purchasing a rental property soon. (McKinney, Coppell: bank owned, real estate, renter)

[mom2gurls]

Looking to purchase a rental property soon between 150-200k cash in the next 1-2 months. My brothers friend lives in uptown and says its a really cool area to snag townhouse or condo and its great for professionals..he was saying a 2 bedroom 2 bath is great. I haven't been to the area...but the idea sounds enticing.

Another idea is to get a small single family in a desirable school district (hot area) for people like us, who moved the to area and need a year or two to figure it out. What would they look for. Safe area, good schools, commutable to freeways..etc etc. Initial thoughts came up with south frisco, allen, pisd, Coppell/irving. An agent told my husband that wylie is a great place to snag a rental/rockwall/garland...I know nothing about those areas...but it seemed far away...but he apparently just did a deal in the same price range and brokered a deal for McKinney and it rented immediately for 1500.

What are the chances of finding a nice sustainable rental. Should we try and look into a bank owned home and fix it up a bit...not for flipping but to get a good deal? Should we go with a real estate investor or should we go with a RE agent?

I will take a good referral for someone who has a specialty in searching for investment properties via PM.

[TurtleCreek80]

Do you live in DFW yet? I thought you were in the process of relocating?

The best place to buy a rental property is within a 10 minute drive of your primary residence. You'll want to be able to drive by 1-2X per week to do a visual check (yard maintained, broken sprinkler head pooling water, limbs down after storm, etc); the further away you live, the more likely there will be problems you don't know about. Then you need to look for cash flow positive properties - ones where the rental income will exceed the PITI + maintenance + any HOA dues. Usually single family homes in older but not super popular areas with at good to great schools make for good targets.

[PlanoGirl]

Originally Posted by TurtleCreek80

The best place to buy a rental property is within a 10 minute drive of your primary residence. You'll want to be able to drive by 1-2X per week to do a visual check (yard maintained, broken sprinkler head pooling water, limbs down after storm, etc); the further away you live, the more likely there will be problems you don't know about.

I think this is fantastic advice! We have a rental next to us, and the owner does not live nearby. Turns out he has a property manager who keeps up with the property, but I guess they weren't doing their job well. Many issues with the last renter and though we saw evidence of concerns, we didn't have a number to contact anybody to let them know. The renters ended up leaving in the middle of the night and left the house in a horrible state inside. We're pretty convinced something fishy was going on but it was so many subtle things you would only notice if you kept a very close eye...or lived right next door like us..lol! Anyway, the owner was completely blindsided, and the renters had been "good" up to that point...ie. paid rent on time...but he's paying for it now. They are practically having to gut the entire interior.

[katrina305]

I have a cousin who moved from NY, and he bought a house before they relocated, and rented it out until they made the move. They had the realtor check on the house every week or so and paid them $100 a month or something like that. Although it probably is ideal to live in the area first, it can be done this way also.

[TurtleCreek80]

Originally Posted by katrina305

I have a cousin who moved from NY, and he bought a house before they relocated, and rented it out until they made the move. They had the realtor check on the house every week or so and paid them $100 a month or something like that. Although it probably is ideal to live in the area first, it can be done this way also.

Depending on the property's "math", that $100 / mo may be a large chunk of the cash flow. To me, that is more of a short term workaround (if needed) than a long-term solution. The first two years, my rental condo broke even. $100/mo would have made the property operate at a loss. Now that the in-town rental market is on fire, I make a few hundred each month. Still $100/mo is a meaningful expense I'd rather not part with.

[katrina305]

He pretty much bought the house out in cash and the rent was all profit, the $100 really was nothing. He ended up moving down and buying another house to live in and still rents out the original one.

[Rakin]

It's pretty difficult for the average person to get "a good deal" in the current market and in a desirable location.

Investors buy when the market is depressed not when it's booming and a shortage of homes.