Why Now May Be a Great Time To Invest in Dallas Real Estate

Finding a strong market to invest in is as simple as looking for population growth, job growth, and a diverse economy. That’s why some of the smartest minds in real estate are focused on the long term strength of Dallas, TX.

POPULATION GROWTH: The Dallas-Fort Worth area’s population has grown by nearly 1.3 million from 2000 -2009.  That is more than any other metropolitan area in the United States.  The Dallas–Fort Worth–Arlington MSA is the largest metropolitan area in Texas, the largest in the South, the fourth-largest in the United States (SOURCE: Wikipedia on DFW).

The Dallas, TX metro is forecasted to add 4 million new people from 2010 – 2040 according to the Texas Data Center  and the North Texas Water Board.   That’s one new person every 4 minutes!!! In 2009, the population of Texas grew by 231,539.  That is more growth than Florida, Arizona, California, Nevada and Colorado, combined.

A demographer at the Brookings Institution attributes the population growth to a more diversified economy in Texas and more conservative lending practices during the real estate boom. When combined with the state’s steady growth earlier in the decade, Texas is projected to receive three new seats in Congress.  (SOURCE: Recession Cuts Migration to Sun Belt, New Figures Show 
New York Times).

JOB GROWTH: “Diversified industry and relatively stable housing fundamentals have provided local residents with comparatively secure standards of living. Cities where home prices don’t fluctuate wildly are particularly well-positioned to ride out this recession, because they were spared the domino effect of foreclosures, lost jobs and lost productivity. Rather than chasing rising home prices or apparently plentiful jobs in one-industry towns, families looking for long-term economic stability should seek spots where industry is diverse and housing price shifts are benign.”  (America’s Fastest Recovering Cities
 – Forbes Magazine)  According to the US Bureau of Labor & Statistics, Dallas job growth is twice the national average.  An educated populace and a cost of living below the national average, make Dallas enticing to companies seeking a lower cost but highly qualified workforce.

DIVERSE ECONOMY: The Dallas economy is primarily based on banking, commerce, telecommunications, computer technology, energy, and transportation.  North Texas has 28% of the state’s workforce, employing more than 350,000 in healthcare, 225,000 in high-tech and 68,000 aviation-related jobs.  North Texas has 20 colleges and universities, 17 graduate schools, 3 medical/dental schools, 2 law schools and 20 community college campuses (SOURCE: North Texas Commission).  The Dallas/Fort Worth Metroplex is home to over 10,000 corporate headquarters making it the largest concentration of corporate headquarters in the United States.  The Dallas metro area is home to 25 FORTUNE 500 company headquarters and 7 FORTUNE Global 500 companies which bring more than $819 billion in revenue to North Texas. (Source: Fortune Magazine 2009)

  • WORLD CENTER OF AVIATION
    • DFW International Airport is the third busiest airport in the world
    • There are more than 850 aviation-related businesses in North Texas – more than any other area of its size in the world
    • There are more than 68,000 documented aviation-related jobs in the region
  • LOGISTICS HUB
    • DFW is a major logistics hub and has the lowest distribution costs to the top 50 U.S. consumer markets of any region
    • Since the passage of NAFTA, DFW trade to Mexico and Canada has more than doubled – in large part due to the proximity of Interstate 35 – the NAFTA Superhighway
  • FINANCIAL AND BANKING CENTER
    • North Texas is a major financial center and is home to one of 12 regional Federal Reserve Banks, as well as several regional bank offices and corporate headquarters to Comerica
  • HIGH TECHNOLOGY CENTER
    • North Texas is a national and global leader in the high-tech sector, and 8.3% of the region’s total 2.7 million labor force is employed in high-tech fields, according to the Metroplex Technology Business Council
    • North Texas’ 225,000 high-tech workers account for 52% of Texas’ total technology workforce, and North Texas boasts 6,215 high-tech firms
    • Although the high-tech industry employs 8.3% of the North Texas workforce, the high-tech sector accounts for nearly 13% of wages paid to North Texas workers – indicating the relatively high-paying nature of these sophisticated jobs
  • RETAIL CENTER
    • North Texas is the 10th largest retail market in the country. Dallas Market Center, the world’s most complete wholesale marketplace, hosts approximately 50 markets each year attended by more than 200,000 retail buyers from all 50 states and 84 countries, and conducts more than $8 billion in wholesale sales annually
  • HEALTH CARE EXCELLENCE
    • North Texas is known for its extensive state-of-the-art health care facilities with more than 90 major hospitals and two major medical schools
    • Health care is one of the largest and fastest growing industries in the Dallas-Fort Worth region with more than 350,000 health care jobs

LOW TAXES:

  • No personal or corporate state income tax
  • Maximum state and city sales tax of 8.25%

QUALITY OF LIFE:

  • North Texas features world-class athletes, teams and sports facilities, including the new Cowboys Stadium, host of the 2010 NBA All Star Game, 2010 World Series, 2011 Super Bowl XLV, and the NCAA Men’s Final Four in 2014
  • The region is growing as an arts hub with 7.9 million people attending arts and culture events annually
  • Low cost of living
  • Affordable housing
  • Plentiful water
  • Public transportation and excellent highway system
  • Strong k-12 schools and universities
  • Centrally located
    (SOURCE: North Texas Commission)

For more information about Dallas, visit our Dallas Market page or find a local market expert in our Resource Network.

10/24/10: Big Profits without Wall Street or Tenants – How Private Investors are Making Money from the Financial Crisis

When an economy burns down, the landscape is charred and the financial food chain is disrupted.  Viable businesses starve for funding, while investors hunger for return.  The normal eco-system has broken down and sources of capital and investment opportunities aren’t where they’re supposed to be.  Everything is in disarray and the ensuing uncertainty breeds fear.

But it also brings opportunity.

Sadly, after an economic forest fire, most people focus on what’s burned.  They hang around the old Wall Street and banking feeding grounds, waiting for things to grow back and settling for low returns or grubbing for hard to find funding.

But others are able to find new pastures simply by looking past the beaten path and seeing where the new opportunities are growing green in more fertile soil.

We found a guy who’s doing something so brilliant that we decided to dedicate this episode to cultivating our understanding of his model.

Plowing through the conversation in the studio for this adventure in broadcast excellence:

  • Your show host and real estate Yogi, Robert Helms
  • Co-host and Boo-Boo bear, Russell Gray
  • The man with the Smokey voice, the Godfather of Real Estate, Bob Helms
  • Special guest, investor and real estate entrepreneur, Ron Black

A few episodes back, Ron Black called in and seeded our minds with the awareness that in today’s charred economy, conventional banking is failing to feed the needs of both savers and borrowers.  Interest rates paid to savers are too low.  Access to loans for consumers and business is too tight.  Even well qualified borrowers are having a hard time finding the funding needed to grow the economy.

For investors in the past, long term appreciation has proven to provide plenty of financial timber for building a strong retirement.  Just buy stocks and real estate, water them faithfully, and in time they grow into mighty oaks of equity.  But today, the economic forest has burned down – and while those who plant now will likely have some big trees in 20 or 30 years, what if you don’t have that much time?

For baby boomers, the last 10 years of buy and hold stock investing has been disappointing at best. The Dow hasn’t grown.  It’s even worse for retired folks trying to live on interest income when yields are low single digits.  When you’re living on interest, if rates go from 4% to 2%, you just suffered a 50% pruning.  Ouch.

When it comes to personal finance, conventional financial planning models are struggling to adapt. The whole system is designed to sell stocks and bonds through the Wall Street machinery and to park money in the banking system.  Then these “experts” take your money and (as we’ve all now sadly discovered) they do all kinds of risky things, most of which the average person doesn’t understand, can’t control and probably wouldn’t approve of.

Conservative individual investors have been gravitating more towards dividend paying stocks. These stocks are typically issued by big companies with solid profits (or at least as solid as they can be in a fragile economy).  With yields of 6-8% and the opportunity for long term capital gains, we understand that this looks “good” compared to whatever green shoots are peeking out of the charred landscape of traditional Wall Street offerings.

Of course, if times get tough for the dividend paying company, they may choose to reduce or eliminate the dividends.  Or, perhaps they’ll incur debt or distribute vital reserves to continue to pay dividends when they really can’t afford it.  If this happens, you can bet the stock price will drop, which makes an exit in favor of a better offering potentially expensive.  Buy high and sell low is not a winning formula.

What about high yield bonds? Money for top quality corporate borrowers is pretty cheap right now.  The best companies are sitting on piles of cash waiting for the economy to stabilize.  They hardly need to borrow and wouldn’t pay much to do so.  So high yield bonds are likely to carry substantial risk.  Plus, are you ready to trust the Wall Street credit rating agencies again?  You know, the ones that gave sub-prime mortgage backed securities a trip A rating?  We’d rather go for things that we can see and understand.

Then there’s high interest savings accounts and high yield CD’s.  But remember, today’s definition of “high interest” is maybe 3-4%. Whoopee.  Plus, the better rates mean locking the money up for years.

So the conventional investing trees are pretty bare right now.

The problem with the Wall Street model is that investors are too far removed from the actual investment and have so little security if something goes bad (does that really happen?), that even in the good times, it’s still risky.  The only reason it doesn’t feel risky is because Wall Street insulates you.  Plus, all the slick marketing is intended to make you feel like giving your money Wall Street and the banks is not only normal, but your only choice.

With so much retirement planning marketing built on the Wall Street model, most people don’t have any idea where to find another option – or even what it would look like.  And when they do, those Wall Street paradigms pop up and prevent people from seeing that low risk, high yield, short term, cash flow investments are possible in today’s market – specifically because the Wall Street systems have broken down.

In this episode of The Real Estate Guys™ Radio Show, our special guest Ron Black describes how he identified a void left by the breakdown of the traditional mechanisms for matching investors with yields.  Best of all, his model cuts out Wall Street and the banks (after all, they’re really just high priced middlemen) and gets the investor very close to their actual investment.

The bottom line is that double-digit high yields are currently available on short term, secured investments which are easy to access and understand. It’s something anyone can do in today’s market to supercharge their portfolios, whether seeking current income or long term growth of principal.  Think of it as Miracle Gro for your portfolio.

You’re gonna like this show!

The Real Estate Guys™ Radio Show podcast provides education, information and training to help investors make money with their real estate investments.

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