Looking to buy my first rental property! please help me think clearly.

[Muhammad Akhtar Shiekh]

Some background:

- I bought my primary residence in Frisco, TX in 2019 and then I moved to CA last year and rented out this property. So now I live in CA and manage my rental remotely.

My goal:

- I have 120K cash that I want to invest in real estate in DFW and looking for a good return in 5/10 years. I don't want to commit to add more money to the property on monthly basis that's why I am looking a positive (or a break even) cash flow. 

- I am looking into invest into a property that doesn't require much repair/rehab before renting it out and Ideally looking to buy in a neghbiourhood with good schools and commutable to Dallas downtown.

The Problem:

I primarily looked properties in Frisco/McKinney/Celina/Anna/Mellisa/Princeton areas and so far based on my research, I couldn't find any property that matches with my criteria that can also generate positive cash flow with 20% of down payment. Is my expectation to find positive cash flow in Dallas area in today's market is unrealistic? if no, please help me what I am doing wrong and where/how to look?

Thank you!

[Corin Prendiville]

The market has definitely gotten to the point where you will have a hard time getting a cash-flowing property with 20% down in an area with good school district and commute in North Dallas.

My recommendation is one of the following:

1 ) Broaden your search to include areas that may not have as good of school districts, focus on communities that are seeing an influx from out of staters or upward growth in population due to displacement and have higher or increasing home-ownership rates.
2 ) Consider increasing your cash investment to reach a positive cashflow if that is mandatory for your investment.
3 ) Consider investing in a REIT or REMT instead of a property, or reconsider investing that money in stocks as this isn't a bad time to be buying stocks.
4 ) Consider partnering with another investor who wants the same kind of deal as you and can pool finances to get the return & cashflow you desire. Make sure you consult a lawyer if you decide to go this route.

DFW has become a much more desirable and expensive area since covid and getting cashflow on a turnkey property is not easy in this market. If none of the options above work you could also consider scouting for a better location for your investing needs.