How would you allocate $2M of personal capital in Texas real estate right now?
How would you allocate $2M of personal capital in Texas real estate right now? Retail, Strip Malls, Multifamily, etc?
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NNN leased Arby’s exclusively
Probably pretty basic but maybe just housing in certain suburbs of DFW
Fast growing area and everyone loves their houses up there
Since $2MM equity assumed, I’d split it up between stable middle class neighborhoods, some up and coming luxury, and some long shots in gentrifying areas.
I’m in this position right now, but I’m also a developer. Buying land for suburban retail.
Which markets and check sizes?
Dallas, outside Austin, Houston all still pencil for small suburban retail development deals. 2-5MM equity check sizes.
If you know the markets and have a good GC you’re at 140 - 155 / ft on HC for retail shell space.
Cap rates are still at 6.25 - 6.5 if you build the right product.
I believe I could allocate 20MM in equity across 8-10 deals for ground up with a 3 - 4 year horizon and hit 2 - 2.5x pretty reliably with this strategy. I’ve been doing this strategy for a few years to present day.
Feedback on Texas I have gotten is it is tough as they re-asses taxes annually and there is sooo much open land (outside of Austin) and little regulation that you can bring supply to the market quickly. These airbnbrs are blowing up left and right so I think austin will be ripe again for investment in the next few years.
Given the current market I'd stay away from Texas real estate and plug the $2M into VOO.
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