Hi folks, I just wanted to get some general feedback on areas to focus on(in general and in relation to the fact that I’m in TX). I am going to join some local clubs which I think will give me some more info on these related questions.
How can I determine if a neighborhood or area in a particular city is good for investing? Obviously, you can determine cash flow which will tell you if something is positive or negative, but it seems to me so far in my searching that if a property is in a decent area the price that property is listed at is way to high to get a positive cash flow. I’ve been targeting mostly MFH’s in all of the Dallas/Ft.Worth area. The only “cheap or bargain” MFH’s I see are all in rundown crack neighborhoods. I just don’t want to deal w/these kinds of areas/tenants (at least not until I’m experienced). I have seen a bunch of “average” condos in the N.Dallas area for good prices, but there area always alot of them for sale and they stay on the market for awhile which makes me think a.) there is something wrong OR b.) it is hard to find tenants…?
I guess I’m just having trouble trying to find the area I want to start out in…I’m not sure if I should start w/20k condos or what. I would actually prefer to open my properties in/near Plano/Richardson/Wylie area since I’m actually in Plano, BUT everything sales for way more than “20k condos” and cash flows seems to be negative on properties I see in these areas…
Is there some way you guys are using to determine the ratio of investers vs. owners in a particular area or how to determine what rents go for in an area? To determine what rents go for in an area, I’ve been looking at what properties are sold for in the area, at what rent goes for (realtor.com, craigslist, etc…) Any thoughts specific to the DFW region or just on picking an area in general for a newb?
Bilal
Sorry, forgot to mention that I’m starting out with rentals…
Ballgum,
In every area, the majority of properties sell at or near retail. It takes a lot of work to find properties for sale at a big discount. What have you done to find properties at a BIG discount that will cashflow?
I would look for rentals in lower middle class to lower class neighborhoods which contain a lot of other rentals. All inner city neighborhoods have drug problems. I would not buy in areas where bullets are regularly flying.
Mike
Hi Mike,
Thanks for the reply. Looking at lower-middle class areas seems like the best way to get started. The prices on the properties seem quite a bit cheaper, but rents aren’t that much lower than in higher priced areas.
As far as looking for property, I’ve mostly been browsing realtor.com, getting foreclosure and MFH listings from a realtor.
Does anyone have experience w/the condos in the Dallas area? These seem like a good way to get started and they seem cheap enough to buy (20-40k). It also seems that if they were creating positive cash flow for people, then there wouldn’t be so many of them in the same areas on the market??
Thanks,
Bilal
most of the stuff on realtor.com are crap deals.
moreover, I’m not a big fan of condos as rentals as the condo fee are a real kick in the teeth when it comes to cash flow. additional they are subject to change without your control. If the fees are low, then you are likely to get hit with a big assessment in the future when the association fails to have enough reserves.
And sometimes painfully outdated…
Any sites you guys can recommend? I’m currently also using a realtor, but I don’t want to hassle him everytime I want to run a search for something…
Thanks!
I would recommend getting away from the computer and getting outside the house to meet people and find deals. I have never done a single deal as a result of the internet. You’ll have a very difficult time finding deals the way you are doing it.
Mike
Thanks Mike! I took your advice today…First I was able to visit my first REI club meeting (which was indeed QUITE helpful…). After the meeting I came to a few realizations. One - there is a lot I need to learn… 
Two - I want to also do flips when I find a good deal (there were several people in the meeting that were new investors that have made quite a bit of profit off there first deals doing flipping).
I spent about 30 minutes driving around this morning looking at properties close to where I live. I found 1 property that looked “obvious” in my eyes as a possible deal. There were signs on the house from the city that the grass/weeds were to tall so it appeared like the house is either abandoned or very neglected. I looked up the house on the appraisal site for the county and found the owners, HOWEVER I’m not finding the owners listed off of anything obvious like anywho.com…Any suggestions to getting their contact information?
I also visiting a lawyer today to talk about setting up the LLC, etc…His fee is $225/hour and he said for the first LLC it would cost about $1400 (which also includes a Q &A session from me and setting up the LLC from scratch tailored to my needs). He said any additional LLC’s I setup after the first would be closer to $7-800. Is his initial LLC setup fee to expensive?? I think overall he would be a great lawyer and I was referred to him by a very credible lawyer friend of mine…One thing that threw me off about what he said though is that you can’t or shouldn’t buy a property in your own name and then transfer the property to the newly aquired LLC??? Unless I’m reading things wrong, I’ve seen this all of the forums, but the lawyer is telling me that it either can’t be done or isn’t advisable. He is saying I should buy the property under my LLC name, and if need be use my personal information to cosign?
Thanks,
Bilal