Considering New Construction in Crowley, TX for First Investment – Worth It?

Question

Hi everyone,

I’m a new investor based in Dallas and recently came across a new construction property in Crowley, TX that I’m considering as my first investment property. The home is a 4 bed, 2.5 bath, listed at around $325K-$335k, with potential rent estimated between $2,300 and $2,500/month.

I'm thinking of putting 25% down and hoping to at least break even, possibly cash flow slightly or benefit from long-term appreciation. However, I have a few concerns and would really appreciate your input:

• Location & Market Outlook: What’s your take on the future of Crowley, TX as a rental market? I’ve noticed a lot of new build-to-rent communities in the area, which makes me nervous about rent competition and future appreciation.
• Builder Reputation: The home is being built by Legend Homes, and I’ve heard mixed reviews about their construction quality. If anyone has experience with this builder, I’d love to hear about it—especially how to mitigate risks with quality or warranty issues.
• Investment Strategy: Given the numbers, would it make sense as a long-term hold or should I be more cautious given the saturation of similar rental homes nearby?

Location & Market Outlook: What’s your take on the future of Crowley, TX as a rental market? I’ve noticed a lot of new build-to-rent communities in the area, which makes me nervous about rent competition and future appreciation.

Builder Reputation: The home is being built by Legend Homes, and I’ve heard mixed reviews about their construction quality. If anyone has experience with this builder, I’d love to hear about it—especially how to mitigate risks with quality or warranty issues.

Investment Strategy: Given the numbers, would it make sense as a long-term hold or should I be more cautious given the saturation of similar rental homes nearby?

I’d really value any advice or personal experiences you can share, especially if you’ve invested in this area or in new construction rentals more generally.

Thanks in advance!

Brannon Potts · Answer

I live in the very area. Rental market is soft. I do build to rent, but build them myself so my upfront cost is much less than retail. The current numbers you put together would be a negative cash flow investment. Also, if you hold back money for reserves on a new project, which I suggesst starting at 7 or 8% you are extremely negative. I would look in another direction giving my advice to protect you. Wish you all the best

Bruce Lynn · Answer

#1. Check to make sure they will sell to investors.

#2. Check to make sure the rules and regulations of the HOA. Many are not that friendly to investors and the rules can change to make your life difficult in these new communities. I've see 3 different HOAs this year try to change the rules to make big headaches for investors. I don't think any of those measures passed, but rules can change.

#3. New construction rarely works well for investment, I think most investors would not be excited about your rent vs purchase price. You will likely do much better with resales. Also check your school ratings for Crowley.

#4. It's been a while since I have worked rentals in that area, but if your numbers are correct I would think you would be at the top of the rental price range in Crowley. I don't think that is a good place to be. Look at average incomes and back into what people can pay in rent. Without looking I'm thinking in that area you would want to be in the $1600-$1800/month price range to be in the heat of the market. The market gets thinner as you move up the price range I expect.

Diego Alvarado · Answer

Hi @Henok Micael, new construction is tough for investors, @Bruce Lynn mentioned the main things that you have to consider.

I would like to tell you that, of course, it is not always like that, new constructions have a different strategy to invest in, and some are very profitable in the strategy that you are planning to do, but the long-term hold is most likely a 10-yr period, so that risk is higher.

Parker Schultz · Answer

I ran this through my DSCR calculator, here are some estimates:

Purchase Price: $330,000

Loan To Value: 75% ($247,500)

Fico 720????

DSCR Loan ESTIMATES

Interest Rate: +/- 6.5-6.75%

30 year Amortization with a five year prepay

Parker Schultz · Answer

I think you would regret buying new construction if you end goal is to become an ACTIVE real estate investor. If this is a side investment for you and your a focused on your career or business, it seems like it could work.

What are you investment goals first and foremost?

Me personally, I would only buy a new construction house if it was for my future family, but i would prefer to buy existing housing stock and renovate for rental income. Dollar for Dollar, you will add more value than the guy selling it to you if you do the work...

Jules Aton · Answer

I know nothing about that builder or area but would urge anyone to think twice before investing in a rental based only on possible appreciation. It will likely be a lot of work and outlay even if you have convinced yourself it will be maintenance free for x number of years. I’m also not a fan of a new build to rent which I believe in most cases is a similar financial move to purchasing a new car.

Considering New Construction in Crowley, TX for First Investment – Worth It?

Considering New Construction in Crowley, TX for First Investment – Worth It?

Most Popular Reply

6 Replies