Investment property in Northern Dallas area?

Question

Hi everyone! I’m a new investor having recently relocated to DFW as I now work from home. We settled at The Tribute, and I’m ready to start investing. What are the up and coming areas where I should be looking at? I hear Melissa and Celina a lot. But what’s the preferred destination where I may be able to squeeze some positive cash flow? We’re planning to finance with 20-25% down. Thanks a lot everyone!

Bruce Lynn · Answer

I'd focus on the areas between I35 and 75, north of 380 all the way to OK border.   Along 380 is some of the hottest residential development areas of the country, so just outside of that is likely in the path of progress.

Geoff Perkins · Answer

@Alex Belyarchik a big thing to be aware of is the property taxes and utility district taxes. Property taxes are similar in many ways to Washington but there are some very key differences that can make or break a property. If you aren't already aware, taxes can vary based on the part of a development because many of the developments cross city, county and school district boundaries and the entities may have drastically different tax rates. Also if there is a utility district the property taxes from that entity alone can be several thousand dollars a year. I live in Prosper and know first hand from trying to find a rental while our house in Celina is being built that both the rental and sales are both red hot and the market is poised for huge continued growth for the foreseeable future out here but that also means buying a good deal now is going to be very difficult to find.

Alex B. · Answer

Thank  you all for the great recommendations. I did think about the condos as well, but the HOA fees are usually higher, and I'd like to see the property appreciate within the next 10 years. I've had a great 3-year run with my own house back in Seattle, where it appreciated by 50% over 3.5 years, more than covering everything we had invested into it plus more. Hence, I'm looking to see if there are hot areas that have a solid potential for appreciation in the next 10 years or less. Frisco / McKinney are obviously the two cities that may have a good potential. And I now started to look at Sherman/Denison/Van Alstyne as Ashley suggested above. Is there anything I'm missing here? Any other potential areas I should look at?

Nick Brown · Answer

@Alex Belyarchik

A lot of good advice on these reply’s. Bruce as always I think is bang on on the areas. You seem to want cash flow. That’s great. But you need to take into account your ROI. You can make anything cash flow positive if you put enough down. North Dallas and surrounding area to Ok are tough for cash flow with good ROI. Have you considered condos? Appreciation on lower cost condos are not like SFH. But it does provide cash flow and a reasonable ROI.

Alex B. · Answer

Are there any specific areas that you recommend I should look at? Price range is around $200k - $400k.

Rob Lee · Answer

Welcome to DFW! The market is starting to slow down and the holiday season definitely presents an opportunity. However, if your relocation was the result of an industry change qualifying for financing may be a challenge. Reach out to a TX or national lender for preapproval before getting too invested in your search. IME, mortgage lenders have been easier to work with than big banks. Best of luck in your search.

Rob

JP Reese · Answer

Hi Alex,

My name is JP Reese and I'm the Business Development Manager at HomeRiver Group leasing and property management. I would love to chat with you about investing in DFW. Funny part is, I also live in The Tribute. :-)  I would love to connect with you.

Ashley Hust · Answer

I agree with Bruce to look all the way up to OK border. Per Amy above, great info, but Frisco and McKinney may be tough to hit those numbers as well.... Princeton maybe, but I would honestly start turning your attention towards Sherman/Denison/Van Alstyne. Maybe even Sanger (and just north of Denton) a little further west. I have more and more clients that are ok with being further out of the city with work from home being more of a reality.

Amy Wang · Answer

The SFH median sales price/DOM for Celina in Oct is 550K/8days, and the median lease price/DOM is $2725/17days. For Melissa, they are 424K/5days and $2397/10days. The lease and sales markets in Collin county are hot. Is your down payment $180k and $380k or the house price? The inventory in Celina and Melissa are tight with more competitors. You could also consider Frisco, McKinney, and Princeton.

Alex B. · Answer

Thank you all! For the budget I was thinking between $180k and $380k. I’ll have to finance. However, looking to see if I could squeeze a little bit cash flow looks challenging the closer I get to $380k mark and higher. I see rents usually are $1 per sq ft but that gets lower with the higher cost of the property.

Investment property in Northern Dallas area?

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