Home Buying in Cedar Hill>Question Details

Ucan, Home Buyer in Dallas, TX

I am currently prequalified to purchase one (hopefully more) single family homes as an investment. I am

Asked by Ucan, Dallas, TX Sun Dec 23, 2007

presently focusing my search in the Cedar Hill, Duncanville, Desoto, Glenn Heights, Lancaster TX areas. I'm looking to puchase home(s) requiring minimal to nominal rehab, and with minimal 20% equity capture. Is this likely in this market, with current conditions? Alternate markets and/or expectations would be appreciated. Also - I will be seeking to establish contact with agents with experience in investment property; specifically in the areas I'm focusing my search.

Thanks....

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6
Sure, you either need to go about it in two ways. One, look at the lenders websites for homes about to be forclosed on then contact the lender or the owner. Or, try the dreaded court house steps. I can hook you up with an agent that specializes in it if you are interested. Good luck.
0 votes Thank Flag Link Wed Jan 2, 2008
I think 20% equity (nominal rehab) is completely feasible, however, you won't have time to think about it and these properties aren't a dime a dozen especially if they are cash flowing.

A good agent will know within hours about the home and by the end of the day there will be competing offers. Be ready to move on it because you aren't the first one to want 20% equity and no work.

Finding the RIGHT agent should be your #1 priority. 'Right' being the key word.

Good luck on your first one.
Susan Walker
0 votes Thank Flag Link Thu Dec 27, 2007
Whatever you do, don't consider the cash flowing properties at Forest Creek condos... They aren't in the are you are looking for and the cashflow is much better than Dallas areas.
0 votes Thank Flag Link Thu Dec 27, 2007
Sure. Your strategy is a pretty good one, and works for lots of people. However, a couple of considerations:

If you buy the properties in your own name, using your credit, each purchase is going to "ding" your credit score. Not hugely, but enough to lower it some. Also, using conventional lenders, you're likely to max out your purchases at 3 or 4.

I'm not a lawyer or accountant, so this isn't legal or financial advice, but: For legal and asset protection you may want to consider establishing an LLC for each property. You can buy the property in your own name (lenders generally won't lend to LLCs), then transfer ownership to the LLC. Some investors use one LLC for all their properties, but--and check with a lawyer on this--some consider this risky since, if the LLC is breached, then all your properties are at risk. Another technique that can also protect you is to move the properties into land trusts.

You're smart to want to work with agents experienced in investment property. Take your time when interviewing them. Make sure they really understand what investment properties are, and the exit strategies involved. (I'm a Realtor and, not to bad mouth anyone else, but 99% of agents, if asked, will say that they know and can help with investment properties and strategies. I'd say, realistically, 5%-10% really know and understand real estate investing of the type you're talking about.)

Good luck.
0 votes Thank Flag Link Sun Dec 23, 2007
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Yes it is likely but there is fierce competition among investors for that type of property. The best bet will be HUD or VA homes that have been on the market a while.

It will also depend on what your definition of "minimal rehab" means to you. Paint and carpet?? may be appliances? fixtures?

Are you looking to build a rental portfolio or looking to flip?.

I'll be happy to discuss this with you as well as other areas that may do better.

naima@sumner-realty.com 214-289-8555
0 votes Thank Flag Link Sun Dec 23, 2007
That souds like a good business plan you have. I would try to find out what the rental rates are in the areas so that you can find out how much you can spend on the homes and after mortgagepayments, taxes and insurance, vacancy you still have positive cash flow.
Hope this helps
0 votes Thank Flag Link Sun Dec 23, 2007
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