Multifamily units 6+ (Texas)

[Mercedes Riina]

Good afternoon, I was hoping to get some advice on good areas in Dallas or Houston for multifamily buy and hold properties. I am doing my own research as well, but thought it would be beneficial to also have some feedback! Thank you so much

[Kenneth Mendonca]

This is a great question! I'd like to offer a different approach than most people suggest.

1. How do lenders view the market?
2. Are the agencies (Fannie, Freddie, FHA) lending there or are they running away?
3. What market tier have the agencies classified _______ market as? Do you know how this impacts your loan?
4. How much equity will I require to enter the _______ market?
5. What are the typical expense ratios in the _______ market?
6. What will my cash on cash return be if i invest in the _______ market?

The list goes on and on. It's a great starting point to get BiggerPocket member opinions but at the end of the day, you'll need to crunch the numbers and hope your lender can support the valuation that the data supports! (e.g. comps, recently closed transactions, agency market ratings, etc). Ultimately, your financing will be the most important driver in the transaction. Make sure your lender can execute when you need them!

tldr; lenders will always underwrite to a conservative value, use data to drive decisions and valuations when looking for a market to buy into!