do for a living is not gonna make me fabulously wealthy!:mad: