DFW REI Saturation / Overbought

[Derek Mills]

Does anyone have any views on the DFW market? I just wrapped up my most recent rental and the majority of wholesalers that I receive notifications from seem to be waning. Even the big guys in the area seem to have fewer and fewer deals. Less ROI is obviously the norm given the hot DFW market, but I am seeing almost no good deals worth jumping on. Is anyone else seeing this or should I start shopping for a better wholesaler?

[Michael Hayworth]

It's definitely harder to find good deals. I've not found most wholesalers in the area to have much worthwhile. The exception has been Steve Glassgow, and even with his properties, stuff gets bid up beyond what I want to pay if he does a group tour. (Plus, he's mostly Dallas area and I stay west of 360.)

• I've been doing my own direct mail, using Money Mailer instead of the typical Yellow Letters, etc. Just managed to buy my first house in the Fairmount Historic District after getting outbid on house after house there. I'll hold it for a year to get into LT cap gains, then do a room addition to up the square footage 50%, and cash out big on that one.
• I'm at the Trustee Auction nearly every month. It's a lot of work to find deals there, too, but they're out there. My last two have been one solid deal and one killer deal.
• I've extended my search area. I have two houses in Alvarado, where houses are cheap, but rental inventory is almost nonexistent, so rents still bring great cash flow.
• And since my main business is remodeling, any time someone says, "I need to fix it up so I can sell it," I offer to buy it right then. Usually, they don't bite, but occasionally they do. Just bought two in North Richland Hills that way. You could offer to partner with contractors in your desired areas.

It's definitely harder than it used to be, but I'm still finding things I can make money on. More importantly, I'm also saving cash - there's going to be a correction eventually, which'll drive a lot of less-committed investors out of the market, and will drop prices 10% or so. I'm planning to be in position to buy 10-20 properties at that time.

Good luck!