Looking to purchase SFH or MFH near TCU

[Jered Lui]

Hi Everyone, 

My name is Jered and I am looking for some information about the Fort Worth/Arlington area. My cousin is a nurse who works at the Baylor Medical Center but will soon be attending TCU for a graduate degree in in nursing. He is currently renting and will be looking to house hack, most likely with an FHA, in 2023. His start date at TCU in Aug 2023 and is looking to have his home purchased/move-in ready before then.

My wife Erin and I will be partnering up with him for the deal and we are looking to find out some information about neighborhoods in both Arlington and Fort Worth. For the sake of a sound buy and hold investment, we are looking for MFH or a SFH to rent out room by room (ideally to TCU students). Our budget is around a $350-400k.

Any all of information would be greatly appreciated. Here are some specific questions I've looking to get answers to.

1.) What are some "up and coming" neighborhoods in Fort Worth and in Arlington? 

- Done a little research and spoke to a few realtors in the area and have heard good things about Arlington Heights , Westcliff, and Benbrook in Fort Worth. And in Arlington, I am looking at the Pantego and Southwest Arlington.

2.) It seems like MFH are hard to come by in Fort Worth and Arlington so maybe finding a SFH and renting out room by room to other college students would work as well? What are the pros and cons of doing either?

3.) Does it even make sense to look in Arlington if my cousin is going to be attending TCU?

Thanks in advance for all of your help!

[Bruce Lynn]

Lots of ideas here....

Around TCU is very expensive....so sometimes rent vs price doesn't always make sense. Rent is probably a little low vs sales price of homes. My guess though is most TCU students would want to live closer to the campus if they can. I doubt many look in Arlington for housing. I'm guessing FHA will be very tough in that area. Just too many cash buyers and too many strong offers, that FHA has very little chance of working. Possible, but not probable. FHA might work in Arlington right now depending on what you want to buy.

One question I would have is what do you do with the house when cousin graduates?  How long is school?  If you tell me 2 years and then he is on to someplace else, then that's probable not a good idea.  You just have two much expenses for buying and selling, and appreciation is likely slowing.  So you have to think about exit strategy.

You've picked some good areas I think for the most part.  Lots of investors don't like Benbrook for some reason.  Maybe city is too hard on them.  Also while Pantego is a nice place, I would not buy a rental property there.  No one calls looking for property in Pantego.  Fort Worth yes, Arlington yes...but even though location is decent, I'll bet it takes longer to rent, and probably rent prices are lower.

I'd ask your cousin about Arlington and if he is willing to make the drive and have him ask his colleagues that will rent from him if they are willing to drive? I'm guessing though if he wants to use FHA, might be easier in Arlington than right in TCU neighborhood.

One thing I caution everyone on is cosigning on a loan.  Occasionally this works out, but I see over and over and over it creates big problems.  I've had several instances this year of people having issues with co-signing.  One actually lost their house.

If possible you should try to take it down yourself...and maybe give your cousin discounted rent or something for managing the place.  Not sure that is even a good idea as he may be busy with school.  Maybe you charge him rent and if he manages successful give him an equity cut when you sell.

One trick is your exit strategy....if you have 3 people involved...think 3 years from now 5 years from now 10 years from now...20 years from now.   Who is the decision maker on who sells?  Everyone has to agree.  What if he wants to live there for 5 years, but you need your money back in 3?   What if he gets married and divorced?...and now his X wife needs 1/2 his money, so he is forced to sell his interest?  Could you buy his equity out?  What if you're in a situation where you don't want the capital gains that year?  What if it is a down year, and you'd think you'd make more money by waiting a year to sell, but court is forcing sale or buyout?