All Forum Posts by: Austin Sine

@Angelina Essuman Welcome! In addition to some other markets mentioned - I would take a look at West Dallas, Near & around White Rock Lake (easterly), and Denton. 

If you ever have any Dallas specific questions feel free to reach out.

Good luck! 

@Young Kim Speaking on behalf of Dallas. As other mentioned FHA loans require active employment. With that being said If you can house hack $50K is 100% enough to get into a few up-and-coming neighborhoods in Dallas. You also have to consider a rehab cost outside of the down payment if you're looking to add value/bring the units up to snuff.

Happy to discuss further if you have any Dallas related questions.

Hey @Antonio Barnes!  I would definitely recommend checking out @Hayden Harrington meetup. I have attended several times and always left with a strong connection.

Other than that, my advise is to not let others here discourage you about the Dallas market. Yes, the majority of deals are pricey, but there are still good deals out there. Tons of opportunity for house hackers and creative value-add.

Happy to help if you ever have any specific questions. Good luck!

@Janene Avery You're definitely on the right track. I would recommend  speaking with as many people locally as you can. I know everyone says this but try and bring them value upfront, understand what they may need. Also, underwrite, underwrite, underwrite. Every day analyze deals so that you can identify a no-brainer deal when you see it.

I'm always happy to help. Feel free to reach out if you have any questions. 

Good luck!

1) What else (if anything) is driving this new construction?

General demand is up. New developments and massive companies (i.e. Uber HQ) opening around the corner. This pocket was one of the only areas near the Knox/Henderson corridor to remain untouched. As you mentioned recently new development is taking over. 

2) Is this area worth considering for a MFH investment (based on a criteria of 5% COCR, purchase price of $500k-$2 mil), or are there better areas to consider?

I think you could. How large are you looking to go? There are other areas that are better IMO but again depends on what you're looking for.

3) How can I learn more about this particular area to understand it better?

Speak with professional (brokers & property managers). 

@Alex Hymanson I would look on the other side of 75 at some of the opportunities in the Henderson Corridor & Lower Greenville area. I know there are some duplex properties in Lower Greenville/Lakewood area that might make a bit more sense on a return basis. 

@Kay Kay Singh If you find a deal that fits your investment criteria/return profile, and you can meet lender requirements (conservative due to COVID) then the time is now. A few reasons;

1.  lock in low interest rates (sub 4%)
2. inflation hedge (QE!)
3. avoid potential tax revisions (increased cap gains tax) under new leadership
4. equity market uncertainty

If the market tanks and you're holding a great, conservatively financed property you should be OK. Your future self also now has a track record and can take advantage of the distressed assets coming to market.

With that being said - I would avoid taking on heavy repositions/flips (as mentioned) and wouldn't be surprised by increased taxes (you can u/w a fudge factor).

Hope this helps! Good luck!

@Eduardo Calle

Echo everything above. @danny randazzo mentioned this already but I really like to use breakeven occupancy. I would also stress test. Run the deal on a worst case scenario. What happens if things get rocky and you can’t increase rents for a few years, capex comes 20% over budget (which it will), taxes increase, R&M is 20% over the years prior? If the deal still breaks even at w/e leverage you decide than you can feel at least more comfortable with the deal. Also don’t forget reserves!

I'm keeping my eye on 80% LTV deals as the year progresses.

@Greg Dickerson

Yes - especially if a heavy reposition or larger apartment deal (not sure what the OP is looking at). Actually wouldn’t pay much attention to comps at all for these projects on initial analysis.

I believe GRM can be effective to achieve a general understanding of neighborhoods. Provides real data to compare one neighborhood to another. Only relevant for small deals of course (2-4 units). And not to be used independently.

@Steve Morris Yes agreed, no corners cut. Huge commitment. Make sure to get every detail in regards to finances (income & expenses) and be sure to have knowledge of the market and costs. The equation itself is simple but the numbers that go into it are not.

When initially analyzing a deal I think its best to keep it basic and then add all the "fluff". Does it work or not? If it works after your simple analysis then add the fluff. If it still works post fluff. Do the deal. 

Re GRM - thanks for clarifying. I included GRM as I'm not sure how pricey property is in OP's market. A portfolio four 2-3 unit deals could run as high as $7M in some cases.