Dallas Growth Is All Over The News

June 26th, 2010

At Real Wealth Network, we've been talking about how good the income property in Dallas is for years. Now everyone else is too.  Check out all the recent headline news on Texas:

DALLAS (Dallas Morning News)  Home starts in North Texas have increased by over 50 percent so far this year, and builders and developers are busy snatching up lots across the area.
 

NEW YORK (CNNMoney.com)  The booming Dallas-Fort Worth metropolitan area added more residents during the past decade than any other city in the United States. According to the latest Census Bureau figures, the population of the sprawling Texas metro area grew by about 1.3 million people, or 25%, between April 1, 2000, and July 1, 2009
 

TEXAS (USA Today)  According to Census population estimates, Texas is still highly regarded, having four of the ten fastest-growing cities in the country among cities with populations greater than 100,000. From 2008 to 2009, 11 of the nation's 25 fastest-growing cities with a population size greater than 100,000 people were in Texas.

Frisco was ranked number one while Austin, Dallas suburbs such as McKinney, Carrollton and Lewisville, and oil centers Odessa and Midland ranked high on the list.
 

AUSTIN (Austin Business Journal)  Texas cities were prominent in a new listing done by Forbes.com on the best cities for young professionals. Dallas ranked sixth and Austin not far behind, ranking tenth.  The list was determined by factoring in unemployment rate, average wage, affordability and public company presence.
 

COLLEGE STATION (Real Estate Center)  Texas is coming out of the Great Recession and leading the United States in the current U-shaped economic recovery, according to the Real Estate Center's latest monthly review of the Texas economy.

The state's annual employment growth rate turned positive in May 2010 and posted an annual employment growth rate of 0.2 percent for the period from May 2009 to May 2010. The state's seasonally adjusted unemployment rate rose from 7.5 percent in May 2009 to 8.3 percent in May 2010, while the U.S. rate rose from 9.4 percent to 9.7 percent during that period.

Five Texas industries — education and health services, mining and logging, other services, leisure and hospitality, professional and business services — and the government sector had more jobs in May 2010 than in May 2009. The state's actual unemployment rate in May 2010 was 8 percent.
 

TEXAS (TradingMarkets.com)  Medical Properties Trust Inc. purchased three hospitals in Texas for $74 million. The inpatient rehabilitation hospitals are located in Houston, Dallas and Austin and are operated by and leased to affiliates of Reliant Healthcare Partners.
 

DALLAS (Dallas Business Journal)  An $850 million fund to invest in real estate has been launched by Dallas-based Stratford Co. Although the company did not specify what type of real estate investments they will target, Stratford has invested in the Dallas-Fort Worth, Austin, San Antonio and Houston areas. Stratford's website said their strategy involves acquiring land in developing metro areas with strong growth prospects.
 

FORT WORTH (Fort Worth Star-Telegram)  Prices of existing homes in Texas had a 2.2 percent increase while there was a 1.7 percent increase nationwide.
"In more than half of the 100 markets surveyed by CoreLogic, home prices increased from March 2009. The year-over-year increase is a sign of stability," said Mark Fleming, CoreLogic's chief economist.
 

PALM CITY, Fla. (Policom Corporation)  Houston, Dallas and Austin are among the 20 strongest metropolitan areas in the nation, according to POLICOM Corporation's annual economic strength rankings."The top-rated areas have had rapid, consistent growth in both size and quality for an extended period of time," said William H. Fruth, president of POLICOM.
 

FORT WORTH (Fort Worth Star-Telegram)  For the second year in a row, Texas cities took half of the top ten spots in Newgeography.com's annual ranking of the best cities in the nation in which to find a job. Dallas-Plano-Irving ranked fifth and Fort Worth-Arlington seventh. The rankings are based on three-month rolling averages of monthly employment data from the Bureau of Labor Statistics from November 1999 to January 2010.
 

DALLAS (Dallas Business Journal)  Texas has the 12th-lowest home-care costs and other long-term care services in the country, according to Genworth's 2010 Cost of Care Survey. Annual nursing home private rooms cost, on average, $58,765 in Texas, compared with $75,190 nationally. These rates represent an increase of 3 percent in Texas over the past five years and 5 percent nationally.
 

DALLAS (Marcus & Millichap)  Dallas-Fort Worth's economy will strengthen this year, especially in Class-A buildings, according to the 2010 National Office Report by Marcus & Millichap. While sublease space will be the most significant hurdle for top-tier operators, most of the attractive locations should be absorbed by midsummer, said the real estate investment firm.

Among the most significant aspects from the firm's DFW office research report:

- Dallas is expected to lead the nation in job gains during 2010, expecting as much as a 2.3 percent gain;
- office-using employers are projected to add 16,000 jobs, a 2.1 percent boost;
- development will tick down to 1.6 million sf in 2010;
- rent declines will moderate this year as employment gains traction.
 

DALLAS (Dallas Morning News)  Indicators of recovery in North Texas are beginning to pop up, according to the Federal Reserve Bank of Dallas' latest Beige Book Survey. The residential real estate sector and the retail, staffing, energy and high-tech manufacturing sectors are reporting higher demand for goods and services.

The survey of local professionals reported that housing contracts were improved, and builders said sales in first quarter 2010 were strong. Additionally, apartment demand was described as "meaningfully positive."

Representatives for commercial real estate reported that the market is near the bottom and note a drastic reduction in rental rates on renewals.

Retail sector sales increased, as did the raw materials price for steel.
 

DALLAS (Dallas Morning News)  With more than 9,000 apartment units currently being built, the Dallas-Fort Worth area has more apartments under construction than any other U.S. market. Most of these are in the Allen-McKinney, central Dallas, west Plano and Frisco markets.

Thanks to net apartment leasing of over 6,200 units in first quarter 2010, the high rate of construction may not be a bad thing. Demand in the first quarter was the best in more than two years and compensated for the entire net apartment leasing declines in 2008 and 2009, according to MPF Research.

 MPF Research predicts that overall apartment vacancies will decline slightly this year from current levels of less than 12 percent.
 


INVESTING IN DALLAS?  While great deals can be found in Dallas, there are many areas to avoid. It's important to work with a local company that specializes in investment property.  Our teams at Real Wealth Network get steep discounts by buying in bulk with cash directly from the bank. The properties are fully rehabbed in like-new condition and rent ready for a turn-key investment. The homes are in areas where the builders are back in business, but we are getting the properties far below the cost to build. This creates instant equity and cash flow for our members.

If you'd like to see some of our better-than new, discounted, cash flowing, turn-key properties in Texas, give us a call or check it out.

What articles have you seen about Dallas?
 

 

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Investor Tip of the Week – March 4

March 4th, 2010

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How do you determine what’s too good to be true, vs what’s a really great deal?

At Real Wealth Network, we get lots of folks calling us excitedly to tell us about their latest investments. We’ve learned to screen these out rather quickly. Last year, a close friend called to tell me about a company that promised to double his return EVERY MONTH! You could invest $10,000 and get $10,000 per month, every month for the rest of your life.

It doesn’t take much to figure out that this kind of return is simply unsustainable, and probably not even possible. However, the slick presentation got hundreds of intelligent people to sign up AND sign up their friends. Sure enough, no one ever received a $1 back. I would have liked to see real numbers on this deal – not speculation. But there were none. The entire business plan was based on speculation and “if-everything-goes-as-planned-policies.”

Often people see the 30+% cash-on-cash returns on our website and tell us they think it’s too good to be true. One of the reasons I like real estate is that it’s straight forward and easy to figure out. If you don’t believe the income numbers, you can talk to 5 property managers in the area to verify rents. You can ask for the seller’s tax return to verify that the rental income was claimed. You can get a title report to learn about liens and owner history. You can get an independent appraisal to understand value and comps. And you can get independent inspections to verify the condition of the property. It’s hard to pull the wool over your eyes, unless you just trust blindly and don’t do your standard due diligence.

Don’t think something is too good to be true, just because it’s better than anything you’ve seen. People are getting rich all around you, so there are great deals out there. The questions is, “which ones.” If you are not an expert on the topic, don’t guess or believe the seller/promoter/commissioned agent. Get advice from a real expert – someone who has MADE money doing what you’re trying to do, and not just from selling the concept.

To Your Wealth,

Kathy and the Real Wealth Team

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The Weekly Wealth Report – March 1

March 1st, 2010

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Greetings!

This week’s event should be very interesting, whether you have money or want money. Get an inside look at how local investors are making huge profits either borrowing or lending hard money.  See details below.

Hope to see you there!

Kathy and The Real Wealth Team

Financing

You probably know by now that the Fed raised its discount rate on emergency loans to banks by 0.25%, to 0.75%. The discount rate is not the Fed funds rate and the central bank said the increase does not “…signal any change in the outlook for the economy or for monetary policy….”  However, some analysts feel the Fed move was an attempt to appease inflation “hawks” who fear that a new bubble is growing as a result of all the “free money” to banks.

Investors are still locking in 5.5% interest rates on 30 year fixed loans. I think we can all agree that we will see serious inflation over the next 30 years, yet your fixed rate will not change. In 10 years, your payment will feel like half of what it is today . Rents will go up with inflation, but your payment is locked. What a beautiful deal.

Our lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders.

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The Market

A few years back, a member from our network urged me to consider working with a group up in Sacramento that made pretty stellar guarantees to its investors. After reviewing their offering, we denied it. Sure enough, several years later, that group has been charged by the SEC for defrauding investors.  http://www.sec.gov/news/press/2010/2010-24.htm

Why did we turn that “golden opportunity” down? First of all, the properties were in California, and all our research showed that CA housing prices were way out of whack in comparison to incomes at that time. We knew an adjustment was coming.

Second, there were guarantees – guarantees of a certain appreciation rate, guarantees of rental income and guarantees of a certain return. This is real estate. There are no guarantees. You can do many things to mitigate the risk by buying right, but anything can happen… And it did.

Third, too much control was given to the managing partners. That made me nervous. I like to be in control. Just ask my husband. And that’s why I like real estate as an investment.

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