Best Place to Invest in DFW Texas Area?

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Best Place to Invest in DFW Texas Area?

Andrew Threet
Member since 2020 · 37 posts · 13 votes

I'm looking to buy my first multifamily investment property in the DFW Texas area within the next 3 months, any suggestions or insights on what areas I might have the best opportunity to find a CoC of anywhere between 8-12%?

I'm looking to buy anywhere between 150k-350k.

From the research I've done so far I know North of the Dallas area are where the better neighborhoods and appreciating areas might be. However multifamily listings are harder to come by in these areas. And I've seen a good majority of listings for multifamily come up more West of Dallas in the Forth Worth and Arlington area, that could even fit my numbers a bit better.

However I'm not too familiar with the market. Could anyone provide any insight on what the Forth Worth market is looking like? Is this an area on the rise for Texas. Or would it make more sense to be more patient and wait for a deal to come up in the North Dallas area? Or is there another area of DFW entirely that I should be looking at instead?

Any insight would be greatly appreciated!

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Michael Myers
Investor · Pleasant Hill, CA · Member since 2019 · 58 posts · 21 votes
6y

@Andrew Threet, I'm also looking to purchase in the DFW area in the next few months. The market is definitely hot, and small multifamily is even hotter. That being said a duplex in need of a cosmetic rehab did just come across my radar that looks reasonable at ~$200k purchase and a 10-15% CoC ROI from our underwriting, so it is possible.

The areas we are focusing on are Southwest FW between highway 30 and 35W, as well as Central/West Arlington and south out to Kennedale/Mansfield.

Best of luck!

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  • Lucia Rushton
    Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
    6y

    @Andrew Threet. The small multifamily market is very competitive right now.

    Are you looking for turnkey? If not, how much work are you willing to do?

    Fort Worth is a strong rental market as is Arlington, most of the school districts are not as good as areas of North Dallas and the surrounding suburbs.

    Out of curiosity, why are you picking DFW?

    1Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    6y

    $350k of equity? Are you looking at duplex or 4 units? You're unlikely to find 12% CoC...better to go to a smaller city like Wichita Falls and buy there.

    0Reply
  • Michael Myers
    Investor · Pleasant Hill, CA · Member since 2019 · 58 posts · 21 votes
    6y

    @Andrew Threet, I'm also looking to purchase in the DFW area in the next few months. The market is definitely hot, and small multifamily is even hotter. That being said a duplex in need of a cosmetic rehab did just come across my radar that looks reasonable at ~$200k purchase and a 10-15% CoC ROI from our underwriting, so it is possible.

    The areas we are focusing on are Southwest FW between highway 30 and 35W, as well as Central/West Arlington and south out to Kennedale/Mansfield.

    Best of luck!

    4Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Lucia Rushton:

    @Andrew Threet. The small multifamily market is very competitive right now.

    Are you looking for turnkey? If not, how much work are you willing to do?

    Fort Worth is a strong rental market as is Arlington, most of the school districts are not as good as areas of North Dallas and the surrounding suburbs.

    Out of curiosity, why are you picking DFW?

    Hello Lucia, I'm not necessarily looking for turnkey (however I'm not completely opposed to the idea) I'm willing to put in the work, my biggest concern is the amount of time I have.

    And to be honest I don't have that great of a reason to picking the DFW area. I'm a first time OOS investor and I know Texas is great area but I also don't know too much. So I was able to do some research and settled with focusing in on DFW, but I'm not completely married to the area and I'm open to looking into other areas as well if someone more knowledgable can point me in the right direction.

    1Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Ronald Rohde:

    $350k of equity? Are you looking at duplex or 4 units? You're unlikely to find 12% CoC...better to go to a smaller city like Wichita Falls and buy there.

    Hello Ronald, I haven't settled on how many units so it could be anywhere from 2-4. It more so comes down to how the numbers add up for me. I haven't looked into Wichita Falls yet though so I may have to look into that then. Thanks for the input!

    0Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Michael Myers:

    @Andrew Threet, I'm also looking to purchase in the DFW area in the next few months. The market is definitely hot, and small multifamily is even hotter. That being said a duplex in need of a cosmetic rehab did just come across my radar that looks reasonable at ~$200k purchase and a 10-15% CoC ROI from our underwriting, so it is possible.

    The areas we are focusing on are Southwest FW between highway 30 and 35W, as well as Central/West Arlington and south out to Kennedale/Mansfield.

    Best of luck!

    Hello Michael, I'm also an OOS investor from the Bay Area so it's nice to connect with you. 

    From what I saw, there are a few around that price range that I saw as well. I'm just not too familiar with the area. I'd definitely like to keep updated with how things go for you and your search though. Thanks for the input!

    1Reply
  • Rob Lee
    Real Estate Broker · Dallas, TX · Member since 2016 · 248 posts · 240 votes
    6y

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

    2Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

    Thanks for the input Rob. I'll definitely keep my eye out in those areas then. I was able to get a prequalification done so hopefully that helps put me a good position to strike when the opportunity comes. 

    0Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    6y
    Originally posted by @Andrew Threet:
    Originally posted by @Ronald Rohde:

    $350k of equity? Are you looking at duplex or 4 units? You're unlikely to find 12% CoC...better to go to a smaller city like Wichita Falls and buy there.

    Hello Ronald, I haven't settled on how many units so it could be anywhere from 2-4. It more so comes down to how the numbers add up for me. I haven't looked into Wichita Falls yet though so I may have to look into that then. Thanks for the input!

    Sounds good, let me know if you have any legal questions (LLC, contracts, or Lease)

    0Reply
  • Brad Piper
    Real Estate Agent · Dallas, Ft. Worth · Member since 2020 · 52 posts · 27 votes
    6y

    Andrew, to give you something specific: I would look around North Dallas: Farmers Branch, Addison, Lakewood, and definitely Richardson. These are areas of Dallas that have some age to them, which will allow you to get properties a little cheaper, and it also means you'll be able to find some value on multifamily properties. If you go into more residential areas further west, you'll find more single-family areas, and if you go further north of Dallas, you'll find newer cities that aren't outstanding for investors.

    1Reply
  • Austin Sine
    Real Estate Broker · Kansas City · Member since 2019 · 86 posts · 43 votes
    6y

    @Andrew Threet Oak Cliff, Denton, and Garland are a good bet for that price range. Just know that likely for deals to pencil you will have to do some rehab work. 12% CoC is pretty steep.

    What's your investment strategy? Are you financing this deal? Understanding these questions will really help identify which markets are worth your time. 

    0Reply
  • Jon Shoop
    Property Manager · Dallas, TX · Member since 2020 · 109 posts · 79 votes
    6y
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

     I agree with Rob. Dallas and North Dallas are probably out of your price range if you want good returns. I might even look towards Forney but Ft. Worth and areas west I think are hotter than east of Dallas.

    0Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Brad Piper:

    Andrew, to give you something specific: I would look around North Dallas: Farmers Branch, Addison, Lakewood, and definitely Richardson. These are areas of Dallas that have some age to them, which will allow you to get properties a little cheaper, and it also means you'll be able to find some value on multifamily properties. If you go into more residential areas further west, you'll find more single-family areas, and if you go further north of Dallas, you'll find newer cities that aren't outstanding for investors.

    Thanks for the input Brad, I'll definitely have to give these places a look! When you say going West, are you talking about going into Arlington and Fort Worth area? I've been trying to see if there are areas in those cities that I should be paying attention to.

    0Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Austin Sine:

    @Andrew Threet Oak Cliff, Denton, and Garland are a good bet for that price range. Just know that likely for deals to pencil you will have to do some rehab work. 12% CoC is pretty steep.

    What's your investment strategy? Are you financing this deal? Understanding these questions will really help identify which markets are worth your time. 

    Hey Austin, I've looked into Denton a bit for some mutifamily properties but those are pretty hard to come by, I'll definitely have to give a look to the others as well now.

    I'm looking to most likely do a low down payment and try and house hack the first year. Or try to do a purchase as a second residence and go with as low as a 10% down. Would this narrow anything down as far as areas go?

    0Reply
  • Andrew Threet
    OP
    Member since 2020 · 37 posts · 13 votes
    6y
    Originally posted by @Jon Shoop:
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

     I agree with Rob. Dallas and North Dallas are probably out of your price range if you want good returns. I might even look towards Forney but Ft. Worth and areas west I think are hotter than east of Dallas.

    Thanks for the input Jon, I don't think I've looked into much of Fourney yet but I've looked into Fort Worth. My biggest concern with that is just finding an area in Fort Worth that is still in a good enough neighborhood to attract the right kinds of tenants. Any suggestions on which areas of Fort Worth I should be paying attention to? 

    0Reply
  • John Thomas
    Member since 2020 · 5 posts · 2 votes
    6y

    Most of my DFW clients look for homes in mid-cities - good prices, lots of demand.  I have not funded a loan in DFW in a few months, but that is mainly because I have been focusing on other markets.

    0Reply
  • Jon Shoop
    Property Manager · Dallas, TX · Member since 2020 · 109 posts · 79 votes
    6y
    Originally posted by @Andrew Threet:
    Originally posted by @Jon Shoop:
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

     I agree with Rob. Dallas and North Dallas are probably out of your price range if you want good returns. I might even look towards Forney but Ft. Worth and areas west I think are hotter than east of Dallas.

    Thanks for the input Jon, I don't think I've looked into much of Fourney yet but I've looked into Fort Worth. My biggest concern with that is just finding an area in Fort Worth that is still in a good enough neighborhood to attract the right kinds of tenants. Any suggestions on which areas of Fort Worth I should be paying attention to? 

     Probably the suburban areas then like Argyle, Roanoke, Benbrooke, Weatherford.

    0Reply
  • Tushar P.
    Member since 2019 · 332 posts · 171 votes
    5y
    Originally posted by @Jon Shoop:
    Originally posted by @Andrew Threet:
    Originally posted by @Jon Shoop:
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

     I agree with Rob. Dallas and North Dallas are probably out of your price range if you want good returns. I might even look towards Forney but Ft. Worth and areas west I think are hotter than east of Dallas.

    Thanks for the input Jon, I don't think I've looked into much of Fourney yet but I've looked into Fort Worth. My biggest concern with that is just finding an area in Fort Worth that is still in a good enough neighborhood to attract the right kinds of tenants. Any suggestions on which areas of Fort Worth I should be paying attention to? 

     Probably the suburban areas then like Argyle, Roanoke, Benbrooke, Weatherford.

    What about suburban areas west of Fort Worth, like Willow Park? Or is that too far out in the suburbs?

    0Reply
  • Chance B.
    Haltom City, TX · Member since 2021 · 36 posts · 16 votes
    5y
    Originally posted by @Tushar P.:
    Originally posted by @Jon Shoop:
    Originally posted by @Andrew Threet:
    Originally posted by @Jon Shoop:
    Originally posted by @Rob Lee:

    Arlington/Fort Worth would definitely be your area of focus. DFW does not have a large number of small multifamily properties.  Our current market has pretty low inventory right now. It's a very competitive environment. Every property is getting multiple offers. The key is to be ready to execute when you see what you want. As you probably know, offers without a prequalification letter will not be considered. Good luck in your search.

     I agree with Rob. Dallas and North Dallas are probably out of your price range if you want good returns. I might even look towards Forney but Ft. Worth and areas west I think are hotter than east of Dallas.

    Thanks for the input Jon, I don't think I've looked into much of Fourney yet but I've looked into Fort Worth. My biggest concern with that is just finding an area in Fort Worth that is still in a good enough neighborhood to attract the right kinds of tenants. Any suggestions on which areas of Fort Worth I should be paying attention to? 

     Probably the suburban areas then like Argyle, Roanoke, Benbrooke, Weatherford.

    What about suburban areas west of Fort Worth, like Willow Park? Or is that too far out in the suburbs?

     Forgive me for asking, but what is OOS? Is it owner occupied?

    0Reply
  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    5y

    @Chance B. OOS = Out Of State

    McCaw Property Management4.4902 Reviews
    WebsiteView Page
    0Reply
  • Chance B.
    Haltom City, TX · Member since 2021 · 36 posts · 16 votes
    5y

    Oh,  thank you! 

    0Reply
  • Elin Trinh
    Honolulu · Member since 2020 · 134 posts · 51 votes
    5y

    @Andrew Threet - Best of luck from a fellow out-of-state investor!!

    0Reply
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