Has Dallas Housing Prices Completely Lost Touch With Reality???

[Christopher Winkler]

After moving to Dallas, I thought I would give investing locally a try to augment my note business. I am glad I did not quit my day job, as the supply has been reported as 1.9 months, and many houses sell same day they are listed, or that week. Combined with the plethora of professional and semi-professional wholesalers gobbling up any and every property, I am having a difficult time to find something to wholesale. 

Got an email today with the subject: NEW!! Great deal in Dallas!! Act quickly!!

http://www.investordeals.com/listings/723-10th-st-...

Its a 86 year old 2/1 rental in SW Dallas that is going for $299,900.00, and rents for $975.00. Based on buying defaulted first liens and having to foreclose in other states, I would not pay more than $50k for this in 95% of the country, if that much. They are not even listing an ARV for the property because this market is completely out of control, and I guess overpaying does not matter any more?

I also have learned from Bigger Pockets that a 1% rate of rent to Value is desired. While they are not giving an ARV, dividing the rent by the purchase price is not even a third of 1% (0.00325).

At that rate, it will take 25.6 years to make a dime on this, if you use your own money. Forget about financing it or the fact that what goes up, must come down. At some point, who knows when, there has to be some sort of correction to this bubble. 

What do other investors think about this market or "Great Deals" like this??