A contract where title does not transfer for greater than six months is defined as an “executory contract” under the Texas Property Code and is subject to strict rules. Violations are expensive.
Contracts for Deed where effectively restricted by the Texas legislature in 2001. Lease with an option to by has been restricted severely in 2005. Property tax relief, if any, will mainly be in the form of a homestead exemption, thus it will not benefit investors who cannot take this exemption.
The Texas Legislature has been called back in a special session to work on a school finance plan that they did not get to in the regular session. One of the first things they have done is to vote themselves a raise and a retirement increase. This was done on a non-recorded voice vote to shield themselves from a voter backlash.
I’m just looking for your feedback to help me make a
relocation decision based in part upon finding the
best state law environment for a real estate investor.
I’m in Texas now, and the opportunities have been great,
but the politicians have been busy passing laws that are
very hostile to real estate investors doing what we do.
(For instance, the recent law limiting Lease/Options.)
I’m strongly considering moving my business to a new state
where they are still friendly (or, at least, not hostile) to our business.
Any recommendations?
Can you let me know if you think your state laws are good or bad?
Are there any states that you know I should avoid, where the laws are getting as bad as they are in Texas?
Re: Best States For Real Estate Investing? - Posted by Squidly TX
Posted by Squidly TX on July 13, 2005 at 17:01:47:
With respect to Texas, I am a Texan and while I don?t drive a white caddy with longhorns on the hood, I do have a pair of boots and don’t consider this State to be hostile to RE Investors. Yes, Gov Perry was swayed by the Realtor Lobby, who wants to severely limit transactions outside their narrow-minded world.
Texas is great for RE investment as the major cities like Dallas, Houston, Austin, and San Antonio have excellent opportunities and good potential for growth and appreciation in value. It has not gotten as out of control in areas like CA, FL, and the North East. Texas legislation is doing the right things for Property Taxes, and since there is no State Income tax, this all favors RE ownership, rentals, and investing.
As for the recent legislation, yes it?s a problem, but not one that will force me out of my State. If you?ve been in the business long enough, you realize you have to take the good with the bad, and then work around the bad. Where there is confusion, there is opportunity, and when the markets change, it?s just a shift in wealth. You can still L/O a property here, you just can?t call it a L/O after September 1. Even after Sept, it will still be legal to rent your house. And after Sept, it will still be legal to sell your house at a negotiated price and contract. And after Sept, you can still set the closing date of that contract for 1 year out, and you can still make provisions on solid rental history. Get my drift? Quit complaining, and get more creative.
It was ACORN, the Association of Community Organizations for Reform Now, and the Texas Communist Party who pushed this new law through. They are anti-capitalist to the hilt, and they wrapped it all up in a “Evil Rich vs. Poor Downtrodden” package to get it to fly. And the politicians are too stupid to see it for what it really is. That’s the state where you want to continue in business?
Why take the good with the bad when you don’t have too? Why not go where it’s all good?
And it doesn’t matter what you call your deals, the courts have long applied the rule of substance over form.
If it looks like a duck and quacks like a duck, they are going to say it’s a duck, no matter what your paperwork calls it.
This was on the main board, but it’s relevant here: