All Forum Posts by: Tyler Hodgson

Welcome to BP Henok! 

My office is in Coppell, so I know the area well. Luckily there are lots of sub-markets with duplexes within than 30-45 range. Although duplex inventory often gets gobbled up quickly! 

 Here are a few cities that come to my mind where I've seen others by duplexes: 

Irving, Euless / Bedford / Hurst, Arlington, Carrollton, Denton, East Dallas & Oak Cliff (maybe a little far from Coppell)

A few other quick tips: 

1. Conventional vs. FHA (2-4 Units): With your $100K down and $400K–$500K purchase range, you're in a solid spot. Since you're planning to occupy one side, don't overlook FHA with only 3.5% down or CONV with only 5% down.

2. Look Off-Market: Many good duplexes don't make it to the MLS. The right investor-friendly agent can get you into deals before they go public. Relationships matter big time in this space.

3. Consider "Rent-by-Room": If duplex inventory stays tight, a single-family home with 4–6 bedrooms can sometimes cash flow better than a side-by-side unit. This is becoming one of the more common house hack models I see in the DFW area right now.

You’re sitting on a goldmine with that 2.6% mortgage. I’d caution against refinancing out of that unless it’s absolutely necessary. 

Instead, I’d recommend looking into a HELOC (Home Equity Line of Credit). It allows you to tap into your equity without touching that first mortgage. You can borrow what you need, only pay interest on the amount used, and potentially recycle that capital once you refinance the BRRRR.

Hey Steven, welcome to the community and congrats on taking real action this time around. I’m also a CPA by background who made the leap into real estate investing and eventually the mortgage world (now a mortgage broker). That accounting foundation gives you a huge edge when it comes to analyzing deals, understanding risk, and navigating the financing side of things.

You’re already ahead by getting approved for hard money and connecting with wholesalers, but just a heads-up: not all deals from wholesalers pencil out the way they pitch them. Trust your numbers, not the flyer. And with hard money, the clock starts ticking fast so make sure you're exist strategies are solid and executable. 

Drew, props to you for diving in, analyzing deals, and approaching this the right way from the start! 
Just a quick word of advice: don’t wait on the “perfect” multifamily deal. Your first property is about getting in the game, building equity, and learning firsthand. From there, you’ll gain the experience and leverage to scale. Momentum beats perfection every time.

@Augusta Owens if you are looking in the DFW metroplex, viable tris and quads are harder to come by. I'd say just start your search with all 2-4 unit properties, and when you find one where the numbers make sense and it checks your other boxes (somewhere you actually want to live and house hack), then it probably makes sense. 

To determine price range, the first step is always figuring our how much you are pre-approved for; and that can vary significantly when you are looking at multi-unit properties because of the additional variable of rental income that can be included in qualifying. When I'm looking at potential opportunity, price isn't that big of a factor. Sometimes an $800k 4-unit could be a better return than a $300k 2-unit...or visa versa. 

Lastly, you won't be able to HELOC (or any cash-out equity) and 2-4 unit property in TX while it is still your primary residence. This is due to the extremely annoying TX 50a6 home equity laws. It's also unfortunate, that veterans (like you and I) can't do a cash-out refinance using a VA cash-out.

Hey Mike,

You're in a great position to start expanding, and your goal of owning 4-6 properties in the next few years is definitely achievable. Here are a few thoughts of mine, based on your situation: 

DFW Market: Overall, the DFW area remains one of the strongest real estate markets in the country. Even with some of the uncertainty in the broader economy, there are still pockets around the DFW metroplex that offer great opportunities for rental properties. While Denton is a solid market with steady demand from students, don't hesitate to explore other areas within DFW for potential deals.

Financing Options:

1. Conventional Mortgage: Since you have a good credit score and zero debt, you're well-positioned to keep going with traditional mortgages. As long as you're able to qualify for conventional loans, this will likely be your best option. The rates and terms are usually more favorable than DSCR loans, so I'd lean toward conventional financing while you can still qualify.
2. BRRRR Method: The BRRRR strategy can be powerful, but it might slow you down a bit due to the current cash-out refinance seasoning periods, which can be as long as 12 months. If you're looking to scale quickly, this could become a limiting factor. However, if you can find properties where you can add significant value, this method could still work well in the long run—it's just something to be mindful of in your overall plan.

With $160k in available cash, you're in a great position to start purchasing your next property or two. You don't need to tap into your current property's equity and that property sounds like it will be a nice cash flow cow once that ADU is completed!

Hey @Deborah Wodell, what a great thread this is, with lots of valuable insights from everyone!

When it comes to deciding between refinancing and selling, it really boils down to evaluating opportunity costs and understanding the potential long-term returns of each option. Here's how I break it down:

1. Analyzing the Current Property:
   • First, consider the equity built up in the current property. If it's substantial, and the market conditions are strong, holding onto it might continue to provide good returns. Check if the property’s current value has appreciated significantly. If yes, refinancing could unlock some of that value while allowing you to retain the property. This could be especially useful if you have high-cost debts to clear or other investment opportunities to fund.
2. Cash-out Refinance:
   • If current rates are favorable, or at least not excessively higher than your existing rate, and the cost of refinancing is justified by the equity taken out, this could be a smart play. It allows you to leverage your investment while still enjoying potential appreciation. The cash obtained can be used to diversify your investments or reinvest in renovations that increase rental yields and property value.
3. Selling the Property:
   • This option might make sense if the local market is peaking or if you anticipate a downturn. By selling at the top of the market, you maximize your returns and can reinvest the capital into more lucrative opportunities. Consider the tax implications, such as capital gains. Sometimes, using strategies like a 1031 exchange can defer these taxes while transitioning into another investment.
4. Highest Long-term Returns:
   • Generally, if the property is in a high-growth area, holding might offer better long-term returns through appreciation and rental increases. If the market is volatile or has peaked, selling and reinvesting in a more stable or emerging market could safeguard and enhance your returns.

In your case, if your current property has high equity and market conditions are favorable, refinancing might allow you to tap into that equity for other investments while still benefiting from potential appreciation. However, if the market has peaked, selling could lock in profits and provide capital to reinvest in more promising opportunities.

Ultimately, it's about aligning these decisions with your broader financial goals and market conditions. Analyzing the numbers closely and considering future market potential will guide you to the right decision. What’s your current market like, and what are you leaning towards?

Hi Sabuj,

Congratulations on your recent sale and your decision to invest in Texas! A 1031 exchange into a landlord-friendly state like Texas can be a strategic move, especially with your focus on appreciation.

1. Two Ten Communities Duplex in Buda:

• Duplexes can provide both appreciation and rental income diversification, which can lead to more consistent cash flow. Research the specific market in Buda and the historical appreciation rates for similar properties. Buda has been experiencing growth due to its proximity to Austin, which could benefit future property values.

2. Lennar Homes: Plum Creek (Kyle) vs. Whisper (San Marcos):

a) Plum Creek, Kyle:

• The corner lot and large backyard are attractive for families, and the high school district rating can positively impact property values and rental demand. Smaller square footage compared to Whisper as a 4 bedroom, which might limit potential rental income.

b) Whisper, San Marcos:

• Larger home with an extra study room, which is a valuable feature for potential tenants looking for office space. San Marcos is known for its college town vibe, potentially offering a broader rental market and the size of this one could be a good student rental. The higher price and only moderate school district rating could impact long-term appreciation compared to Plum Creek.

1031 Exchange: As Dustin mentioned, you can diversify by acquiring multiple properties under a single 1031 exchange. There could be a strategic way to tackle a couple of these options at the same time.

Scott, You may be leaning towards selling them because of property tax increase and major repairs. Have you disputed your property tax values with the County Appraisal Districts?

Given the low LTVs and the significant appreciation your properties have experienced over the years, a cash-out refinance could be a viable strategy for you.

Here are a few reasons why this approach might make sense:

1. Leverage Your Equity: By refinancing, you can tap into the equity that has built up in your properties without having to sell your properties and incur capital gains taxes. I know you mentioned potentially 1031 exchanges, but keep in mind that only defers the capital gains taxes. 

2. Benefit from Continued Appreciation: Real estate in Austin and San Antonio has shown robust appreciation over the years. By retaining ownership, you can continue to benefit from future property value increases.

3. Reinvest in Higher-Yield Opportunities: The cash from the refinance can be redeployed into other investments. Whether you're considering diversifying into multi-family units or investing in markets with lower property taxes, this capital can open up new opportunities. The combined cash flow and appreciation from these new investments could potentially surpass what you're currently earning, even if the immediate cash flow isn't as strong.

Your plan to house hack in Texas, sounds solid given the few details you've shared. Your liquid assets of $60k and solid income as a nurse should position you well.

For me, proximity to work is crucial. Sherman and Denison have hospitals, but also look into nearby cities like McKinney, Prosper and Frisco, which have growing healthcare facilities. It’s worth ensuring that your potential commute is manageable.

Something else you may consider is mid-term rentals. Mid-term rentals to traveling nurses or other healthcare professionals could be a lucrative niche for your househacking strategy. 

Texas has a lot to offer, and it sounds like you’re on the right track!