Looking to invest in the Dallas, TX Market

8 Replies

I have been seeing alot of activity in the Dallas area in terms of people moving to that area, as well as the percentage of renters vs homebuyers are significantly higher in comparison to the rest of the country. Does anyone have experience in investing in this area that could connect me with a reputable agent who works with investors, contractors and property managers?

I am an agent, wholesaler and investor in the Philadelphia market- which is a great market, but I like the future growth that Dallas has to offer! Any insight would be greatly appreciated

Hey Brandon!

There are tons of us Agents from the DFW area that are on BP. We all work primarily with investors. There is an influx of people who are moving here. Big business' moving here as well as people from New York and California. 

Dallas,TX is an appreciation play. It is NOT a cashflow play unless you go into multi family. The reason you are seeing so many renters is because MOST people don't move to a new city/state and immediately buy a house. They rent first. They learn the area they like/love then move there when they are ready. They aren't moving into SFH rentals immediately, they are moving into apartments. So the data is correct, but you have to dig deeper into to see the full picture.

Now with that said all of those people need a house to move into eventually. This is where the appreciation play comes in. DFW housing prices have almost doubled since 2015. Builders are already behind a year if not not more. With all of those people coming in then people no housing for them along with big business that are going to continue to drive traffic here which will continue to push housing prices up. 

The Fed interest rate is at 0% meaning banks are lending money to other banks at 0% and banks are lending to use at less than 3% which is the lowest they have ever been. All of that combined is pushing housing prices up and is going to continue to push housing prices up.

Hope this can give you an idea of the Dallas market.

@Alex Grosvenor that was extremely helpful. I am looking for more of a cash flow play. I have been looking at properties in the Dallas area, running numbers and I did notice that it isn’t great with cash flow, to your point.

Thanks for the help!

Hi Brandon,

DFW is indeed experiencing tremendous growth! As a full-time realtor and investor, Dallas is a great place to be in the real estate business. We are one of the few major metropolitan cities with affordable home prices. Our market has continued to thrive even in a pandemic. There is a great deal of competition due to the backlog created by the previous recession. We have experienced incredible appreciation over the last 5-7 years. While cash flow is not easy, if your expectations are reasonable there are certainly deals to be had. As I'm sure you know, it also helps to be first.

Rob

@Brandon Ribeiro there certainly is a high demand for investments in the DFW area and you'll experience a lot of competition when it comes to acquiring a deal - especially if your don't source the deal yourself.  Fortunately we have amazing  rents, which help offset our crazy property tax - which again is why obtaining properties "off market" is key, to help keep your assessments low.  Multifamily is still king, but the cap rates are ugly (usually).  I'm a mortgage LO and I help many investors move their rentals out of hard money into permanent financing; I see deals consistently so I know they are out there.  But as @Rob Lee stated, if your expectations are reasonable there are plenty of deals.  Don't expect 2% on every deal, you'll probably see more 1% in reality - which is still better than most of the country.  DFW is a great area to invest just buy right and have an exit strategy refinancing the correct way.  Send me a message if you'd like to connect and talk more about it.

DFW area is appreciating like crazy. And rents are going up pretty good. I'm a buy n hold investor out here and find the best ROI is homes under 190k. And most of my properties get around the 1% rule. Not getting rich off it, but doable.

Dallas is definitely an appreciation play. If you're trying to buy rental properties in the hot areas, cash flow is very limited. However, outside the city, you can find SFH/MFH in smaller towns that has good cash flow and with appreciation too.

Hi @Brandon Ribeiro !

The Dallas market is fantastic for appreciation, and mortgage rates are at a record low, if you need a loan to help you finance your investments! 

You're welcome to check our profile for our contact info, we'd be happy to make some recommendations!