New to Texas - Markets for Multi Family Properties to House hack

[Bryan L. Ramirez]

Hello Everyone,

I am a first time investor and CPA from California working to start my investing journey by investing in multi-family properties. I am considering out of state investing opportunities, and would like to explore investing opportunities in Texas. My initial strategy is to house-hack with an FHA loan on a duplex/triplex and scale up from there on my second and third properties. What markets in Texas (Austin, Houston, Dallas, San Antonio) would you recommend are the best for multi-family homes (2-4 units) in the $250- 600K range? Thank you in advance for your advice.

[Bruce Lynn]

So are you moving to Texas? FHA is for owner occupied properties only.

Otherwise you'll probably need to look at conventional.

Just be aware too that the podcasts make it sound easy, but the strategy is quite difficult right now.  Due to huge runup in sales prices, versus slower rent grown, most multi 2-3-4s we see don't cashflow, unless you put significant money down.   Not impossible to find, but difficult to say the least.

For example not unusual in DFW market at least to see $400,000 duplex with $1000/month each side in rent. You can probably use your modeling spreadsheets to see what down payment you will need to make your PITI and reserves for vacancy and capex.

Lots and lots and lots of cash offers for property like that, so seems to be plenty of people with cash they need to park.