DFW Property Prices for SFH long term

[Tim Carpenter]

I've started trying to build a portfolio of SFH in DFW and am noticing that most of the properties that I'm looking at (HEB area, Keller) have doubled in value in a 4 -6 year span which makes me think current prices are not realistic. I am also having difficulty getting anything to cash flow with current sales prices and the CAP rates are barely high enough to cover bank notes with 25% down. Does anyone else think current prices are inflated and unsustainable for the near term?

[Bruce Lynn]

With Keller I think you've picked one of the most popular places on the West side of the metroplex.  More people than homes available...so instead of the 3-4-5% appreciation, the lower priced investment type properties have probably gone up 10-12% a year the last 3-4 years.  My guess is like yours, that rate will drop back down.  Rental prices have not kept up with the purchase prices.  So are right, it is tough to find homes that cash flow well, but they are out there.  You just have to look harder and maybe in different areas.    Hopefully your rents will rise over the next few years and you'll like your numbers better.

As most investors will tell you, the best time to buy is yesterday.  I don't think you can wait for a significant drop in the market as it may never ever come for investment type properties and if it does, the time is very tough if not impossible to predict.  

You might look at places like Decatur or Justin or Ponder or Boyd.   You might find a little better pricing there and town seems to be growing that way.  Still plenty of companies either in the process of moving here or thinking about moving here.  Think about Tesla.   Where will they put their HDQ and factory?   How many people do they have?  That's just one.