The Smart Rental Shift: Why New Construction Townhomes Are Winning

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Show Summary

In this episode of the Real Estate Pros podcast, host Michelle Kesil interviews David Stockel, a seasoned real estate investor and agent based in Texas. David shares his journey into real estate, focusing on new construction and townhomes. He discusses the keys to successful investments, common challenges faced by investors, and the importance of education and networking in the industry. David also offers valuable advice for new investors and emphasizes the significance of building trust and relationships in real estate.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • David Stockel on Facebook
    • David Stockel’s Email Address: [email protected]
    • David Stockel’s Phone Number: (214) 212-5775

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  David Stockel (00:00)
  Recent purchase was buying one and was going to rent it out to my daughter and her fiance. And instead we gifted it to them as a…

  wedding gift and they were married on the 31st of December

  And now they live in a brand new town home and able to have ⁓ ownership and be able to build some equity and when if they start having a family and outgrow that they’ll be able to decide whether they want to sell that investment

  and take that equity and put it towards another property or keep it and rent it out.

  Michelle Kesil (02:10)
  Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chatting with, David Stockel, who is a real estate investor and agent in the Texas area. So, excited to have you here today, David.

  David Stockel (02:27)
  Thanks for having me, Michelle. I’m excited.

  Michelle Kesil (02:29)
  I

  think our listeners are going to take away from all of the knowledge and experience and education that you offer. So let’s dive in. First off, for those not yet familiar with you and your work, can you share what your main focus is?

  David Stockel (02:49)
  My thing focuses helping ⁓ investors ⁓ and educating them on the process of purchasing. Primarily ⁓ everything I deal with is new construction.

  Michelle Kesil (03:07)
  Great. How did you get started in this industry?

  David Stockel (03:12)
  I’ve been in the home building side since 1989 in the sale side. And quite honestly, ⁓ 2020, when the COVID hit, ⁓ my daughter was going to ⁓ UNT and she was stuck in the dorm. And ⁓ fortunately, the head of HR had reached out to me and said, hey, have you looked at the townhomes?

  in a community in Denton and I had not and we went over there and looked at the town homes and we bought one ⁓ rather quickly and ⁓ moved my daughter from ⁓ stuck in a dorm, not even be able to go to classroom into a town home and then we ended up having two more students rent with her and ⁓ that property we’ve owned since then.

  Michelle Kesil (04:11)
  Awesome. How did you expand from that first investment to where you are now?

  David Stockel (04:17)
  ⁓ I helped my in-laws on their first investment ⁓ about 25 plus years ago and then they had bought another investment.

  that wasn’t doing so well as a single family ⁓ home. And we were able to sell that home and do a 1031 exchange for a new townhome. And they wanted to get away from the single family property with all the maintenance and the headaches that they’ve had in the past. And they had seen the benefit since I’ve owned a townhome

  to invest. So we invested that money into a new town.

  out.

  Michelle Kesil (05:50)
  What are some of the main keys that you feel made the biggest difference in allowing your business to be able to grow and to run smoothly?

  David Stockel (06:00)
  Probably the main thing is again been affordabilities. know, the builders right now are offering incredible ⁓ pricing, incredible incentives for buyers. It’s been a buyer’s market for probably the last year and a half. ⁓ for investors taking advantage of, and we’ve seen a lot of investors taking advantage of the opportunities that builders have today.

  Michelle Kesil (06:34)
  Yeah, and are like the investments that you own the town homes or are there other type of investments that you’re taking part in?

  David Stockel (06:43)
  We do have one more property ⁓ in Fort Worth that we’re actually going to put on the market.

  And it’s been a single family home that one that we’ve had for 25 years and we’re actually gonna sell that and buy another. We really like the town homes because of all the maintenance and the care taken care of. And again, I’ve been to, ⁓ unfortunately been to court with tenants. So it’s never fun, but ⁓ it’s been a lot easier when you have a managed property

  and an association that’s looking after those things. So we’ve decided to basically move all of our investments into the town home realm in the last ⁓ several years. And it’s just been fantastic.

  Michelle Kesil (07:40)
  And all of these are in the Texas area.

  David Stockel (07:43)
  Yes, yeah, they’re all in the Fort Worth area.

  Recent purchase was buying one and was going to rent it out to my daughter and her fiance. And instead we gifted it to them as a…

  wedding gift and they were married on the 31st of December and because dad said hey if you’re gonna live together you need to be married so so we gifted them the ⁓ the down payment closing costs and now they live in a brand new town home and able to have ⁓ ownership and be able to build some equity and when if they start having a family and outgrow that they’ll be able to decide whether they want to sell that investment

  and take that equity and put it towards another property or keep it and rent it

  that’s gonna be entirely up to them. So that was a really heartwarming experience for us and pretty exciting. They were already engaged by the way. I just moved up their timeframe. But I’m a dad, so yeah. So we’re pretty blessed there.

  Michelle Kesil (08:48)
  Yeah

  That’s a nice dad.

  Awesome. So you mentioned that you help investors with their purchases as well. Can you expand on how that process works?

  David Stockel (09:09)
  I’ve done several ⁓ actually seminars to educate Mostly my target market is realtors and I’ve done several seminars having ⁓ Finance experts. They’re not just me I wanted to get the finance experts and mortgage experts that are doing these loans and all those things and let them ⁓

  understand what’s entailed and their different options. And in fact we had our first event probably summer of 25 and I’ve had several successful agents. One agent’s already sold three investors

  me and she had never sold.

  and rental properties or investment homes and all three of her buyers were first-time investors. So and I’ve seen a lot of pattern of that over the last six, eight months, seeing a lot of first-time investors entering the market. And I think it’s back to they’re seeing, okay, the real estate market, especially new construction has some great opportunities and

  It’s still one of the best investments we can do for long term. So it’s been ⁓ really heartwarming to see what’s going on and being a part of that over the last six to eight months.

  Michelle Kesil (11:20)
  Yeah, absolutely. And what are maybe some common challenges or obstacles that you support these people through as they’re starting this investment journey?

  David Stockel (11:33)
  Well, the biggest obstacle that I’ve seen with the investors is on a town-owned product, you have HOA fees. And HOA fees, for example, in the community that I’ve been helping them with are $325 a month. And when people see that, boy, they go, oh, gosh, that seems like a lot. But.

  What I have to do is educate them and say, if you look at a single family home and look at the insurance costs, just the insurance costs, and compare, you’ll see that insurance costs in Texas have really risen, especially anybody that owns homes. They’ve seen their rates go up. They’ve seen the mandatory 2 % deductible. So it’s really been educating them and say, well, your HOA, not only they’re insuring the building on the outside, but they’re also covering the maintenance.

  and the irrigation and you have property management. So you’re getting all that for that cost. And when some people see the numbers and actually I can do a comparison from a same value single family home and a same value town home.

  and show them that actually the townhome is actually more affordable because of the insurance factor, let alone we don’t know typically on a single family home what irrigation costs are and lawn maintenance. You can estimate those things, but I strictly show them just from an insurance standpoint that it is more beneficial. And then the other thing that I spoke about earlier is

  the relief of those headaches of if you’ve owned any single family rental properties that you have maintenance, irrigation, fences, all these things that have to be maintained and those…

  Unfortunately, renters don’t take care of as well as owners, right? So those are the big things that we have as far as single-family homes, some of those headaches that we have when managing single-family homes. So that’s why we’ve decided to move towards the townhomes as a family, but I’ve also helped ⁓ investors. ⁓ Sorry, somebody walked into my office here. ⁓

  I’ve also helped investors understand and again, any investor that has owned a single family home can relate to the issues you have with yards, fences, all those things that you have to maintain, especially the foundations if they’re not taking care of the watering and all that. Those are big things as far as owning those and they can be costly expenses.

  Michelle Kesil (14:28)
  Yeah, definitely. There’s a lot to consider. And what are you most focused on solving or scaling to next in your business?

  David Stockel (14:31)
  Mm-hmm.

  ⁓ We’re probably going to acquire at least ⁓ two more properties this year ⁓ and keep adding to our investment portfolio

  as a family. I’ve actually got my family involved in investing.

  Matter of that one daughter that was at UNT, she’s a business major, and now I’m actually gonna have her as my property manager and pay her instead of an outside source. So just trying to acquire some more properties and then help others by, again.

  Mostly experience-based from a first hand. And again, ⁓ it’s not always been great. So there’s always been challenges with investment properties, but understanding that typically these are longer term investments. ⁓ A lot of investors are maybe holding onto a property for five years when they can depreciate it and then they might flip it to another. And that’s kind of where we’re at on ⁓

  the property that we have in debt and we’re going to actually do that with that one. We’re going to flip that one into a newer property.

  Michelle Kesil (16:42)
  Awesome, that’s exciting. What are maybe some advice that you can give to those earlier on in their career that you wish you had as you were starting out?

  David Stockel (16:44)
  Mm-hmm.

  Boy, do your homework, especially as far as where, as they say in real estate, location, location, location, right? You’ve got to do your homework on where you’re buying the property. Do your homework on how are properties doing as far as rental income.

  how our property is doing as appreciation and know where to invest is a big one. Again, in the past, I purchased in some areas that didn’t do so well and, ⁓ you know, learn a lot of those things the hard way over decades. But the one thing is to really, I want them to not only…

  from me, but I want them to look at the market. You can look at the market through ⁓ many different, ⁓ Zillow’s, things and really be educated before they invest into ⁓ real estate because it is, ⁓ there’s risk in every investment, but what they really need to understand is it’s not a short-term investment.

  Michelle Kesil (18:18)
  Right. And when you mentioned like educating and doing the research, is that as far as like finding the right leads and properties?

  David Stockel (18:28)
  ⁓ exactly. And if I can’t help them, the reason why I target realtors as far as my number one marketing base is I’m blessed to have, ⁓

  thousands of realtors that have gotten known over the decades and if I can’t help them I’m going to refer them to the agent that knows that area that can help them more specifically and be more of a benefit. Quite often, ⁓ believe it not, I do refer out more business but I think that’s serving the customer the best. You can’t help everyone in your area and it may not be

  right for them, but surely you can help them in other areas and using those resources that I have as far as agents in my network is going to is been immensely helpful to to others for sure.

  Michelle Kesil (19:31)
  Yeah,

  sure, absolutely. The networking is such an important piece. Are you like working with any networking groups or how did you build your network?

  David Stockel (19:45)
  I have, there was a mastermind group in Southlake called Southlake Focus Group. They were going for about 20 years and they kind of fizzled off. Some of the agents have now retired, but ⁓ they’re actually, ⁓ there’s been several revamping. I’m actually going to visit one Thursday morning. That was one that I had visited in the past that is kind of revamping. ⁓ I’ve been with ⁓ a mortgage bankers group out of Fort Worth. I’ve attended some.

  networking. Again, a lot of education for them. know, those are finance experts. You for me, it’s very educational. ⁓

  It’s really not for me gaining business, it’s for me gaining knowledge to be more knowledgeable. when somebody asks me about something, by the way, if I don’t know, I’m going to refer them to that expert that does that for a living ⁓ because I am not a licensed mortgage lender or anything like that. So I refer them to those people that do that for a living. But I think this year, ⁓

  And then one of my goals is to do what we’re doing today is, ⁓ you know, do podcasting. And I think podcasting has really changed, ⁓ evolved over the last several years. It’s obviously become very popular. And what I see for me is I see agents doing a lot of the same thing on social media. And I said,

  And when I saw your company, ⁓ what they’re doing, Investor Fuel, I said, wow, I really love what they’re doing here. And I think that it’s very wise. And again, you have a array of investors and investment.

  tools and opportunities with your company. So I saw that and I said, wow, this is fantastic. But I personally, fact, going to be doing ⁓ another podcast with actually a ⁓ mortgage banker that I’ve known for years and I’m trying to help his business. So I’m going to be there trying to help him talk about the different terms and stuff as far as financing options when it comes to investment property.

  and let the expert, which is him, speak about it. Again, not myself. My whole goal is not to shine the light on me. My goal is to shine the light on others, especially…

  the professionals like again, my agents and my realtors and my lender friends and things like that, that I’m trying to help their business and help them grow. And as you know, you usually reap what you sow, right? So I’ve been very blessed with those relationships and over the years that have really helped me make some more sound investments and quite honestly, changed my family’s life.

  Michelle Kesil (22:56)
  Absolutely, that’s incredible. Yeah, there’s so many different people and networks to build relationships with.

  David Stockel (23:06)
  It’s key, it’s key to me. You know, people need to know, like and trust you, right? So, you know, are you, you know, I’m in new home sales. Are you just a salesman? Right? ⁓ And can speak with a silver tongue or whatever, or are you really truly caring about other people and…

  Michelle Kesil (23:12)
  short.

  David Stockel (23:29)
  trying to understand their situation and see if you can help them. And a lot of times, again, it’s, I may not be able to personally help you, but here’s a resource or here’s a person that can help you ⁓ get what you want because you got to find out what their situation is. And especially these first time investors. ⁓

  Most of them don’t know what they don’t know, right? And so that’s a key for me is to make sure that they get educated and understand what they’re doing. Because this is, you know, these are some big dollars that they’re investing in, especially they started accumulating quite a bit of real estate. And as we know, and all any of us have been in the market, it has its ups and downs.

  But luckily we’re in the great state of Texas where property values are still increasing. So blessed to be here in Texas for sure.

  Michelle Kesil (24:34)
  Absolutely. So before we wrap up here, if somebody wants to reach out, connect, learn more, where can people find you and connect with you?

  David Stockel (24:38)
  Mm-hmm.

  ⁓ They can connect with me. My personal cell is 214-212-5775.

  ⁓ I do get a lot of ⁓ realtors that do reach out to me, especially in matter of they may ask me about another property, another builder, things like that. And I’m going to give them my honest professional opinion, but I tell them in the end, it’s going to be up to you and your clients as far as that decision. If you want to email me, my personal email is [email protected]. [email protected].

  Michelle Kesil (25:23)
  Perfect, well, appreciate your time and your story. Thank you for being here.

  David Stockel (25:28)
  I loved it. I loved it, Michelle. Thank you for the opportunity. I’m very grateful.

  Michelle Kesil (25:32)
  Of course. And for the listeners tuning in, if you got value, make sure that you subscribed. We’ve got more conversations with operators like David who are building real businesses and we’ll see you on our next episode.