Looking for my first deal in DFW

5 Replies

Hi BP,

I'm completely new to the world of real estate investing and I'm looking for my first deal. I've spent the last couple months listening to Bigger Pockets, getting to know my local market (Dallas), and researching financing deals and other processes. I plan to use hard money and private lending to fund a flip. Is anyone willing to give me some general advice. I've been analyzing Zillow listings incessantly for past month but I'm trying to find a way to expedite the process. Should I absolutely be talking to a real estate agent even when looking for value add properties? I feel like I could ramble on for a while but maybe someone can provide with my next (really first) actionable step. Anything specific to DFW would be great.

Thanks,

Colby

@Colby Fogg I can give you the complete unbiased opinion as I'm an agent who tends to stay clear of flips. I'm pretty "anti" HML and private lending... since in the DFW market the homes that come about are just not good enough to make me want to go out and use other funds. Personally I'm more of a buy and hold investor/extraordinaire.

Do you need to work with an agent? Absolutely not. Would it help you? It really depends - agent to agent... some agents will say they are "investor friendly" or know what they're talking about - when in reality they don't. It's going to be hard to find a flip opportunity ON MARKET - most of the deals that people are snatching up are off market - and even then... if they're good enough to be flipped, why is a wholesaler giving you the opportunity to flip them? Obviously the quick $5-10k may be nice - but if anyone knows what they're doing... and an opportunity falls into their lap where they can make $50k or more - it's definitely worth the work.

Anyways, at the end of the day... no you don't need an agent if you know what you're doing and you have a good network of people. However - it's not bad to network with agents and find someone who can help you - especially if it's your first deal. And no - I'm not marketing myself :) I prefer to stay far away from flips.

@Kenneth McKeown Thanks for the response! I do agree with you, anything an inexperienced individual like myself can find on Zillow is probably still on market for a reason. I'm definitely interested in flipping houses in the future and right now it just seemed like the most "exciting" way to get into real estate. However, I would also love to find a multifamily that I could move into or a house that I could hack as I'm currently still renting. I like the idea of buying something that needs a little work, living in it/fixing it up for a couple years , and depending on the future market, selling it or renting both sides out when I move. What are your thoughts on the renting market in the DFW?

@Colby Fogg there is one thing we can all assure ourselves - and that is people will always need a place to LIVE. That's why I like rental properties - I know that I will be able to always have someone pay me for living in my property. Having someone pay down my debt, have tax incentives, and also have potential appreciation are all a great benefit of buy and hold properties. In regards to the rental market here - I've not had any issues with renting my properties - you just need to make sure to buy in an area where the price makes sense... and/or an area that the price reflects the desire to live in that area.

Originally posted by @Colby Fogg :

@Kenneth McKeown Thanks for the response! I do agree with you, anything an inexperienced individual like myself can find on Zillow is probably still on market for a reason. I'm definitely interested in flipping houses in the future and right now it just seemed like the most "exciting" way to get into real estate. However, I would also love to find a multifamily that I could move into or a house that I could hack as I'm currently still renting. I like the idea of buying something that needs a little work, living in it/fixing it up for a couple years , and depending on the future market, selling it or renting both sides out when I move. What are your thoughts on the renting market in the DFW?

 Unless you have some experience with construction or real estate, I would probably stay away from flips in Dallas for your first investment.

Basically whatever budget you have and however long you plan on the project taking, double both.  

Our first flip, we ran over by 30K or so.  and we finished our flip the week before thanksgiving, so it didn't sell until Feb the next year.  Luckily we had reserves and outside cash flow we could bring to the project.  But had we begun on a shoestring, our flip could have sunk us.

In addition, DFW is a very tight market, the wholesale properties we see being put on the market are too thin for us to make money. I doubt many are actually making a real profit in this area flipping properties.

Personally I think house hacking is the best way to get started, have someone help you buy and pay down your property.

The whole buy and hold mentality gives you more room to make a mistake and not have that mistake sink you.

@Colb Fogg

Dallas is very tuff market to flip in as @Bart H. has said. I have been buying 3 to 4 flops a month for the last two years and reselling them to buy and hold investors. HGTV has increased my net worth like crazy. My advice is the same, start with a house hack. It's the safest way to get into real estate investing.