Is the real estate market in a bubble?

[Mariano Wahlmann]

My business partner and I decided to start investing (buy and hold) recently in the DFW area, and we noticed that most of the properties end up in a bid war, often selling about asking price. Single family, Multi-units, it doesn't matter.

For single families I can understand a future home owner falling in love with the property and paying above market price for a property, but for investors I honestly don't get it. We have target a 10% ROI (including equity for loan amortization) and properties end up selling at prices that would make returns on the 4-6% range (after all expenses, mortgage and capex). Our reasoning is that you can get an average 7% return on the stock market more passively therefore if we going to get active we need to be compensated for.

Are our targets unreal? or we are in a housing bubble?