What should we do?

Question

What are people doing for real estate in this 2024 market?!

My husband and I are 28 and have two good jobs. We have been able to set aside some cash/savings over the past few years of marriage and are ready to invest in real estate. We would like to get started with our first rent home, but with the market in Dallas-Fort Worth, Texas I am having trouble finding good margins. The combination of the market and the current interest rates are making us hesitant, but at the same time we are eager/excited to get ready, and feel we have the cash to do so... Our goal in investing is long term benefits (we would like to plan for retirement and helping our kids get started as adults), also plan to gain passive income, maybe gain one property every other year or so.

Would love to hear insight and advice!!

Currently we are looking at the DFW market because it is what we are familiar with. Choosing location out of town has its own obstacles I fear.

Thanks,

Jordan

Kyle Mccaw · Answer

@Jordan McDonald I'm based in Dallas Fort Worth. There are properties that make great investments. You just can't expect to buy today what you could have bought a few years ago. I recently purchased a single family rental in Haltom City that cash flow enough to justify the purchase. Remember with every rental purchased you are planting seeds for a tree that will mature to provide fruit forever.

Nathan Gesner · Answer

It may be years before the market balances out. It may be a decade before we see what we had in 2014. Don't sit around waiting and miss out.

If the numbers don't work with 20% down, save up and put 40% down. Do what you need to do to buy a property that pays for itself (including reserves, maintenance, etc.), and then hold onto it. You will build experience, you will have a property that builds wealth, and you will be ahead of the curve when the market turns favorable again.

Bruce Lynn · Answer

DFW area has some of the best population and job growth in the country. So that is a plus. You see saavy real estate investors like Ross Perot Jr., continuing to invest in DFW including right in your back yard at Alliance Airport....he also owns that.

However you are right. Rents have lagged sales prices and probably will continue to do so in 2024 with the # of apartments coming online. Looks like that will get absorbed though and starting in 2025 there will be a big lag in construction and deliveries, so hopefully that will help us on rents.

For the standard deal now in DFW, break even or a little cash flow probably requires 30-40% down. Sure you can find better deals, but that is the common one I see.

There will be times when the market is great and sometimes when it is down, but very hard to time. I think the great investors like you just keep buying thru it all. I like your plan of 1 a year or 1 every two years. To me that is how the average person in the USA can get pretty wealthy. Tough to do that in the stock market and pretty rare to do as a performer/athlete, like 1% of the 1%, and for C-Suite again have to not only probably be good, but lucky to be in the right place, at the right time, at the right company, with the right opportunity. To me the biggest, easiest, and most accessible opportunity is with real estate.

Jordan McDonald · Answer

Thanks for the encouragement!

Preston Dean · Answer

Hi @Jordan McDonald

As a FW local I have a large investor list that I send out to my bigger pockets investors 2-3 times a week with flips or buy and hold deals that I come across on or off market.

I'll send you a connection request and maybe can help answer any questions you might have for the fort worth area

Chris Rich · Answer

Reason I ask, is, you may be living in your first rental. My wife and I were in the same situation end of 2022 where we were looking to acquire our first rental but also wanted to upgrade the primary residence. We debated buying a new build in Ocala or Palm Bay first and then the new primary later. But with our market and projected rental rates compared to our mortgage (with 2.99%) we decided the purchase price for a new primary would be more costly down the road than another rental. So we leveraged the $200,000 in equity to buy the new primary and transitioned the primary into a cash-flowing rental.

Just another option to consider because purchasing investment properties right now can be challenging given the rates and down-payment requirements for investment properties.

Jordan McDonald · Answer

Yes I own my primary residency and looking to buy my first property as a rental!

Chris Rich · Answer

Do you currently own your primary residence or are you looking to buy your first property as a rental?

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