The last time I was in Texas was 1963
— for a couple hours or so. Landed in El Paso, boarded a bus, and was across the New Mexico border and on my way to Las Cruces. I was 12, and all I knew was Mom had a business trip, and I was on a week long adventure. It all looked pretty boring and desolate to me.
The Texas I’ve ignored and proactively avoided with consummate skill for the last 30 years isn’t the Texas I experienced first hand the last couple days. Imagine Kansas City — only better. Don’t get me wrong, because if you read this blog more or less regularly, you know I like KC real estate. The only problem is, I can’t get anyone there to help me out — except for the guy who got me interested in the dang city to begin with. He makes a compelling case for KC investment property, and has for quite awhile.
Texas though is different on so many levels. Take food for example. Our most gracious hosts, (who wish to remain anonymous for now) took us out Tuesday night for dinner. They chose a place called Babe’s. From now on, when I hear about how good smoked or fried chicken can be, I’ll know first hand what they’re ranting’ and ravin’ about. I swear, I almost ate an entire chicken.
Dallas/Fort Worth is known locally simply as the Metroplex. Everything we checked out was just a bit south all that clutter. Besides, we go to places that are in their growth childhood, not adulthood, right? Right. 
First — the People
They remind me of the quality we’ve come to expect in Idaho. Highly competent, humble folk, who couldn’t be more hospitable or gracious if they were family. When asked a straightforward question in plain English — they answer in kind. Negative info is volunteered without hesitation — or waiting to be asked.
The Properties? — New
What we saw was heartening. Locations in which they’re either the only new and modern alternative for quality and well employed tenants, or in neighborhoods not normally affordable for investors. Imagine owning a duplex in a neighborhood with houses occupied by owners — who 
are, basically — you. And your duplex is in the middle of the neighborhood, blending in seamlessly with the homes around it.
We’re talkin’ prime beef on the hoof here.
Does it get any better than that? Not in my experience. Growth, solid location, high rent to price ratios, quality construction, high tenant demand — this is what we look for, know what I mean, Verne?
The Numbers
I won’t bore you with the details here, but here’s the bottom line.
Short lease-up periods. Reasonable management fees. Relatively higher quality tenants than we’re used to in comparable properties/locations in other regions.
10% down — break even or slight positive cash flow — fixed rate loans — no neg/am required.
After tax cash flows are about $2-3,000 a year. We’re seeing the ability to buy below market value through the relationships we’re forging.
Every time I hear about how this or that area is growing, I immediately wonder what kind of commerce is moving there. Seems like almost every smallish town we saw, a new 3-5 story hospital/medical center had recently moved in.
Hospitals don’t, as a rule, take business risks if they can avoid them. They’re not what you’d call, risk taking entrepreneurs. So when you see them recently ensconced in a smallish, growing area? It probably means they know something most folks don’t — yet.
Next Up
Austin — Benn & Lani — Nobody speaks Texan here — does your place have brick on all four sides?
Related posts:
About BawldGuy
Recent Comments