Should I Buy A Dallas Duplex or SFH?

5 Replies

The Dallas market hasn't reached its peak of the cycle but I do know it is closer to the top than the bottom.
Should I buy and move into a duplex, fix it up and rent out one side (like the ones in Bishop Arts) for $300k?
Or
Buy a Single Family Home for under $300k (like over in the White Rock area) and ride the appreciation. Then move in two years for the $250k capital gains break and rent it out then?
Down side of option two is that it pushes back my first renter goal by two+ years from now.

What makes the most sense financially? If I do option one then when the bell curve goes down I can use the cash flow to buy a bunch of SFH at their lowest.

Or is Dallas not even close to its peak with all of these new companies moving in?

As someone who invests in Dallas, I would say either option could work but may not be the best use of capital.  Of the two options, betting on appreciation is more risky.

Personally, I would suggest looking at some lower end areas than White Rock & Bishop Arts and lower your purchase price to the $150k or less and either do the house hacking duplex of just a simple buy and hold BRRRR.

@Sean Ray I would agree DFW is closer to a peak than a trough. Personally, if I was going to buy a single family home to live in and then turn into a rental down the road, I would want it to be a good rental property now. A $300k house in East Dallas may be a nice house and may appreciate (I wouldn't count on the gains we've seen the last few years), but it would certainly not cash flow as a rental.

Thanks @Andrew Herrig and @Ryan H for replying.
I agree with what you both said and that is why I am conflicted. Since I will be living there I want to live in an area that I actually want to live. Finding a place in dallas for under $200k is not going to happen, especially a Duplex.
To stay in the areas I am looking to stay in then I am looking from $250k-$350k starting.
At that rate the 1% rule is not even close.
So I can't figure out what to do other than bite the bullet and live an hour away from the city in smallville bfe that has almost no appreciation or anything to do. I am def a city guy and this is where I have built my life at.

@Sean Ray If you're set on the house hacking model, I'd go with the duplex in Bishop Arts. If you look hard, you can find some duplexes that come close to meeting the 1% rule that aren't too far out (e.g. Richardson, Garland, Irving).

Alternatively, live where you want to live, and invest elsewhere. I live near White Rock Lake, but have rental houses in various locations in the Dallas area.

Thanks @Andrew Herrig . I saw that about BA but I am nervous that the school district, jobs and future construction for that area is not looking too good. That area is being fueled by bars and restaurants alone and we all know that doesn't last long unless jobs help fuel it. 

White Rock, Lakewood area does have the growth of jobs and close location to major focuses other than just bars and eateries. That is why I have been looking in that area around Lockwood.

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