Duplex or SFH in Northeast Dallas

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Duplex or SFH in Northeast Dallas

Juan A. Ortiz
Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes

My wife and I are working towards moving into a house within the next 4 months or so being that interest rates are so low. We currently live in an apartment in the Plano area. I work remotely and the wifey works in Richardson. The game plan is to move closer to the Richardson area (Garland, Richardson, south Plano, etc).

Our initial plan was to purchase a duplex and House Hack; but we are leaning more towards a SFH. The plan is to live in the home 1-2 years, make some minor fixes, then rent it out. Price range is between $150K - $225K.

The reason being...

I know SFH tend to appreciate much better than duplexes. Also, from my understanding, duplexes are not as popular on this side of town. Lastly, most families are looking for a SFH as opposed to a duplex.

I’d love your input on a good marketplace, thoughts on Duplex or House Hack, and any other advice.

Look forward to everyone’s response!

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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
5y

Congratulations....and good work.   You can always keep open the option of duplex, but it is tough to find the right situation these days with duplexes.  Single family is probably your best bet.  Exciting times in DFW area right now.

Best Wishes.

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  • Paul Gomez
    New to Real Estate · Dallas, TX · Member since 2020 · 33 posts · 13 votes
    5y

    So do you plan to rent out the other bedrooms in the SFH? You mentioned house hacking but just wondering. I know friends who have done it.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Paul Gomez, that would be nice if I were on my own; but now that I have a wife and soon family it would be very difficult to rent out by room. So as of this moment it would be a SFH just for my wife and I. Appreciate you for getting back to me!

    0Reply
  • Paul Gomez
    New to Real Estate · Dallas, TX · Member since 2020 · 33 posts · 13 votes
    5y

    @Juan A. Ortiz

    I was in your shoes about 6 years ago and barely convinced my GF, now wife, at the time that we should buy I house. Looking back, house hacking with an FHA loan is such a killer way to get in the game that it's so worth it. It gives you a huge head start. Home will appreciate of course, but there's nothing like having someone pay your mortgage. Do you have a best friend or family member who could live with you? Take a second to think about it. After all you only get to purchase a home for the first time, once. Good luck.

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    5y

    Congratulations....and good work.   You can always keep open the option of duplex, but it is tough to find the right situation these days with duplexes.  Single family is probably your best bet.  Exciting times in DFW area right now.

    Best Wishes.

    2Reply
  • Richard Helppie-SchmiederPro Member
    Flipper/Rehabber · DFW · Member since 2020 · 374 posts · 208 votes
    5y

    @Juan A. Ortiz Hey man! Something that my wife and I did 4 years ago when we were newly married was convert a room in our house to an airbnb. We were fortunate enough to have a home with two masters and didn't have to change the layout at all. We were grossing about $1,000/monthly with it. So, if you find a house with a separate MIL suite or something similar. It may be a good way to get your foot in the door. If you have flexibility on purchase price, you can find them pretty easily. 

    Would love to connect you with a friend that helps people find these, as well as invite you to a local area meetup I host the first Saturday of every month in N. Dallas. Send me a PM and great to hear you're getting started in real estate.

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Paul Gomez

    Very true, there are so many perks to purchasing a Duplex; but do you think it’s worth it in the Northeast Dallas market?

    If it were Colorado, I would definitely lean more towards a duplex; but I'm just not too sure of the market for a duplex here near Plano/Richardson area is as popular or highly sought after compared to a SFH. That's my only concern.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Bruce Lynn

    Hey Bruce, I appreciate it!

    Definitely a lot of opportunity here in Dallas.

    Yeah, it definitely looks like SFH are more desirable in the Northeast Dallas area. I still think House Hacking is probably the best way to either cash flow or live dirt cheap on the other side. I'm looking at both types of properties right now.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Richard Helppie-Schmieder

    Hey Richard, that’s also true!

    We definitely thought about doing that...

    I think it would all depend on the property; but It's looking like the wifey and I are pretty set on either purchasing a duplex (rent out one side) or SFH for ourselves and fix it up to rent it out a couple years later.

    Always great to connect!

    0Reply
  • Paul Gomez
    New to Real Estate · Dallas, TX · Member since 2020 · 33 posts · 13 votes
    5y

    @Juan A. Ortiz

    Perhaps from a pure investment (no hacking) it's not worth it in that area of town. But if someone offered you the cheapest rent you could find in NW Plano and told you that you could also own this property, wouldn't you take it? Oh and for next to nothing down. Sounds like a awesome way to "get ahead" given your position to use an FHA. Also keep in mind that will make you less competitive in terms of making an offer, so keep it in mind.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Paul Gomez

    That’s a great point!

    I’ll keep my options open for a solid duplex deal. Hopefully, things start to come together a bit more when I get start up the loan application. Really appreciate the advise.

    By the way, how is the Pro Subscription. Do the calculators come in handy or do you think I can calculate everything on my own with other online calculators?

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    @Juan A. Ortiz If you are able to find a triplex or fourplex and you have the financial bandwidth to acquire and the emotional space to manage tenants, I think you will thank yourself later. 

    That's what exactly what we did: started with a duplex and then bought a SFH when we started having kids and I wanted to stretch our house hacking days as much as possible lol.

    Now, if you look at the future and you are thinking of having more properties then wouldn't it be better to have units located more densely meaning in a building as much as possible? 

    All that said, I can totally relate to the fact that you might want to start a family soon and might want a SFH, so it really all depends on you, your wife and your investing goals.

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Ola Dantis

    Hey Ola,

    That’s great insight!

    It’s definitely sounds best to take advantage of House Hacking while we are still young and with no kids.

    I am working with a realtor right now and we are keeping our options open for both Duplex and SFH.

    I know I can advertise myself; but what else should I take advantage of when getting tenants into the other side of the duplex?

    Who else should I work with?

    1Reply
  • Jeffery Callis
    Rental Property Investor · Knoxville, TN · Member since 2020 · 51 posts · 40 votes
    5y

    @Juan A. Ortiz

    If SFR's are appreciating. Why wouldn't a duplex in the same area?

    I would still do a duplex unless it’s a not having enough capital thing.

    Nothing wrong with a SFR but for scale. It's easier to scale with more more doors.

    Just my 2 cents.

    1Reply
  • Onan Dumas
    Investor · Rowlett, TX · Member since 2013 · 132 posts · 72 votes
    5y

    @Juan A. Ortiz

    Hey brother congrats on your start in real estate, it will be a fun and frustrating one and completely worth all of it along the way.

    Here’s my take on Duplexes up to Fourplexes in in the Dallas area.

    I’ve found the the Dallas Market right now is appreciating too much for rents fo make sense unless you are paying cash and are looking for equity appreciation. The rents vs what people are asking for just don’t add up to have good cash flow. Don’t expect to live in it completely free and have the other side pay the mortgage. It can happen but you’d be finding one that you’d have to bring in a lot of swear equity into to make the numbers work. However, since you’ll be living in it you’ll be able to eat some of the mortgage and still come out on top in some sort of way. Again, just be ready to pay some of that mortgage too (but you’ll even out some with write offs, plus appreciation etc.)

    You won’t find any triplexes since that’s not really a thing in Dallas, but you’ll find the Duplex/Quadplex sitch.

    In the Northeast Dallas area though, you’ll find that many of those types of housing will be shady areas so you need to prepared to move your family in there. I’m not sure what your budget is but you’ll be dishing out some coin if you want to be in decent neighborhoods.

    I would absolutely do a duplex/quadplex if you are prepared to be in the 500k on up prices for those otherwise I'd probably just stick SFH, you'll still appreciate very well in Northeast Dallas.

    1Reply
  • William Moya
    Property Manager · Land O lakes, FL · Member since 2016 · 72 posts · 61 votes
    5y

    @Juan A. Ortiz I am also not big on the house hacking personally because when I was in the Army I had to she my living quarters with others and I am suffer from OCD lol. I couldn't do it. But that said If possible I would consider buying the duplex, renting out one side and if you happened to have a situation where you have to live to a SFR shortly after buying the duplex, rent out the other side. Both sides should cash flow. Then buy the SFR for your family. You might have to reach out to your lender to see if there are restrictions on buying at a certain distance from your duplex, restrictions, etc. Now you'll have 3 units working for you. Best of luck.

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Jeffery Callis

    Hey Jeffery,

    I think both duplex and SFHs will appreciate over time; but from my understanding, a SFH might appreciate much more and more quickly than a MFH.

    At the same time, if I were to go with a duplex I could potentially reap the benefits of lower mortgage payment, cash flow, and equity in the long run.

    Thanks for the advise👍🏽

    2Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Onan Dumas

    Hey Onan,

    You make a lot of valid points!

    The market is a little out of wack right now. I would need to find a really nice deal to go with a duplex. I definitely see how I could benefit from a duplex much more than a SFH; but it would need to be the right price.

    I’m definitely keeping aware of the area and neighborhoods.

    If I can find a solid deal with a duplex, I’m going to take it. Keeping both options open.

    Would you say that now is a good time to find a MFH, considering low interest rates, etc?

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @William Moya

    Hey William,

    Really appreciate the input!

    I can imagine! Lol

    Yeah, a duplex just makes a lot of sense (for the right deal of course) being that I could potential cash flow and build equity in the home.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    If my wife and I plan on going that route, we'd purchase with an 30yr fixed rate FHA loan.

    We are new to the Dallas area and do not have any family or friends here. I know there are a lot of variables in the mix but getting a tenant in the other side would be the main focus.

    0Reply
  • Onan Dumas
    Investor · Rowlett, TX · Member since 2013 · 132 posts · 72 votes
    5y

    @Juan A. Ortiz

    Sure, debt is so cheap right now that if you can swing it then swing it. My main point is that you're going to be looking north of 500k to find a decent duplex that doesn't need crazy sweat equity. I've done the dance with the real estate agents on how easy it is to find them under that price in decent neighborhoods in Dallas and it's not as easy as they make it sound. Impossible? Nothing is! If you are prepared to take that on or really grind and find you a distressed MFH (I know I couldn't convince the wife to take us and our kids and do some sweat equity while we live there) then you can make it happen. If you're an all cash buyer then your ROI criteria will be easier to achieve since you're looking for more equity appreciation than cash flow in Dallas MFH.

    0Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Onan Dumas

    Thanks, Onan. That’s great advise!

    I definitely don’t mind putting in a bit of sweat equity into a duplex. Looks like the key is to find a duplex in a decent neighborhood. Definitely agree with you about duplexes being much more expensive. I’ll keep my eye out for those deals.

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Juan A. Ortiz:

    @Ola Dantis

    Hey Ola,

    That’s great insight!

    It’s definitely sounds best to take advantage of House Hacking while we are still young and with no kids.

    I am working with a realtor right now and we are keeping our options open for both Duplex and SFH.

    I know I can advertise myself; but what else should I take advantage of when getting tenants into the other side of the duplex?

    Who else should I work with?

     Great question! If you are in a good part of town and follow some principles before acquiring your duplex you wouldn't need to over market the unit as the unit should sell itself. 

    SIMPLE: Buy in an area with low crime (like, duh!! Right?!!), lots of tenants, and decent rent rates. 

    Read this and you will be one step ahead! https://www.biggerpockets.com/...

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Ola Dantis

    Perfect!

    I will definitely do my research.

    Thank you for the info!

    0Reply
  • Richard Helppie-SchmiederPro Member
    Flipper/Rehabber · DFW · Member since 2020 · 374 posts · 208 votes
    5y

    @Juan A. Ortiz Grapevine has many duplex properties. I think one sold for $440k recently, it's an alright deal. Would love to have a quick chat with you over the phone. I would love to share one of the strategies myself and business partner have been using. It seems like it could fit your model.

    1Reply
  • Juan A. Ortiz
    OP
    Investor · Anna, TX · Member since 2020 · 17 posts · 8 votes
    5y

    @Richard Helppie-Schmieder

    Hey Richard, Thank you for the insight!

    Absolutely! Would love to chat. I'll PM here in a bit.

    0Reply
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