DFW Fourplexes and Duplexes | 2024
The Dallas-Fort Worth market is not known for its duplex and fourplex opportunities.
For comparison, the Killeen-Temple MSA, with a population only 4% of that of Dallas, had nearly 50% of the duplex/fourplex transaction volume as did DFW in the last 12 months.
Nevertheless, would-be duplex and fourplex buyers need not despair. Depending on your area, a 2-4 family building can still be an excellent opportunity, for house-hackers and conventional buy-and-hold investors alike.
Below is my 2024 report for the DFW market:
I will share some of the highlights here!
Duplexes
Duplexes are shrinking in total transactions, perhaps partly resulting in increasing upward pressure on prices.
A recent low in duplex purchases are for cash, perhaps reflecting the reduced returns on unlevered purchases until rents catch up to prices. With higher interest rates, owner occupant house hackers may be making a larger share of buyers, leaning on more favorable financing terms.
The 1980s was a popular decade for fourplexes and duplexes alike, being the most common year built for resale duplexes.
But there are still some new construction duplex communities to choose from.
The 5% cap rate (using the 50% rule) seems to be the sweet spot at which duplexes are selling. Homes under that are not selling or their listings are failing altogether.
Fourplexes
Fourplex prices have been stable since reaching new heights in 2021.
But that is on a very small sample size, as fewer than 100 fourplexes have sold in the entire DFW area in every year since 2021.
Unlike SFH graphs, fourplexes have had reasonably stable days on market and SP:LP ratios.
And like duplexes, fourplexes very seldom are selling in distressed condition. Finding a value-add discount will likely continue to be difficult for the foreseeable future.
4.5-5% cap rates are the sweet spot at which fourplexes are selling.
Counterintuitively, failed listings show the best gross rents and cap rates. It likely is due to slower selling among fourplexes with higher price points ($1.5-$2M) for which higher cap rates are desire
Next Steps
Download the entire PDF here!
DFW 2-4 Family 2024 Report
I am an investor-friendly real estate agent who has personally bought and sold fourplexes in Texas, and would be thrilled to help you with your investment acquisitions and dispositions needs!
Comments