My first experience with investment property in Texas came in the ’70′s. Fortunately it wasn’t us, but many pros I knew came back with stories, which if made into movies, would’ve been rated R for financial violence. 
It repeated itself over and over. Seasoned pros coming back from somewhere in Texas with their tails between their legs, telling their tales of woe.
I made a pact with myself — Texas now had an imaginary fence around it, as far as investment goes — and that meant my clients also. No Texas properties. Too risky.
Things just seemed to happen there without much rhyme or reason. Add to that the mystery of why all those veterans came back scarred, and what you get is a So Cal Scaredy Cat. 
Why leave San Diego anyway? All our market ever did was go up, go up some more, pause, and go up again. Over and over and over…
As you’ve read here many times, I’m not a promoter of San Diego income property. It’s a bad investment today, and will only be worse tomorrow. Of course, that’s my way of explaining why Brown & Brown only sells San Diego income property for investors and not to investors. San Diego isn’t the only member of this club by any stretch. I believe, for instance, Las Vegas is now and forever a poor investment destination. Though I will admit they have some exceptions there — just not small income units. How ’bout most of Northern CA while we’re at it? Anyone for a million dollar duplex?
Dead silence ensues.
Josh and I leave for Texas (Dallas) this morning. Yep, the ban is almost officially at an end. Seems Grandma was right — try to avoid saying never and always.
Inner Circle members will be pleased with what we bring back from Texas.
Meanwhile, back at the ranch…after we’re finished with the Dallas business, we’re off to Austin to meet the leaders of the Genius clan. Benn and Lani are an unbeatable husband/wife duo who have successfully double-teamed the entire real estate industry this year. Benn is a broker, while Lani, unlicensed by design, takes care of all the marketing.
I liked Lani from the first because she’s an obvious 
graduate of the Attila the Hun school of gettin’ stuff done.
Benn is president of the Real Estate Techno-Nerds — Austin Chapter. His plan is to conquer the Austin real estate market one idea at a time. So far, so good, from my vantage point. I’d sure like to be part of that. (Yea, I know. But that’s what passes for BawldGuy subtlety.)
Can’t wait to meet the Dallas guys — and just know it’s gonna take a week for Thursday to get here, so we can get together with Benn and Lani. Good times.
The weight thing
About a month ago I wrote about losing weight, and investing in real estate. As you would expect, The Purposeful Plan was invoked shamelessly. An update was promised, and this is as good a time as any.
Started out the last couple days of July tippin’ the scales at 195. That ain’t necessarily bad — unless you’re only 5′ 9″. Of course, with a waistline expanded to 41″ and two more chins than I was born with, 195 
pounds wasn’t, ah, working for me.
It’s now been a total of 65 days. Today the scales smiled for me — 165.8 pounds. The waist that ate San Diego? Almost gone — 33½”.
The Plan was thoroughly thought out, and executed with fairly decent discipline. (I gotta say that, right?) It’s been WAY easier than I’d anticipated. But then, that’s the way it is for many real estate investors.
Hold on, Segue coming.
With clearly defined goals — a sense of reality about the current status quo — and a Purposeful Plan — your retirement goals can be achieved. In fact, most of the time they can become reality more quickly than you imagined.
Take some time to sit down and take the first step towards the cool drink with the little umbrella, on the beach…far, far away.
Establish what your current financial status is. Be brutally honest. Don’t skew the picture so badly you turn it into a Sesame Street episode — written by Stephen King. If you can answer an outsider’s questions easily, you’ve probably done a pretty good job.
Before you begin, if you’re married, you and your spouse should write down on separate pieces of paper, what you think your current net worth is. Winner gets to choose what movie you watch Saturday night. Don’t know about you guys, but if winning means I don’t have to watch Beaches — I’m in.
Talk to you later.
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About BawldGuy
I have but one word of caution: “realestatetaxes.” Oh, wait I lied. Two words: “realestatetaxes and insurance.” Did I say two words, I meant three; add “vacancy allowances.”
Those are just words of caution. Low, low purchase prices can make any potential problem go away.
Look here buddy- quit telling our secrets! Austin is a horrible place to invest and yeah, don’t relocate here either! The plush hill country, an economy lager than Cali’s, a record 400k relos a year, 2 new hospitals in two exploding areas, a suburb that grew over 800% in a few short years, yeah, stay away from texas =] But please, donate to the starving agent’s cause!
Those are all excellent points, imo. Vacancy factors should probably be set high there.
And not just insurance…title insurance, too. (Sorry, I had to put the lawyer cap on there.) Texas has the highest title insurance rates in the country and the coverage is generally worse than you will get in the rest of the country.
All that being said, I have seen many excellent deals done in Texas and I think there are bargains to be had. I think this is a good move for you.
Thanks David. I didn’t know about the title insurance costs. In California they have a nifty scam going. Sell a house, buy title insurance. Buy a house, buy title insurance. Maybe half price but uninformed transactors buy doulble.
Robert – Yer preachin’ to the choir.
Your points are why I’ve had a fence around Texas since Carter was in office. That said – when so-called bargain regions are selling 2-4 unit properties at 12-15 times gross annual income, you look elsewhere. When the high tax rate is discounted in my analysis, new Texas duplexes in solid locations, renting to ‘plus’ tenants – 8-8.5 times gross becomes eminently doable.
Robert – On your title insurance point – I’m meeting tomorrow with those folks. You can bet I’ll be quizzing them on the cost AND the quality of their coverage.
Thanks to both of you.
Benn – I knew it wouldn’t take long for you to show up.
I’m so uninterested in Austin, I’m driving their from Dallas today. Seems there’s a lady I gotta hug.
I have not researched Texas too much from an investment standpoint. But I can tell you this:
1. Ft. Worth has a cool downtown district after dark. There’s a bar there with about every beer known to man. The Flying Saucer? Check it out.
2. Benn & Lani will be tired of bald people by the time you leave. Be sure to have them tell you stature or something in front of the Universtity of Texas. Oh, and tell them “Hi” from me.
All I remember about Texas was my inability to get a cash-out second mortgage on my home to help save my business.
I wound up losing both.
It’s pretty bad when you have 50% equity in your home – yet no one will loan you any money because of the laws…
Maybe things are different, now.