Looking for a multifamily property in DFW market

[Daniel Chocron]

Hello BP Family! 

My name is Daniel Chocron. I am currently working as a civil engineer in a highway project at Waco Tx. When I first moved to Waco, I decided to buy a house here and do house hacking to avoid paying rent. I've been living in the house for a little over a year and half now. The house is a 3 bed 2 bath. I was able to rent the other two rooms to a couple of my co-workers. So far the house is doing great as I have been able to live rent free while paying the mortgage, and getting a lot of appreciation. 

My boss told me he was going to send me to another project in the DFW area within the next 6 months. This time I am looking to go into the next step and buy a multifamily property to live in one of the units and rent the rest. I am thinking on re-financing my current mortgage to do that for several reasons; the interest rates are low, I have a lot of equity due to the appreciation which will allow me to drop my PMI as I did a conventional loan with only 5% down, and also get some money out to invest in the next property.

I am reaching out to the BP community to get some guidance into where to start my search. DFW is a big market and I am not sure where to even begin. Ideally I would like to buy a duplex-fourplex that generates cashflow. Also, any recommendations of a good local agent would be greatly appreciated as I need to build a team to start my RE journey. My goal is to achieve financial freedom through real estate (of course the sooner the better) so any connections, advice or recommendation that would help me achieve this goal is welcome! 

[Will Fraser]

Welcome to the BiggerPockets forums, @Daniel Chocron!

You are on a solid path with your investments and that's awesome to hear!  Dallas could be a great market to repeat your strategy in for sure.

I'll DM you a contact of mine that is stellar to work with in the DFW area and I hope that they can be a deal-making ninja for you!

[Lucia Rushton]

@Daniel Chocron. How exciting ! We love Waco - it has been a super market. Seeing 9% rent increases which is crazy !

So moving to DFW - fabulous. Are you able to find out which part of the metroplex you will be transferring to with work? May not seem realistic to find you a good duplex in Fort Worth if you job will be on the north side of Frisco ( just my opinion) .

[Daniel Chocron]

@Lucia Rushton Hello Lucia, thank you for your reply! It would most likely be around the Fort Worth area as it is where we have most of our projects right now. But I do not mind going a little farther and have a longer commute if it means getting a better deal. 

[Alicia Marks]

Hi Daniel,
Early welcome to DFW! I agree that you'll want to know a more specific location where you will be working. Even driving through Ft Worth will take an hour with traffic. I invest in Johnson County just south of Ft Worth. There are some multifamilies that open up in that area that are fairly affordable. With the prices going up everywhere you may have a hard time finding one that completely pays for the mortgage from one side, but combining with a househack on your side until you can rent both would definitely help. Let me know if you'd like to chat more about areas south of the metroplex!

[Lucia Rushton]

Originally posted by @Daniel Chocron:

@Lucia Rushton Hello Lucia, thank you for your reply! It would most likely be around the Fort Worth area as it is where we have most of our projects right now. But I do not mind going a little farther and have a longer commute if it means getting a better deal. 

Best to find out your budget and get pre-qual'd at a minimum with a local lender. that might help define your location as well. 

[Bruce Lynn]

@Daniel Chocron   Great plan.   DFW market can be challenging both in terms on finding the right 4plex and finding one that cash flows, but you have to have a place to live anyone, so if you can rent 3 and they can help with equity payoff and you get all the appreciation, you're on the right track.

Welcome to the metroplex.

[Daniel Chocron]

@Alicia Marks Thank you for your reply. Yes! I would like to chat more about these areas south of the metroplex. Please feel free to DM me so we can get in contact. 

[Daniel Chocron]

@Bruce Lynn Yes! I do not mind if I still have to pay a portion of the mortgage while living in there as I would spend that money on rent anyways, but I do want to find something that cash flows whenever I decide to move out. 

[Tyler Hodgson]

Daniel,

Qualifying for a multifamily, while retaining your current home, may present some difficulties. Investors typically leverage one of two mortgage options when purchasing a multi-family as a primary residence - here are a couple potential hiccups I see from your scenario:

1. 1. FHA Loan 3.5% down payment - you'll be able to count rental income from the units that you don't occupy in the new property, but it's unlikely that you'll be able to use rental income from your current property towards qualifying, because FHA loans have very strict requirements on using rental income from a departing residence (need 25% equity in the property, and have to have an appraisal completed for the qualifying rental income value from the old property)
2. 2. Conventional loan 5% down payment - only a HomePossible loan allows 5% down payment on anything except a single family, but HomePossible has pretty restrictive income limits. Depending on your qualifying income you may not be able to get HomePossible loan

You definitely want to do a full pre-approval to see if the multi-unit property will be a viable option or not, or you may be better off just getting another single family property with a 5% down convectional loan and having some roommates, like you are currently doing. 

Hope this helps!

[Patrick Pendley]

Daniel, Hate to see you go, I'm in Waco for the long haul, reach out to us if you are needing property management for your property here. 

[An Nguyen]

An early welcome to the area! I've been in the area for a while and got my first duplex right around the downtown Fort Worth area in 2018. Have been living on one side since then, and have had a long-term tenant for 2 of those years. I travel pretty often for work so I airbnb'd out my side while I was gone, and it was rented for about 85% of the time. Now that he's moving out, I'm switching over to short-term rentals while the market catches up.

Let me know if you have any questions! Happy to pass you my previous agent's number, he owns 4 duplexes, a 4-plex, 2 single-family short-term rentals, and just closed on a 1.5m commercial property. 

[Ronald Rohde]

Welcome to DFW! 

[Juan Campos]

@An Nguyen

This sounds amazing bro, I'm in the same boat but it seems almost near impossible to find a good duplex or multifamily, specially in the are that I work , given the commute and traffic here in Dallas is a pain.

I'm around the grand praire Irving Arlington area working in Las Colinas currently renting here.