Thoughts on off-market deal pricing in Texas?

Question

Anyone else noticing more off-market deals in TX coming back with unrealistic pricing? I’ve passed on a few recently that just didn’t work, unless rents or ARVs stretched. How are your underwriting right now?

Bo Smith · Answer

Been seeing this too. I started pulling rent comps from 3 sources instead of one - sometimes there's a decent gap that makes deals work when others walk away with bad data. You cross-checking rents or using just one source?

Arman Ahmed · Answer

@Richard BellTotally get you, Richard. Texas off-market deals are definitely trending high right now, and it can be tough to find ones that truly pencil without stretching rents or ARVs. If you’re open to out-of-state options, Midwest markets still have undervalued duplexes and small multis where the numbers work from day one. The key is stable neighborhoods, conservative underwriting, and a local team you trust to make sure the deal holds up after closing.

Richard Bell · Answer

Appreciate all y'alls perspectives!

Roger Oquist · Answer

DFW has been a tough market to make the numbers work for the last few years, especially last year when the market adjusted.  Wholesalers are getting 80% of ARV, great for them, but hard to flip and make a profit.   There are some deals out there that people find, you just have to be careful and stick to your numbers and be conservative.

Pavel Voroniuk · Answer

I’ve been seeing something similar when I run numbers — a lot of off-market pricing only works if assumptions get pushed.

From how I underwrite, I’ve had to stay more conservative on rents and ARVs, especially with rates where they are. If a deal only pencils with stretched inputs, I usually pass. Curious whether you’re seeing better discipline in specific Texas submarkets, or if you’re starting to look more selectively at other states as well.

Diego Alvarado · Answer

Hi @Richard Bell

While this sentiment is common, I’ve seen this cycle repeat throughout my years in real estate. The current challenge is that many sellers and wholesalers are still pricing based on past growth trends, which no longer align with today’s market reality.

​To secure a deal in this environment, volume is essential. Whether I am working on my own deals or for my clients, I prioritize analyzing 20 to 30 properties and submitting offers weekly to find the right opportunity. Success right now requires both patience and a disciplined approach to the numbers.

John B. · Answer

I go to local DFW meetups and own property in other states but I do live here now. Ive heard the same sentiment from the meetups. Nothing is truly making sense in our area. Im actually potentially looking at some multifamily in TX or OK soon so Ive just started checking out the numbers myself. I see you are from Denton. I went there 3 years ago or so and did see a decent amount of 4 plex's

Thoughts on off-market deal pricing in Texas?

Most Popular Reply