Real Estate Investment & Ownership Strategies in Texas

A Guide for Investors, Homeowners, and Agents

Texas continues to be one of the most dynamic real estate markets in the U.S., offering investors and property owners a wide range of tools to grow, protect, and leverage their assets. Whether you’re a first-time investor or a seasoned property owner, understanding these strategies can help you build wealth while staying compliant with state and federal laws.

Below are 11 of the most powerful real estate strategies every Texan should know.

1. 1031 Exchange (Like-Kind Exchange)

What it is: An IRS program that allows investors to defer capital gains taxes when selling one investment property and reinvesting into another “like-kind” property.

Key Rules: Identify a replacement property within 45 days, close within 180 days, and use a Qualified Intermediary (QI).

Why it matters: This allows wealth to compound through reinvestment — without paying capital gains taxes every time you sell.

Investor Tip: Pair a 1031 Exchange with cost segregation or BRRRR strategies to accelerate your growth.

Form: IRS Form 8824

2. Opportunity Zones (OZs)

What it is: A federal incentive created by the 2017 Tax Cuts and Jobs Act to promote investment in economically distressed areas.

Benefits: Investors can defer, reduce, and even eliminate capital gains taxes.

Texas Tip: Many Opportunity Zones are located in Houston, Dallas, San Antonio, and rural counties. OZs are a long-term play (10+ years) designed to reward patient capital.

How it works:

1. Sell an asset and realize a capital gain.

2. Reinvest that gain into a Qualified Opportunity Fund (QOF) within 180 days.

3. Hold for at least 10 years to make new gains completely tax-free.

Tool: IRS Opportunity Zone Map

3. Homestead Exemption (Texas-Specific)

What it is: A Texas law that reduces property taxes for homeowners and protects a portion of home equity from certain creditors.

Benefit: Lowers annual property taxes and provides legal protection.

How to use: Apply through your county appraisal district after moving in, between January 1 and April 30.

Form: Texas Comptroller – County Appraisal District Directory

4. Cost Segregation & Bonus Depreciation

What it is: A tax strategy that accelerates depreciation on components like flooring, HVAC, or appliances.

Why it matters: Generates large upfront deductions that free up cash flow.

Pro Tip: Combine with BRRRR or 1031 Exchange strategies to keep more capital working for you.

Key Note: Hire an engineering-based cost segregation firm and file using IRS Form 4562.

5. The BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

What it is: A method to scale a rental portfolio using the same capital repeatedly.

Steps:

1. Buy undervalued property

2. Rehab it

3. Rent it

4. Refinance based on the new value

5. Repeat the process

Why it works: You build equity, pull it out through refinancing, and reinvest.

Texas Tip: Works best in affordable markets like Waco, San Antonio, or East Texas.

6. Texas Property Tax Protest

What it is: Every Texas property owner has the right to challenge their county’s appraised value.

Why it matters: Reducing your appraisal can save thousands annually.

How to do it: Protest online or by mail before May 15 (date may vary by county).

Resource: Texas Comptroller’s Protest Guide

7. Co-Ownership & Fractional Investing

What it is: Multiple investors share ownership via LLCs, Tenancy in Common (TICs), or partnerships.

Best for: Multifamily, land, or commercial assets.

Why it matters: Reduces entry cost, spreads risk, and opens access to larger deals.

Pro Tip: Always draft a written operating agreement outlining ownership, profits, and exit plans.

8. Veterans Land Board (VLB) Programs

Who it’s for: Texas veterans and active-duty military.

Programs:

• Land Loan: Up to $150K, 1–20 acres, 5% down.

• Home Loan: Low-rate VA-backed mortgages.

• Improvement Loan: Up to $50K for renovations.

Why it matters: Offers benefits even for land under five acres, something the VA doesn’t typically cover.

More Info: Texas Veterans Land Board

9. Texas Series LLC

What it is: A legal structure that allows investors to create multiple “mini-LLCs” under one parent LLC.

Benefit: Each property is isolated for liability protection.

Why use it: Cost-effective way to separate risk across multiple holdings.

Caution: Maintain separate books and bank accounts for each series to preserve protection.

Form: Texas Secretary of State – Series LLC Guide

10. Historic Preservation Tax Credits

What it is: State and federal tax credits (25% + 20%) available for rehabilitating historic buildings.

Where: Downtowns and revitalization zones, perfect for boutique hotels or mixed-use spaces.

Why it matters: Can offset up to 45% of rehab costs.

Form: Texas Historic Preservation Tax Credit Program

11. Seller Financing & Wraparound Mortgages

What it is: The seller acts as the lender, offering financing directly to the buyer.

Wraparound Mortgage: The seller’s loan remains in place while collecting higher payments from the buyer.

Why it matters: Opens the door for buyers who can’t qualify for traditional financing and allows sellers to earn interest income.

Legal Requirements:

• Must comply with Texas Property Code §5.016 and Dodd-Frank Act.

• Full disclosures required; always involve a real estate attorney.

TREC Form: Seller Financing Addendum (Form 40-9)

Texas real estate offers nearly endless opportunities, but the best investors and homeowners are the ones who understand the tools available to them. Whether you’re deferring taxes through a 1031 Exchange, protecting your assets under a Series LLC, or claiming your Homestead Exemption, knowledge is leverage.

If you’re ready to explore which of these strategies fits your goals, whether as a buyer, seller, or investor, reach out, and let’s develop a roadmap tailored to your next move in the Texas market.

📍 Adriana C. Perez, REALTOR® | The Trochilidae Group at Surge RealtyTX License #829146🌐 www.thetrochilidae.com📧 adrianacperez.s@gmail.com

This content is for educational purposes only and complies with TREC, NAR, and HAR marketing guidelines. Always consult legal and tax professionals for specific advice.