1st Multifamily (4plexes) Dallas Fort Worth, TX Team

9 Replies

Hello~

My wife and I are looking to work with others to make a team for multifamily (specifically 4plexes later to be apartments etc) as we are moving from Vancouver, Washington to Dallas-Fort Worth, Texas. My wife is a Registered Nurse & I'm an IT Engineer. We've got two other houses (a single family & a duplex) that we rent through property management so we know enough that we want to grow & expand while also humbly not knowing nearly enough. 


Our first step is buying a Fouplex then continuing to expand once we've moved. For our team we're looking for people that are investors themselves (love BiggerPockets part of why we're here). We're also looking from this team to do much more real estate investing after my wife & I have relocated.

  1. Real Estate Broker/Deal Finder - Help us vet it's a good deal or not (we're new to DFW & Texas as a whole so there's a lot of differences in laws to house build codes, etc)
  2. Lender
  3. Property Manager (we'd love to expand our skillset to one day manage some of our own rental (2-4 unit plexes) & have property managers on apartment complexes we get into next)
  4. Contractor/Rehabber We're not looking to overwhelm anyone's contractor referral/you become so busy that anything existing customer wise changes. We're talking if it's beyond our skillset. We're very much elbow grease & hard work ourselves; however, there's certainly things we don't know about and/or again the changes to another state's building codes etc. For example we did our own work converting the Duplex from junky backyard to a nice fenced (separate area per unit) to barefoot backyard, storage unit space, removing old 70's 6in concrete pad for vehicle parking, etc for a nice value add to renters).

Some of what we're looking for in our first Texas real estate purchase & relocation (house hacking as we'll live in one of the 4 units) investment. We similarly want to help others & our teammates for their investments, need an RN for a community service event, need some IT/Managed Service Provider esque assistance in your own business or even looking to invest in Washington state we can help.

  1. 1.) A fourplex in a B class investment 
    1. (we're flexible - if it has to be an A class investment to get a garage for at least wife's vehicle - still want to understand how to protect the work rig truck from huge damaging hail)
      1. Attached garage (we've come to understand hail is a huge thing there & we want to protect our vehicles. ie Have an '08 Dodge 3500 6.7L Diesel & a Honda CRV)
  2. 2.) $100/month/unit profit after everything
  3. 3.) Value Add opportunities
    1. To rehab or to add something to the 4plex beyond just raising rent to market

We're super excited for meeting new teammates & investors & growing together.

@William Leininger   Welcome to DFW.  Very nice goals, but probably all will be very very tough to accomplish.  

#1 we don't have a lot of fourplexes....there are some...and some 2-3-4, but not a lot.

#2 I'm scratching my head trying to think if I've ever seen a 4plex with a garage.....I probably have, but those are very very few and far between.   You can find some duplexes with garages.

#3  Price vs Rent and cash flow might be tough in today's environment.  Lots of cash around, very few properties.  I would not county on living for free and cash flow.  If you contributing the normal rent...$1000-$1200 with the other 3 providing the extra $100, that might be possible....but finding one where only 3 cover all expenses and cash flow and you live for free in #4 is likely very very tough.

#4  I will say many of the 4plexes are value add opportunities.  Many owners never do any or minimal upgrades, so often there is plenty of work to do to improve.  That doesn't mean they sell at a discount....they still seem to sell at very healthy prices, but may give you the opportunity as you have turnover to improve units and increase rents.

Not here to give you negative outlook, but the reality is often very different than what you hear on podcasts.   I feel like most of the information people hear about on the podcasts is from 20 years ago...but often not reality in today's market.   Not impossible perhaps to find what you're looking for, but you have to bring your A game, spend lots of time looking for the right opportunity, be flexible on where you want to live and what you buy, and bring your A+ game to bidding.   Chances are you will feel like you are overpaying....of course had that same conversation with an investor today where he said he was so scared when he bought the first one...and looking back 10 years wished he had bought every house in the neighborhood.   Rents have come up very quickly in his neighborhood.  House is paid off now...and he is banking some very nice money on that first rental.

That's great. I'd recommend attending local meetups in your market, and getting word of mouth referrals for your areas. These will bring you the most qualified and vetted candidates.

Hello @Bruce Lynn
#1 Thanks for the facts & reality setting. Tells me my wife & I need to review the concerns that lead us to value a garage. Part not understanding the hail from storms & if it damages vehicles etc. Part that we've got a lot of tools for DIY home improvement/value add. Currently a portion of every room in the Duplex & a 6x10 storage in backyard stores our tools

#2 We're willing to be flexible on the spending of 500-600k for a garage. You're right now that we review what we've seen garages are very rare from what we've seen on redfin/zillow.
5502 Loving Dr
8 bds • 8 ba • 4,320 sqft home I found on Zillow? https://www.zillow.com/homedetails/5502-Loving-Dr-Garland-TX-75043/162576389_zpid/?utm_campaign=androidappemail&utm_medium=referral&utm_source=emailshare
#3 we're open to contributing normal rent to make it in sense $100 happen. If only the crazy rent laws restricting rent raise would change in Washington we could raise our Duplex rent. Won't get into that frustration.

#4 Yeah we're understanding that until the rent & mortgage etc moratoriums lift and/or if the flood of several million protected foreclosures hit the market we're going to be paying a premium. That being said it's still 50% or less than the cost in the PNW. It's outright insanity & not worth it - let alone the increasingly unfriendly landlord/real estate laws in PNW. One of the many large reasons we're relocating. I'm all for value adds - as long as the numbers work out slightly positive we do improvements so we can raise the evaluation come refinance time to pull out more equity - a lot seems to play into that whole equation beyond just improvements.

I understand you're setting expectations/correcting the views/educating us & I appreciate that - since we're a long ways away so it's not as easy as a weekend drive trip to make the relocation & real estate investing. There's some things we won't accept left unrepaired from a seller which seem to (at least in Washington state we're not as seasoned in real estate) like a bad roof or electrical fire hazard electric panel boxes (mortgage company had to tell the seller to fix & replace both or the mortgage company would stop the deal. Kinda felt bad for the seller (~10k repairs in total), then again an electrical box burning the house down since it was from the 70s with a recall for such, we were quite shocked the seller didn't care in selling discussions taking the mortgage company backing out to make the repairs happen. I don't know if there are other equally critical like things to be mindful of for houses in Texas. Again - wife and I are learning drinking from firehoses. So much to learn not so much time haha.


Originally posted by @Bruce Lynn:

@William Leininger   Welcome to DFW.  Very nice goals, but probably all will be very very tough to accomplish.  

#1 we don't have a lot of fourplexes....there are some...and some 2-3-4, but not a lot.

#2 I'm scratching my head trying to think if I've ever seen a 4plex with a garage.....I probably have, but those are very very few and far between.   You can find some duplexes with garages.

#3  Price vs Rent and cash flow might be tough in today's environment.  Lots of cash around, very few properties.  I would not county on living for free and cash flow.  If you contributing the normal rent...$1000-$1200 with the other 3 providing the extra $100, that might be possible....but finding one where only 3 cover all expenses and cash flow and you live for free in #4 is likely very very tough.

#4  I will say many of the 4plexes are value add opportunities.  Many owners never do any or minimal upgrades, so often there is plenty of work to do to improve.  That doesn't mean they sell at a discount....they still seem to sell at very healthy prices, but may give you the opportunity as you have turnover to improve units and increase rents.

Not here to give you negative outlook, but the reality is often very different than what you hear on podcasts.   I feel like most of the information people hear about on the podcasts is from 20 years ago...but often not reality in today's market.   Not impossible perhaps to find what you're looking for, but you have to bring your A game, spend lots of time looking for the right opportunity, be flexible on where you want to live and what you buy, and bring your A+ game to bidding.   Chances are you will feel like you are overpaying....of course had that same conversation with an investor today where he said he was so scared when he bought the first one...and looking back 10 years wished he had bought every house in the neighborhood.   Rents have come up very quickly in his neighborhood.  House is paid off now...and he is banking some very nice money on that first rental.

 

Originally posted by @Jeffrey Donis :

That's great. I'd recommend attending local meetups in your market, and getting word of mouth referrals for your areas. These will bring you the most qualified and vetted candidates.

Thanks. We're looking at distance attending some meetups since it's such a long distance away to be meeting people in person.

 

Originally posted by @Matthew Brill :

You should consider build to rent. 

We know nothing about it - that's an intriguing suggestion. Definitely appreciate the problem solving. Maybe we'll have to do that & live in temp housing or something until the first unit is built. 
Concerns would be

*how to find land zoned for it within DFW with a reasonable commute to Irving where I'll be working (mind ****ing blowing from an IT perspective of what's possible & companies not utilizing it to lower their overhead by removing commercial workspaces) in person 5 days a week ~40+ hours a week.

*finding a builder for it

*a house build plans

*the over priced materials for housing. I individually am part of a ~270 acre tree farm LLC - it's a horrible time to log (with friends & families with saw mill businesses who are getting a small percentage of the raise in price action); however, we the log owners aren't getting ****. Haha if only it made sense to move logs from PNW to Texas. Or maybe it does.

Contact me when you can I have been exploring the same specific things and lived here all my life. My wife and I have several SFR properties and are always looking to grow our business.

You're going to be hard pressed to find vacant land close to Irving! That's in the belly of the beast and it has been in development since.....forever. I'm sure there are still parcels left but competition will be stiff. Best bet is looking towards Denton, the Mid-Cities (between Ft. Worth and Dallas), outside of Ft. Worth, and northeast of Dallas (Rockwall, Lake Lavon area, etc). Still has vacant land and seeing significant growth in the outlying areas. For context, I lived 1.5 hours away from where I worked when I lived there... people commute a long ways.

Originally posted by @William Leininger :
Originally posted by @Matthew Brill:

You should consider build to rent. 

We know nothing about it - that's an intriguing suggestion. Definitely appreciate the problem solving. Maybe we'll have to do that & live in temp housing or something until the first unit is built. 
Concerns would be

*how to find land zoned for it within DFW with a reasonable commute to Irving where I'll be working (mind ****ing blowing from an IT perspective of what's possible & companies not utilizing it to lower their overhead by removing commercial workspaces) in person 5 days a week ~40+ hours a week.

*finding a builder for it

*a house build plans

*the over priced materials for housing. I individually am part of a ~270 acre tree farm LLC - it's a horrible time to log (with friends & families with saw mill businesses who are getting a small percentage of the raise in price action); however, we the log owners aren't getting ****. Haha if only it made sense to move logs from PNW to Texas. Or maybe it does.

You don't have to necessarily find vacant land. I am in the middle of a project in an area with no vacant land, but you can find a property that has higher and best use as a 4plex rather than what is currently there (old SFR in a area zoned multifamily) or maybe a duplex in need of repair on a large lot. You add the knock down cost on top of construction but maybe it's worth it depending on the deal.

I know nearly nothing about construction but I interviewed a bunch of builders. I got a rough idea of their pricing and how they operate. And they are doing all the work with the plans, permits, etc. And we signed a contract for costs so they are taking on the base materials price risk (I'm sure they figured current commodity situation into their bid)

That's really interesting that you're on the supply side of lumbar. Just curious, particularly since you are at the logging level, where do you see upward pressure on price coming from? Retail sellers are claiming they aren't seeing an increase in profit either despite prices going up.