I was fortunate enough to be contacted by a gentleman last October regarding investing in the Dallas/Fort Worth area. He said that he was an editor of a magazine called "Personal Real Estate Investor Magazine" and he was looking for real estate agents who dealt with investors in Dallas and found my name on the internet. He asked if I would mind doing an interview and being cited as a local expert. Yeah, like I was going to turn that down!
So a couple of weeks ago, I received a copy of the magazine in the mail. I figured if I could share my thoughts on Dallas real estate investing with a magazine, I should share them here as well. Here is the run down:
The Dallas real estate market is strong. Back 3 years ago, you could pretty easily find 15-20% returns on investment with rental properties. Today, those returns on investment are not readily available. Today, you will be doing a good job getting a 10% return on investment. If you are looking for newer properties only, expect closer to a 6-8% return. Rookie Dallas real estate investors keep looking for those 15-20% returns and are getting left in the dust. If the numbers work, an experienced investor is jumping at it.
Dallas real estate investment properties do NOT last long on the market if they are priced right. If you wait 3 days to go see a property, chances are it is already under contract. If you are serious about real estate investing, understand that you need to make the time to go see a property TODAY and put in your offer TODAY.
Multiple Offers are no longer a thing of the past. If a home is priced right for its condition, it will get multiple offers and probably sell over list price. This holds true for both investment properties as well as regular homes. Buyers are out there, and they are buying. If your home is not selling, it is 100% because it is not priced right for the condition and location.
Flipping is back. The biggest opportunity right now in Dallas real estate investing is flipping. If you can find a good distressed home and have the funds to fix it up to tip-top shape, you can sell it. I've worked with flippers who pay cash (at a nice discount of course) for a home that has been listed for 6+ months for $200,000. They will get it for $175k or so as is. They put $25k in cash into fixing up the home and upgrading it, and relist it for $250k and it will sell in weeks if not days. Buyers are out there - but the buyers want a home that is MOVE IN READY. If it is not move in ready, most buyers aren't looking at it.
Owner Financing is HUGE right now. Dallas real estate investors who are willing to owner finance are making big returns - and charging big interest rates. People with less than perfect credit still want to own. Many of them even have a big down payment that they can put down. If you can afford to tie up some capital for a period, owner financing can increase your ROI significantly.
I had never heard of this magazine in the past, but after reading it I was really impressed. It is available in places like Barns and Nobel and other major news stands. The Dallas article is on pages 46-52. I have already gotten calls from several investors who are interested in the Dallas area. In fact, tomorrow I'm meeting with a hedge fund group who is looking to put some money into this market and found me through the magazine. Pretty cool!
I'm always curious about how Dallas compares with other cities. With the local real estate market on the upswing, I would think that real estate investing would be more profitable in other areas instead of Dallas but apparently I'm wrong. What is the investment market like in your area? Are there a lot of real estate investors transacting or are they waiting for a better time?