Eight o’clock on a Wednesday morning and Brad Holden is getting richer. A real estate agent and broker who is, at 27, riding on an ever-rising wave of cash, Holden’s a point man for the California land rush sweeping Dallas and its environs. Standing now in the plush lobby of the Richardson Hotel, he waits until Arie Avneri, a weathered, fiftysomething, Israeli-born Californian, and his sister-in-law Nili Avneri step from the elevators into the lobby. Holden reaches for Arie’s hand. "Ready to see your houses?" he asks.

Arie owns a window replacement business in Los Angeles, and before boarding his plane for Dallas, he had two houses under contract in McKinney. That’s the way it’s done when you play with the Big Boys. You draw up contracts to buy houses before seeing them. You speculate. You make money, lots of money, mountains of money.

Now in Holden’s SUV, he, Arie and Nili, a stay-at-home mom who’s thinking of buying a few houses herself, head north on Central Expressway to the land of unlimited potential. Arie says financing might be an issue if he tries to buy the two houses he has under contract. Holden interrupts him.

"That’s not a problem, we’ll take care of that," he says. "You’re on my turf now. I’ll take care of you. We’ll do this Texas-style."

Holden explains how Frisco and McKinney are exploding in population and how nationwide, investors are speculating that the area could be the next Phoenix or Las Vegas—cities where real estate prices in recent years have tripled.

The numbers are convincing. In 1999, Frisco became the fastest-growing city in North Texas. From 2002 to 2004, home sales there jumped 35 percent, and the current population of 75,330 is rising at a rate of 10,000 a year. In McKinney—recently crowned the fastest-growing city of its size in America—the population, now approaching 100,000, has nearly doubled since 2000. In fact, thanks to these towns, 2005 will be the seventh year in a row that North Texas will set a record for new home construction.

Here’s the kicker: home prices have remained fairly constant. The median price in Frisco, at $207,850 last year, has risen no more than 7 percent annually since 2002. In McKinney, the median price has crept up only 1 percent in that time. "Homes at these prices won’t last forever," Holden says.

Up FM 720 in McKinney they go past corn fields and cows. Suddenly, homes appear, and Holden’s naming planned communities as his SUV passes them. Most have "Ranch" in the name, like Craig Ranch, which is a gargantuan 2,000-acre, master-planned development that includes a Tournament Players Club (TPC) golf course. "They’re supposed to be moving the Byron Nelson here in the next couple of years," Holden says. "This area’s hot." (Officials at the Byron Nelson say the tournament will stay in Irving through 2018.)

Moments later, Holden pulls his SUV into WestRidge, another master-planned golf-course community that, according to a recent market research study, is currently the second-highest-selling development of its type in the Dallas area. Soon the entourage walks through two four-bedroom/two-bath Cape Cod homes, with their symmetrical windows and shutters, their steep roofs with gables, their centered front doors, their large front porches. One house is priced at $136,000; the other is $145,000. Both offer about 2,000 square feet.

Later, in the sales office, Arie says he’ll buy the cheaper one. "I want something that’ll rent quick," he says. If that happens, and Holden assures him it will, Arie will return for another house, maybe even a third. Everyone laughs. Then papers are signed and the deal is done. "Next time," Arie says with a smile, "we’ll do this on the Internet and by FedEx." 

FROM MARCH TO SEPTEMBER, BRAD HOLDEN sold 85 homes in McKinney to investors like Arie. One day alone he sold 10. "It’s constant. Like every four or five days, I’ve got people coming out here from California, sometimes two and three a day," he says, still amazed himself. "They call up and say, ’Send me some information, and if we like it we’ll buy a couple.’ They act like it’s K-Mart or something, you know—that blue-light special thing."

Californians hope the Dallas market will one day be as hot as their own. In 1997 an average California home sold for about $172,000. Today, that same home sells for half a million. Many who bought in ’97 looked to Las Vegas, around 2003, as a new place to invest their equity. During the course of 2004, new home prices there increased by 39 percent.

When Vegas began to max out, the speculator stampede bolted for Phoenix. As the word "flipping" found a place in the national lexicon—referring to buying a house and then a short time later selling it for a high profit—nearly one out of every four new Phoenix homes went to investors. By the end of last September, the median home price in the Arizona capital had ballooned to $259,000—a 56 percent rise in less than two years.

Next stop: Dallas? Perhaps so. "Californians are coming here by the busloads," reports Bill Sabino, managing broker at RE/MAX Premier Group in Dallas. "Imagine you’re sitting in California living in a refrigerator box for $400K, and then you realize how much your funny money will buy in Texas. You can’t believe it. Every agent I know has a couple of California investors they’re working with."

Coldwell Banker Realtor Lou Moore says she gets calls and e-mails from Californians every week, and currently she and her business partner, Ken Morris, are working on finding investment properties for an entire family. "It’s really taking off," says Moore. "Many are still dipping their toe in the water, though. So far, they like what they see."

On the other end of the deal, real estate broker Cathy Haney of Orange County advises a group of about 30,000 investors. Her job: pairing investors with Dallas’ suburban builders and cutting deals on about 10 to 20 properties monthly. The National Association of Realtors says 10 percent of all purchased homes nationwide are pure investment. Haney sees Dallas-Fort Worth as a place to increase that percentage. "You’ve got all the right factors," she says. "You have a growing population, a strong and enlarging employer base, and a good affordability rate." An affordability rate means what percentage of residents can afford to buy an average home. In Texas, it’s 52 percent. In California, it’s 14 percent. 

Shari Zolna is a San Diego, California-based broker and consultant who bought her first investment property there in 1998 for $117,500. Six years later, she sold it for nearly $600,000, rolling the tax-free money into seven homes in Phoenix. She’s now doing the same thing with her Phoenix properties. "One house in Phoenix can turn into two or three in Dallas," she says. So far, she and her husband have seven homes in the Dallas area. Says Zolna, "There aren’t too many places near a major city where you can buy a nice, big, 2,000-square-foot home for under $200,000. But in Dallas, you can."

Salesperson Sarah Walker, of Craig Ranch in McKinney, says, "We sold out 135 townhomes in six weeks. And we’ve got 41 people on the waiting list." Nearly every building was sold to an investor. "Anyone who talks about the speculation market coming to Dallas doesn’t know what’s going on. It ain’t coming; it’s already here."

Even at more urban locations, investors are showing up. As many as 32 percent of the condos at The W, The Terrace, and The House, all being developed in the Uptown area by Hillwood Capital, have been purchased by investors. "We’re not selling to speculators, though," says Jonas Woods, Hillwood Capital’s president. "Most of our buyers are Dallasites looking for a long-term, solid investment. We have provisions in our contracts that keep buyers from flipping."

Coldwell Banker’s Moore sees all of Dallas real estate investment—both resale and new properties throughout the Dallas area—in this light. She predicts that speculators hoping to see Dallas take off like Vegas or Phoenix will be sorely disappointed. "We don’t have that kind of rapid growth here," she says. "Never have, never will." Moore and other real estate professionals point to plenty of undeveloped land and high property taxes as primary reasons that rapid growth won’t take hold.

Even Shari Zolna, who sends her clients to McKinney, Allen, and Rockwall to buy, cautions about the get-rich-quick idea of flipping. "When we bought in Phoenix, we intended to buy for the long term, and then it took off, so it was smarter to sell, but that was never our intention," she says. "Dallas is the same way. It’s going to grow steadily. But if the market dictates something different, we won’t hesitate to take advantage of it. We’re just not counting on that kind of experience every time."

Yet some people are. Take, for instance, the brash Brad Holden, returning from a weekend getaway in Seattle and saying, "Just now, walking to my plane, I sold four houses. I’m not even in town, working. It’s nonstop crazy."

Hal Karp is a contributing editor for Reader’s Digest. This is his first piece for D.