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Updated over 5 years ago,
Would you do this deal? Supply and Demand Analytics
Hello BP! I really need help on this one. I'm considering building a new 4-plex as my next deal and it would be a house hack of course. I'm located in Weslaco, TX (Very South Texas). There's been much growth in the Rio Grande Valley/McAllen area due to many factors and so far I've had solid returns with my 1st 4-plex here, but it was a value add deal with substantial equity built in.
These new construction plexs I believe would be in the B-class category. They are being sold between 325K-360K. With some networking I made some solid connections and I can purchase for about 300-310K. These plexs consist of 2x 2/2's and 2x 3/2's. The 2 bedrooms 2 baths go for 850 and the 3 bedrooms 2 baths go for 950 bringing gross rents to 3,600. The numbers definitely meet my criteria and 1 house hack 4-plex is well below my own risk tolerance.
These new construction plexs I believe would be in the B-class category. They are being sold between 325K-360K. With some networking I made some solid connections and I can purchase for about 300-310K. These plexs consist of 2x 2/2's and 2x 3/2's. The 2 bedrooms 2 baths go for 850 and the 3 bedrooms 2 baths go for 950 bringing gross rents to 3,600. The numbers definitely meet my criteria and 1 house hack 4-plex is well below my own risk tolerance.
From my understanding this market has seen steady growth for decades and is not necessarily affected like the larger Texan cities from market fluctuation. But it seems like just about everyone is preaching to practice cautious investing right now, hence my hesitation.
My question is if I were to look to purchase multiple new construction plexs what risks should I be considering? What analytics for supply and demand should I be aware of? What indications tend to precede a market surplus? I'm still a newbie and I've never analyzed real estate at this level and appreciate any help.