DFW market and what works here?

Question

Hello everyone,

Just a very general question. What strategies are working in DFW (especially in this stage of the market cycle).  Also what area of DFW would you say is best for investing?

Jessica K. · Answer

HI Yaldho,

Are you going to manage the properties yourself, or hire a property manager at 10% the rent each month? DFW is a great market, and there are good deals all over the place. Yes, Texas has higher property taxes, but the prices are great and people are moving here. Every state has its pros and cons.

For me personally, I have a couple rentals in Mesquite that have great cash flow. The house next door to one of those properties is owned by an investor who has over 40 properties in Mesquite, and he swears that he'll never try another city because it's working so well for him. I know some folks that will only invest in Plano or Frisco because of the appreciation and there's more demand there.

I saw one of your other posts, and it looks like you're new to this concept and really excited about financial independence. The best advice I can give you is to not worry about finding "THE BEST DEAL!" and just do a deal. The first one is the hardest, I promise. Go sit down with a realtor (I know a couple great ones in DFW if you want to send me a message) and ask them to run through numbers with you on some available properties. I think you'll be surprised how easy it is to buy a house and rent it out once you get started.

Good luck!

Dustin Mathenia · Answer

@Yaldho Manoj

Like people have been saying very broad question. I would say you can cashflow in any city in the DFW. If cashflow is what you're after it's not hard to find. I bought a double wide in a lot in Keller for 40k cash I'm renting it for 1450 a month -560 for lot rent. That's good cashflow! But downsides no chance of appreciation. I can't leverage the property so my cash is just tied up. Upside there's a lot of park offered amenities a full time staff watching at least the exterior of the property. I planned on getting more but parks do not like investors! so not easy. If you go the normal route of trying to by SFR to brrrr that will be a little tricky looking on the mls like the other million investors here. You really need to get out there find your own deals. Get creative! I don't think in a 30 year timeline there are any bad deals inside the metro. I moved here 2 years ago and when I was watching the market then you could pick up 60k houses in Arlington, Desoto, grand prarie, all day! tons to chose from 2 years later.... good luck finding one for under 120! People say the markets cooling off or leveling out but I don't see it! My average DOM for my flips is 4 !

Ethan Yuan · Answer

I'm interested in hear more about where ya'll think what you think about the current appreciation/rent trends and the best areas. In recent years, Dallas has turned from a cash flow city into a equity city with the influx of people moving to Dallas because of jobs. I feel the price of houses has increased significantly more than rent prices. Most rent prices are around .06%-.09% of listing price. (And this isn't the northern suburbs). I find it is hard to get a 10% cap rate on most houses on the MLS. I've seen Garland and Mesquite mentioned. Where else do you look at and how are you finding these houses? Are these off market?

Ronald Rohde · Answer

At this stage in the cycle, go light on leverage and be sure you can support vacancy.

Robert Johnson II · Answer

The Price-to-rent ratio makes it a little difficult right now IMO. I’m not finding a lot of deals that meet the 1% Rule. I’m actively looking in Garland and feel like i need to change my strategy to focus on finding off market properties (I’m looking on MLS), so I can see better cash-flow and CoC return.

Garland is a great city in general, and there is demand for rental properties. I think the trick is finding the right deal or creating the right deal. If you can find a deal, I think Garland is a good place to invest long term. I live here now and the city is actively investing in infrastructure, bringing in new companies/jobs, community betterment and all that kind of stuff.

Yaldho Manoj · Answer

@Lucia Rushton , good point.  End of the day, you have to analyze the numbers yourself.

Do you agree that nowadays the best deals are found off market?

Lucia Rushton · Answer

@Yaldho Manoj make sure when they are off market that you know what you are buying. While there are good wholesalers in Dallas, we have an abundance of wholesalers and not all know how to price accurately nor know the true cost of repairs.

Yaldho Manoj · Answer

I agree, it will be very difficult to get good cash flowing deals from MLS. I think finding deals that are off market is the way to go (easier said than done).

Yaldho Manoj · Answer

@Robert Johnson II

I live in Mesquite and it's definitely good to know that about Garland. Are you using BRRRR?

Yaldho Manoj · Answer

@Ronald Rohde

Thanks for that tip.

DFW market and what works here?

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