Hello, I am interested in investing in real estate in Dallas, TX because it looks like a cool place.

I am looking at the Plano, Carrollton, Garland region as well as Crowley near Fort Worth. Are these decent areas? Would it be OK to invest in a condominium or single family home?

I have also looked at Sacramento, CA (visited a few condos there), San Diego, Hayward, and Las Vegas (also visited a few condos there), in the past.

Thanks!

Sacramento just got projected as highest grown in the nation for 2021 at 7.4% price and 17% in volume.  My issue with investing in Texas and elsewhere is that there is almost no barrier to entry.  You can build quick and cheap and they do... so how does your property retain value when you are constantly competing with new construction that can build for next to nothing?  

@Andrew Njoo . So glad you are looking at DFW for your investing! The different towns you mentioned are all over the place - any specific reason why? My opinion Condo vs SFH is the HOA fees. As an investor the HOA fees can make your cashflow negative very quickly, again just my opinion. Plus they need to approve many things you may want to do with your unit, including if you can rent it out.

@Joe Bertolino location location location...

Originally posted by @Lucia Rushton :

@Andrew Njoo . So glad you are looking at DFW for your investing! The different towns you mentioned are all over the place - any specific reason why? My opinion Condo vs SFH is the HOA fees. As an investor the HOA fees can make your cashflow negative very quickly, again just my opinion. Plus they need to approve many things you may want to do with your unit, including if you can rent it out.

Hi Lucia, 

I was looking for upcoming suburbs in the DFW on Zillow, but admittedly not a total expert at this haha..

I agree that HOA adds an extra expense, but maybe for a first time investor, a condo might be easier to start with (as the loan is smaller)?

@Andrew Njoo

DFW is a smart area to invest in. However, your ROI won't be good investing in homes over 200k out here. I do well with homes in the 120-170k range with average to below average schools where you can get 1% in rent or close to it. Appreciation seems to be way higher in homes under 200k as well. Ft worth is a good area. I'm in Ft worth, Arlington and Grand Prairie with single family. Let me know if I can help in anyway. Good luck!

@Andrew Njoo    All of the cities you list I think have great potential.  Stay away from condos is my advice. Typically in DFW area I don't think they work out well for investments for the most part.  There's probably a handful of exceptions.

I don't remember any condos in Crowley so that might not even be an option.  In Plano I think there are only a couple of options.

Most often the numbers just don't work well. High HOA dues kill the returns. There can also be other issues...noise, leaks, trash out on the wrong day, storing things on the balconies, parking, and on and on that you won't find in single family.

You are right though....if you have a budget, then condo can be a lot cheaper start and alternative vs single family.   I've seen some condos this year just under $100K, not many, but a few.   Single family is now around $200K or more for the most part.

Hi Andrew, yes. Plano, Carrollton, and Garland are all great places to invest in real estate. Low days on market for flips & low inventory with high rental rates for buy and hold.

@Andrew Njoo Yes the DFW areas you listed are all good locations. I have to disagree with Joe. The properties in North Texas have historically help up very well. New construction properties may not cost as much as in California but I assure you it is more than "next to nothing."

You should reach out to @Lucia Rushton she is a Texas agent that is from California and specializes in rental properties. She can give you an honest answer to the differences between TX and California. 

Also condo investing does not do well in DFW.

Yeah, stay away from condos. To many negatives to list. My top one is lack of control. There are also too many horror stories surrounding them. My favorite was from Florida during the last bust. The handful of people who had bought into a newly constructed and largely vacant 100 condo building had to pay a special assessment to cover all 100 unit's HOA dues.

@Andrew Njoo on the lending side we are seeing better opportunities right now in Dallas on cheaper houses than the bigger purchases. DFW has a lot of opportunity but a tough market right now. 

One of the areas where condos may work in the DFW area is near the Galleria, the limit between Addison near Belt Line. The huge redevelopment with Dallas Midtown and all the surroundings is already on its way. I say condos because there are very few SFH/Duplexes available there, and mostly when you look at SFH that would work in the eyes of an investor.

Remember the rubber band effect, the center of DFW will stretch as it grows, and when it bounces back, the new downtown will be that area, the hub between 35/Tollway/75 and the I635. Drive by and you will see what I am talking about.

There is another area near the Costco Business where you can buy some little condos for less than 70k and rent them out for $900-$1000 /mo. Rough area, slowly improving, but it will be a tough area for a while.

Other than that, generally speaking most HOA's in DFW are not as restrictive and micromanaging as those in Miami, but they still hold power.

@Andrew Njoo

Hi Andrew

I’ve invested in Condos and SF in Dallas and they cash flow. Condo investments were in the <$100K range in Farmers Branch and Dallas (off of Midway); rents are $1K-$1.3K. I cash flow $200 and $300 respectively each month. I also have a SF in S. Arlington. I paid $200K for it, and it cash flows $300 monthly. I particularly like the S. Arlington area;

rents are pretty high, and a lot of demand.