North Dallas/Garland Duplex

[Marco G.]

Thanks in advance for your thoughts: Currently in escrow on a duplex in Dallas/Garland area. Just got inspection back and condition is a bit lower than expected. Units are all occupied, and leased at $1095/unit, consistent with the area. My PITI will be at $1370 with 25% down that I am mostly getting from a HELOC on principal residence. Plus $220/month management and $200 maintenance/utilities puts me at about $1800/month on $2190 rent. Already I can see one AC unit and water heater that will likely need to be replaced in the next year, and the fixtures all need updating as well. Some slight honey combing was observed on the slab foundation and gutters need to probably replaced. Windows need to be resealed and roofs are about 10yrs old, with some cracks observed in the roof supporting wood. Given the condition revealed by the inspection, my initial response to run but want to make sure I'm not overreacting. For those familiar with the area and given the rents, what are your thoughts on value/price? I'm not concerned with value appreciation, rather cash flow I can use to pay down the HELOC and add units down the line. What price/conditions would make this a good deal, even ignoring the HELOC pay down (I can manage it using cash flow from other properties if things get tight)? If super interested I'd love to PM inspection report for your impressions! Thanks!

[Michael Delpier]

@Marco G. Betting on appreciation in today's hot market is just speculation. IMHO, this is not a good plan. If this was San Francisco or New York, I could see it. But not in Texas. My advice is to buy for cash flow in texas.