Worth to invest in Dallas in current market?

Question

Need an advice. I found a house in coddo mills that is around 300K and I need to pay $300 every month from my pocket after renting out that house due to current high interest rates (25% down payment). Is it okay to make that investment and wait for a long term appreciation?

Account Closed · Answer

What’s your anticipated hold period? That makes a big difference. When I lived in Dallas I had a lot of friends who sought in 2009/2010 - by say 2012/13 they saw decent gains but now in 2024 they’re so glad they did. Time is your best friend with real estate. Some recent articles are saying DFW will be as large as NYC by the end of the century - is that long enough for you? lol, kidding

Keep us posted

Jason Wray · Answer

Sachin,

First off 25% down is a bit much you should be putting 15% down. Mortgage rates have come down and dropped even more over the last few days so get a second quote. I would also like to know more about the address to see if you are buying something that is overpriced in a low rent area. $300K should allow you to buy a duplex/2-unit and both doors should be offering a profit even at 15% down.

If you are in a situation where you are getting hit with high taxes, high rate, low rents it might be a "Walk away deal".

I have to have conversations daily talking people out of buying a particular home because its a bad deal. The husband or wife loves the home or the neighborhood or the fact that it was just renovated and now priced at top market value. The problem is in a lot of those cases there is no potential to cash flow unless you are putting 30-40% down. There are far too many properties out there to have to suffer that type of cash injection.

If you have any questions or want to look at that address let me know I enjoy helping and talking REI!

Bruce Lynn · Answer

I would also look at Sherman. New homes perhaps $220,000 to $250,000. Better and way more demand drivers than Caddo Mills. Probably rent is similar for similar homes, but you can buy for $100,000 less perhaps in Sherman or near that.

Gregory Schwartz · Answer

Im a big fan of putting more money down in this current market so that a property at least breaks even. When / if rates drop you can refinance and re-deploy that equity into other cashflowing assets.

Look at Dallas, the neighborhood, the street and the house. If you can picture owning that property for 10-20 years. Pull the trigger :)

Diego Alvarado · Answer

In Dallas Metroplex I am constantly finding good deals in Fort Worth.

I wouldn't recommended to add extra cash every month to pay for the mortgage. You have to work the deal where in the worst case you break even. $300 will convert on $500 or more for repairs and additional costs.

You have to find a good deal and partnering with an agent to help you achieve that is key.

Vic Reddy · Answer

@Sachin Sharma - Caddo Mills is a bit north on I-30. You should consider further South in Royse City/Fate/Rockwall. You will pay a bit more but the rents are higher and much easier to lease

I did several investment homes in I-30 corridor.

What interest rates are you seeing? It’s possible to get < 7% on investment properties

Feel free to reach out to me.

Taz Zettergren · Answer

@Sachin Sharma I agree with the others, I'd put more money down vs paying $300 per month. Or look at buying single families. There are compaines out there offering 5.75% interest rates for properties that are already renovated, rented and cash flowing positively in DFW. Best of luck! Feel free to reach out if I can be of any assistance

Rob Lee · Answer

If this is a long term hold and you can swing the $300 I think you will be fine. You will be raising the rent over time and when the time comes (whenever that might be) you will be able to refinance. Just don't wait on that one though. When this thing turns around like it always does, you will be happy that you at least acquired the property.

Bruce Lynn · Answer

Put more money down.

Worth to invest in Dallas in current market?

Worth to invest in Dallas in current market?

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