Is Dallas Fort Worth overheated?

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Is Dallas Fort Worth overheated?

Ryan Knapp
Member since 2019 · 31 posts · 9 votes

Hey Bigger Pockets gang, 

I'm looking to start long distance investing in Forth Worth TX with the ultimate goal of BRRRing to build cash flow and equity and need your help! 

Currently I don't have much but I think I can make it work - I got 7k in the bank, an 800 credit score, and I've binged about 6-8 audiobooks. 

I also run a small business for some local entrepreneurs and understand how to manage people. I take photographs professionally and understand digital marketing as well.


My wife, baby, and I live in San Diego where I was raised although my wife is originally from Texas - Fort Worth to be exact. She's a true Texan at heart and we get to visit often. After many visits I couldn't help but love the place as she does and also feel like there might be some opportunity there. We did find a place for 350k in San Diego once - come to find out it was half burned down, literally!

Forth Worth seems to be a great place to start a business and I've noticed a lot of entrepreneurial energy is there. New coffee shops, retails, businesses big and small. Lots of blue collar work and hard working, real people which I appreciate. I'm from eastern San Diego and it actually reminds me a lot of home. Prices have risen I know but they're still dirty cheap compared out here. 

Is there still opportunity in Fort Worth? Is this a market that any one has seen success in? What are some specific neighborhoods? Is Meadowbrook an area I should pay attention to? I'm looking for strong opinions and to start making connections there. 

Appreciate you folks.

Best, 

Ryan 

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Cody Longmire
Real Estate Broker · McKinney, TX. · Member since 2019 · 7 posts · 2 votes
7y

McKinney, and our 380 strip west of McKinney is one of the fastest growing areas around. Expect to clear 4-6% ROI on cash buy and holds but you can expect your appreciation levels to be 2-3 percent over the next 5 years easily and Rental rates are increasing at similar levels. The long term hold will be your best investment in this northern area. Same goes for Frisco, Prosper, Celina and some areas of Little Elm. Flips are challenging to locate unless you're touring south and east Plano or Carrollton areas and buyers for flips are becoming more and more picky on the quality of the renovation. All and all still amazing opportunities to get into these markets.

-Cody

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  • Tyler H.
    Real Estate Agent · Fort Worth, TX · Member since 2010 · 208 posts · 70 votes
    7y

    Ryan,

    Best of luck in your endeavors. I think you'll need more cash to cover down payment and closing costs for an acquisition, depending on how you want to structure your first deal. Parts of Meadowbrook are ok, others are not. A lot depends on your investment strategy as well.

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Thanks for the response @Tyler H. That’s great insight. 

    Would you consider Meadowbrook to be a class C area? Are there other areas in Ft Worth that you feel like are up an coming and have a lot of potential for deals or places I should be scouting out?


    Thanks again 

    Ryan 

    0Reply
  • Kenneth McKeown
    Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
    7y

    @Ryan Knapp I actually use to live in San Diego for five years so I can definitely relate. I actually moved out of CA because of the cost of living. I knew I wanted a better quality of life and not be house poor my entire life. Fort Worth is definitely affordable and has pockets throughout that would be great for investing. What I tell most of my investors - it's dependent on what you're wanting to do. Will you be moving permanently and house hacking? Will you be buying an outright investment? Are you concerned about mostly cash flow or would you like more potential appreciation & better tenants? There are a lot of factors that come into play. The biggest I think right now is your capital. Unless you're buying a primary house - and even then you're a little short - you're going to have to work on saving a decent amount more to purchase your first property. BUT - you're here, and that's a great start!

    0Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    7y

    It sounds like you have a good foundation to build on. SoCal is amazing but like you said it's crazy over priced and has been for many years. I have a cousin that moved to Dallas, TX a few years ago. He loves it plus they drive to San Antonio and Austin for weekend getaways. I would continue reading books and listening to the BP Podcasts! 

    I think you need a niche in real estate to go after. Once you figure that out you could tailor the entrepreneurial energy towards it. 

    1Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Thanks @Kenneth McKeown that’s great feedback. 

    As of now hoping for a straight up investment. Modest appreciation (get slow rich) and some cash flow would be my hope! 

    You mentioned certain areas being good for investing and others not being. 


    What areas in your view would be the bets for investing and any to be more cautious in?

    Best, 

    Ryan

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Thanks @Jaron Walling. Great tips. 

    Single family homes in mid blue collar neighborhoods would be my hope. BRRR and flip and sell only if necessary. Otherwise B&H.

    Ultimately investing in some STRs in Dallas, San Antonio, and Austin would be a long-term dream. 

    Interesting that you mention San Antonio, have heard a lot of people recently talk about that location. 

    Best, 

    Ryan 

    1Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    7y

    Yeah San Antonio is really nice. I went with my grandpa 3 years ago and loved it. Probably cheaper than Austin and Dallas?? It could be the smart place to invest in SFR if that's your goal.

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Ryan Knapp you’ll need between 15-25% depending on what you pursue. I think DFW still has plenty of opportunity though! People aren’t going to stop fleeing the high tax areas for Texas.

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    0Reply
  • Anil Rathi
    Rental Property Investor · Austin, TX · Member since 2018 · 20 posts · 2 votes
    7y

    @Jordan Moorhead

    Is McKinney, little elm and other north Texas good investment spots? Looking for single family homes. I know central Dallas with Frisco and Plano are quite expensive.

    0Reply
  • Cody Longmire
    Real Estate Broker · McKinney, TX. · Member since 2019 · 7 posts · 2 votes
    7y

    McKinney, and our 380 strip west of McKinney is one of the fastest growing areas around. Expect to clear 4-6% ROI on cash buy and holds but you can expect your appreciation levels to be 2-3 percent over the next 5 years easily and Rental rates are increasing at similar levels. The long term hold will be your best investment in this northern area. Same goes for Frisco, Prosper, Celina and some areas of Little Elm. Flips are challenging to locate unless you're touring south and east Plano or Carrollton areas and buyers for flips are becoming more and more picky on the quality of the renovation. All and all still amazing opportunities to get into these markets.

    -Cody

    1Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Ryan Knapp you’re going to need more cash. No way around it

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Appreciate the straight forward-ness @Caleb Heimsoth.

    In the process of saving as much as we can. 

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    @Jaron Walling feedback I've heard is that San Antonio is still lagging pretty far behind DFW, Austin, and Houston. 

    Do you find that to be the case? Does it seem like it's headed the direction of Austin at all? 

    I know it's also huge. 

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    @Cody Longmire do you think those areas have a lot more promise then somewhere like Fort Worth? Do you think they have a leg up over FW? FW compared to Dallas still seems relatively affordable. All outside observations though and super curious. 

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Anil Rathi do you already own property in Austin?

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    0Reply
  • Anil Rathi
    Rental Property Investor · Austin, TX · Member since 2018 · 20 posts · 2 votes
    7y

    @Jordan Moorhead

    trying to purchase my first rental, in the process of actively looking and giving offers

    0Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    7y

    The market is hot but Texas is usually a great market. Have thought about doing rentals or San Antonio?

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    I have! @Roni E.   Feedback I’ve gotten is that there’s more industry and consistent work in DFW. 

    What do you like about SA as an investment market? 

    0Reply
  • Ronnie Williams
    Member since 2019 · 6 posts · 5 votes
    7y

    El Paso is hot right now, plus you have a major military base that isn't going anywhere. It is rapidly growing and improving, I'm really disappointed in myself for not buying 9 years ago when I was there when land was less than 3k for an acre and home prices were under $80k. Oh well!  

    0Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    7y
    Originally posted by @Ryan Knapp:

    I have! @Roni E.   Feedback I’ve gotten is that there’s more industry and consistent work in DFW. 

    What do you like about SA as an investment market? 

    If you look at San Antonio, it has done well during bad times and very stable.

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Gotcha good to know thank you @Roni E.!

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Ok I hadn’t thought of there but that’s great to know @Ronnie Williams. 

    Any recs on specific areas?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    @Ryan Knapp

    Ft Worth is cheap compared to the rest of the DFW area. I bought a 3-2 SFR in ft worth a year ago for 48k. It was a dump when I got it with a sec 8 tenant in place paying $600/month. I was able to fix it up and raise the rent to $1,400/month. It's near the Texas Wesleyan campus. Check out that area for props under 100k. You can find some cheap ones that need a little rehab. The values are coming up quite a bit in this area.

    0Reply
  • Ryan Knapp
    OP
    Member since 2019 · 31 posts · 9 votes
    7y

    Oh wow that's encouraging to hear. Thanks @John Morgan and great job.

    Do you mind if I ask roughly how much you spent on repairs?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Ryan Knapp:

    Oh wow that's encouraging to hear. Thanks @John Morgan and great job.

    Do you mind if I ask roughly how much you spent on repairs?

    I spent a total of 50k on repairs. I wasn’t anticipating spending more than 20k to get it up to speed. However, it needed everything including a new HVAC, roof, foundation, windows, siding, electrical panel, floors, remodeled kitchen and bathrooms. All those old beat up ugly houses you see for under 80k need all of that in this area.

    0Reply
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