Duplexes in Lewisville, Texas (or North Dallas generally)

[Caleb Brake]

Hey BP community,

I'm a newish investor in Lewisville, TX. I bought my first home as a primary residence 2 years ago, and my first rental last year (exciting times). When I move out of my primary to rent it out, it def won't cash flow. And the more I look at the numbers in Lewisville, the more I'm seeing that rent prices are no longer keeping up with equity appreciation (which, in the case of me now owning a few properties, will be a good problem to have in a few years). That being said, I'm interested in small multi-family since it will likely cashflow positively (at least a little) from day one. The goal is to not eat losses every month for the next 5 years while I wait for rent and price appreciation. For context, my rent will just cover my PITI for my primary, nothing more--interest rate is 6.3% on a 300k home (so side question, are other people also just getting PITI covered by rent in North Dallas single-family homes, or am I just bad at this?? Might be a little bit of both).

My main question is for those who have invested in the Lewisville (or more generally North Dallas) area--do you know if there are many duplexes around? I've been scouring the inter-webs for duplexes, but it doesn't seem like that's really a THING in North Dallas. Am I looking in the wrong places? Or is there just too much land in Texas, so instead of building duplexes, people just keep building further east and north? Or maybe, that's just a function of suburbs in general, where they are designed to be comfortable (so defacto, no small multifamily)? I know there are some in Dallas proper closer to downtown, but I was curious if they existed in the more suburban/urban hybrid areas like Lewisville or Plano (though I'm pretty priced out of Plano for now).

Thanks for the help! Looking forward to connecting with others in the area!

[Bruce Lynn]

@Caleb Brake   I've been working and investing in this market for about 25 years now.  You're pretty much right on track.  Sounds like you are off to a great start.

#1 we have relatively few duplexes in the whole North Texas area it seems, compared to other parts of the country.  Same with 4plex. Rare do I see a 3plex.  When you said Lewisville, I'm almost scratching my head to think of the last duplex I saw for sale in Lewisville.

#2.  Not sure that is a true statement about 2-3-4plex cash flowing vs single family with traditional investor financing.  What I see in today's market you will need about 30-40% down to break even or cash flow....on any type of property.

#3 You are correct that on single family and small multi the rents have not kept up with appreciation (sales prices.)

#4 New is probably worse on ROI. Not sure who buys these, but often I will see something like $475,000 duplex sales price that maybe rents for $1400/side....some $1000/side. Unless you just need a place to park cash, I don't see how you ever make money on those. I get some low rent today and often it seems in 3-4-5 years the rents work themselves out, but how long does it take for $1000 rent to go to $2000 let's say on a 2bedroom 2bath unit in the less desirable part of town?

Every now and then you can find a gem, but it isn't easy.  I would stay open to all opportunities not just Lewisville and not just a certain type of property.