Dallas Market - what investment strategies are people using?

Question

Hi everyone,

I am interested in the Dallas Market for a long distance investing opportunity. I am not personally in Dallas but I have two friends currently living there and from my research so far, Dallas has a lot of good real estate indicators (population growth, good economy and businesses, demand, etc.). My first thought was to look into the multifamily market - that is where previously focused my efforts in New Jersey and have had success. However, Dallas seems to have much different market dynamics -- there is not really a great supply of multifamily homes here. I am also seeing single family and multi-family homes at price points that don't support great cash flow.

My question is, what strategies are investors typically using in Dallas? Is this mainly an appreciation play market? What other strategies investors using for good cash flow in the market? There seem to be a market that attracts alot of travelers, is airbnb a good option here? Curious to what people are seeing in the market.

Thanks in advance for your thoughts and opinions.

-D

Evan Hopple · Answer

@Dyllon G.Columbus, OH has the mix of cashflow and appreciation that you're looking for!

Michael Dumler · Answer

@Dyllon G., rent-by-the-room. Research companies such as HomeRoom and PadSplit for further insight. I highly recommend exploring this investment strategy if your focus is cash flow.

Jason Wray · Answer

Dyllon,

Best advice I can give is talk to an expert who knows the area and for that I would tell you to reach out to another Bigger Pockets member who is also an Agent in DFW @Lucia Rushton. I have worked with Lucia to help her buyers find deals close.

Dyllon G. · Answer

Thanks all for the great replies and information! Its seems like location is key, appreciation is the real play here and the alternative strategies such as rent-by-the-room is the pathway to cash flow in this market. Thanks all for the info. Don't be surprised if you receive a follow up DM from me.

Also, its nice to see the enthusiam for Columbus OH here as well. Go Buckeyes.

Lucia Rushton · Answer

@Dyllon G. We will always need LTR rentals. Will depend on your budget as to which part of the metroplex is best for you. You are not defined to proximity to either downtown.

Robert Ellis · Answer

Intel project was just put on hold

Shayne Hickey · Answer

@Dyllon G. Nice to meet you and I am located here in Dallas (Mckinney specifically which is a suburb about 30 minutes from Dallas proper. You are accurate on a lot of points you are making. On our personal Single Family investment homes we are able to barely cashflow with the higher rates with new acquisitions (we use commercial loans so our rates are prime +1%), but happy with with capturing some good equity on the purchase. As Dallas currently sits with where rates and prices are, it is more an appreciation play if you are buying in good markets. You can go to bad areas, buy cheaper, get cashflow but less desirable location will ultimately lead to less appreciation too. We always shoot for a healthy balance of the two.

We at one point had about 22 Airbnbs but that market has definitely become more saturated, a lot more competitive, city restrictions and fees have really increased for consumers. With that being said we have moved some of our properties to mid and long term rentals. We are always analyzing our properties to not just cashflow on STR, but also on long term (which I get is very hard).

Hope this helps man! I run the realtor side of our business (and help investor clients) and my biz partner runs our construction company for our investments (and clients). Reach out if I can be of further help with boots on the ground here.

Harrison Sharp · Answer

Agent and investor in DFW, i've sold over 50m here in the last two years. The best strategies for any type of cash flow are coliving/rent by the room (would recommend Homeroom for a passive hands off turnkey type investment that still will produce income), multi-family 2-4 units where a rehab/value add is needed, or buying a property with an ADU/Guest house and treating each unit separate unit.

Dallas isn't really a cash flow market anymore to be honest, you make your money here through appreciation. You need to go to tertiary markets like Sherman/Denison if you want cash flow.

Dallas Market - what investment strategies are people using?

Dallas Market - what investment strategies are people using?

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