Dallas-Fort Worth Real Estate Investor Club

For sale.  This is my only dallas property and I can't get any economies of scale w my fort worth portolio, plus I've sank $25k into putting this property in top shape for my tenants long term lease.  Too much cash locked up in this property so it's time to sell.   Full price, no contingency offers only.  Leased at $2500/month, no HOA.  Tenant takes care of lawn.

http://u.zillow.com/p1nyGl

817.217.nine227 text preferred, thanks.  Pls mention you're an investor when contacting.  Thanks.

Example for newbie investors: 

$73k in cash down (25% of $290k)

Mortgage on $217k @4% (zillow mortgages has several who will do this if you have excellent credit)

Payment is $1035 + $500 taxes × $80 insurance = $1615 per month

$2500 in rent minus $1615 total payment = $885 net income per month or $10,620 per year

14.5% cash on cash return, add another 3-5% of net gain w the tax benefits depending on your situation

Justin,

There are lots of experienced investors on this forum, including myself.  I won't speak for others, but, in my case, I don't buy in Dallas, and I don't typically buy single-family houses above $200K.  I can be reached at 817-300-1132 if you'd like to chat more about this.

Thanks,

Robin 

  Hello Justin and welcome to DFW REI Club! The reason you're not getting much response is because, yes, there are actual investors on this forum, and it is quite obvious to us that what you are offering is not a good deal. One of the main things I look at in an investment is how much of my own money would I have to use, and how long till I get it back. I did not run any comps, but it looks like 290k is full retail value for this property. As an investor, I'm generally not interested in buying property at retail prices. Nice cash flow, along with other factors, can certainly make a property an exception to that, but your property is not one of those. Actual net income would be considerably less than you stated (something I am sure is affecting your desire to sell), but even with the numbers you gave in your example, it would take almost seven years just to recover the down payment. That's if you have zero vacancy, zero repairs, etc. There are PLENTY other things I can do with 73k that will provide a lot more return with a lot less risk.

    Robin's general cap of $200k for a single family home is fairly industry standard for properties to keep in your rental portfolio. This is due to the sweet spot for net cash flow coming from homes in the 85-135k range. There is a threshold in home values where you no longer have people interested in renting because if they can afford the rent, they're likely in a position where they could just buy it instead. For buy and hold properties, you want to stay below that threshold. Rehabing and reselling is typically what you do with more expensive ones. That being said, your property is not a single family home, but a townhome. So guidelines are a bit different and the pool of potential renters in that price range is better.

    My concerns if I were to consider your property would be; value going down, possibly becoming upside down due to buying at retail; vacancy, just one month of it, even at the numbers you gave, makes a huge impact; and it taking seven (more likely 10) years just to get back what I put in. Even if it did cashflow 10k a year on paper, the rest of the numbers don't add up, and in reality, things happen.

    Which "We Buy Houses" firm are you associated with? What do your mentors there advise about this property?