North Dallas Suburbs - Primary Residence/ Investment

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North Dallas Suburbs - Primary Residence/ Investment

Dev Khosla
Prosper, TX · Member since 2016 · 7 posts · 0 votes

Hi Everyone, 

We are planning to sell our home in Florida with about $130K in hand after the sale and move to Dallas with a target property range of 350K-450K. This will be a mixed investment and primary home situation that we intend to stay in at-least 5-10 years if not more. We will be looking for the highest rated school so it restricts us to north suburbs. Location is not an issue as long as I am 1.5 hours drive from DFW Airport. 

Q1: If you can suggest very specific areas in suburbs (Frisco etc) that fit the bill of a long term investor/primary residence where the market may not have peaked yet.

Q2: My other big concern is that I will be buying retail value at the top of the market. Does anyone here have a gloomy outlook that we may loose 20-30% market value over current prices during to sudden inflation that resembles the curve of previous crash? The reason I ask is to see if I should buy a more expensive home using all my cash $130 or hold back some and go for a 15 year loan instead of 30 years and keep some as contingency. 

Dave in FL

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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
9y

@Dev Khosla I would recommend rethinking your price point of a rental home here.  The average price of a home in DFW is about $280k.  A $450k home would significantly limit your rental ability in DFW.  Especially in the suburbs.  Most renters fall into the $150k-$200k threshold.  Buying a home as your primary home at $450k is fine if it benefits your family but no metrics we have here show that you will have a good selection of renters at that price point....unless you significantly reduce your rent amount....which isn't what we want to do.  If you are looking for the top rated school districts then you can broaden your scope to other places besides North Dallas.  Aledo, for example, is a top 10 school here and is West of Fort Worth. It fits the 1.5 hour drive you were looking for and very well might be a good market to fit your Q1.  But we have been on a 6 year 9% return on value here in DFW on houses.  With one exception...homes over $400k.  Those have really slowed in value over the past 12 months and a lot of metrics are showing the value is 0% in that period.  There's no guarantees in life but Texas has been on a rise for about 40 years now.  We have double our population in that time and 90% of that growth occurred within 50 miles of I-35.  If you are looking to get "value" we are still a great place.  We are the 4th largest metropolitan area in the country now...NYC, LA, Chicago...and then DFW.  And none of those other cities can brag about an average home price of $280k.  We are still a great value.  I hope some of this information was helpful.  Feel free to ask additional questions if needed. Thanks!

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  • Neil Da Silva
    Investor · Toronto, Ontario · Member since 2017 · 116 posts · 20 votes
    9y

    @Dev Khosla

    What kind of house are you selling? how much?

    I know nothing of Dallas however maybe I can purchase your place?

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  • Dev Khosla
    OP
    Prosper, TX · Member since 2016 · 7 posts · 0 votes
    9y

    Neil,

    I am looking for top dollar in retail market. Probably not an investment home since you have 1 year wait before you can rent as per community rules.

    Looking for $425000, 2200SqFt SFH 3/2.5 in Boca Raton in top rated schools. I will send you details once my agent has the listing ready.

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    9y

    @Dev Khosla I would recommend rethinking your price point of a rental home here.  The average price of a home in DFW is about $280k.  A $450k home would significantly limit your rental ability in DFW.  Especially in the suburbs.  Most renters fall into the $150k-$200k threshold.  Buying a home as your primary home at $450k is fine if it benefits your family but no metrics we have here show that you will have a good selection of renters at that price point....unless you significantly reduce your rent amount....which isn't what we want to do.  If you are looking for the top rated school districts then you can broaden your scope to other places besides North Dallas.  Aledo, for example, is a top 10 school here and is West of Fort Worth. It fits the 1.5 hour drive you were looking for and very well might be a good market to fit your Q1.  But we have been on a 6 year 9% return on value here in DFW on houses.  With one exception...homes over $400k.  Those have really slowed in value over the past 12 months and a lot of metrics are showing the value is 0% in that period.  There's no guarantees in life but Texas has been on a rise for about 40 years now.  We have double our population in that time and 90% of that growth occurred within 50 miles of I-35.  If you are looking to get "value" we are still a great place.  We are the 4th largest metropolitan area in the country now...NYC, LA, Chicago...and then DFW.  And none of those other cities can brag about an average home price of $280k.  We are still a great value.  I hope some of this information was helpful.  Feel free to ask additional questions if needed. Thanks!

    1Reply
  • Dale Tucker
    Rental Property Investor · Cincinnati OH · Member since 2012 · 115 posts · 24 votes
    9y
    Hi Dev. My wife Becky is a DFW realtor with KW McKinney and has experience working with out of town investors/buyers. If you send a colleague request I can send you her contact info. FYI we own rental SFRs in the area as well. Good luck in search! Dale
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  • Manuel D ochoa
    Dallas, TX · Member since 2016 · 3 posts · 2 votes
    9y

    Mr. Khosla 

    Some of the best school districts closer to DFW Airport are in carroll, coppell and grapevine. There's plenty of home's around those districts around $250's to $350's.. From an investor point of view.. why not do a conventional loan for $250.. 20% down $50,000 for your home ( long term investment ) than go find another house east Dallas, garland, mesquite, balch springs and buy a $80,000 cash rental property. Use the cash to acquire properties. Get your personal house with a loan, I said conventional with 20% for obvious reasons, but you can go FHA with 3.5% down. Get your self a rental. Remember you don't need a sfh . You can get a duplex, apartment, townhouse or condo. And start making money ASAP :) if you want to talk about it feel free to reach out. Hope this helps.

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  • Andrew Herrig
    Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
    9y

    @Dev Khosla As others have mentioned, an investment property in the $400k+ range doesn't make much sense in Dallas unless it is a multifamily. You could buy yourself a pretty nice house for $300k in the northern suburbs AND pick up a solid rental property for $100-150k. 

    I don't see a 20-30% decline in values anytime soon (didn't even hit that in the 2008 crash), but I think prices will have to level off soon as median buyers start to get priced out of the market with interest rates and property taxes continuing to increase. 

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  • Dev Khosla
    OP
    Prosper, TX · Member since 2016 · 7 posts · 0 votes
    9y

    @Andrew Herrig I think the only major concern with my decision to move to Dallas was around the possible decline in values. As it is a longer term investment I am ok with prices leveling off or some correction.

    Looking at listed homes I am seeing some price reductions on higher value properties. Unfortunately our family needs require 3000 SqFt and I am unable to find a 3000SqFt home in the good schools for under $350000. Am I looking in the wrong place? What is a good source of these listings.

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  • Dev Khosla
    OP
    Prosper, TX · Member since 2016 · 7 posts · 0 votes
    9y
    Thanks for the introduction Dale. I currently do have a realtor (actually a referral for a KW realtor from my KW listing agent in FL). I will definitely ping you if it doesn't work out with them.

    Originally posted by @Dale Tucker:

    Hi Dev. My wife Becky is a DFW realtor with KW McKinney and has experience working with out of town investors/buyers. If you send a colleague request I can send you her contact info. FYI we own rental SFRs in the area as well. Good luck in search! Dale

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  • Dev Khosla
    OP
    Prosper, TX · Member since 2016 · 7 posts · 0 votes
    9y
    Mr. Ochoa

    That is an excellent idea and would keep that in mind. That was our plan when we bought this home in FL but couldnt gather enough cash previously.

    Thanks.

    Originally posted by @Manuel D ochoa:

    Mr. Khosla 

    Some of the best school districts closer to DFW Airport are in carroll, coppell and grapevine. There's plenty of home's around those districts around $250's to $350's.. From an investor point of view.. why not do a conventional loan for $250.. 20% down $50,000 for your home ( long term investment ) than go find another house east Dallas, garland, mesquite, balch springs and buy a $80,000 cash rental property. Use the cash to acquire properties. Get your personal house with a loan, I said conventional with 20% for obvious reasons, but you can go FHA with 3.5% down. Get your self a rental. Remember you don't need a sfh . You can get a duplex, apartment, townhouse or condo. And start making money ASAP :) if you want to talk about it feel free to reach out. Hope this helps.

    0Reply
  • Ben H.
    Real Estate Investor · Frisco, TX · Member since 2015 · 40 posts · 4 votes
    9y
    Hello Dev. The good news is that with your requirement of being within 1.5 hours of DFW airport, you could technically live in Oklahoma. :) There are always pockets that differ from this logic but typically, the further north you go from DFW, or the closer you get to Ft Worth, the better deal you will find. I currently live in Frisco but it is becoming congested and the existing homes at $400k or above are starting to sit. You at correct in that it would be a challenge to find a home over 3,000 sq ft for $350k or below. One place I would recommend looking is in Celina which is about 15 min north of Frisco and where the sprawl is expanding to. They expect to be close to 100k population by 2024 I believe. Look in the zip code 75009 there is a subdivision called Carter Ranch among one of the areas you can still find the square footage you are looking for. There are a ton of communities here like that in towns like McKinney, Anna, Melissa, etc. Get a realtor that knows the area and you should be good on the primary residence. As far as the investment property is concerned areas closer to Ft Worth seem to be the better deal these days. Good luck!
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  • Dev Khosla
    OP
    Prosper, TX · Member since 2016 · 7 posts · 0 votes
    9y

    @Ben H.

    I thought of OK too, however the state income tax kills it.

    Thanks for communities though. will check Celina and others you suggested.

    DK

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  • Philip Postel
    Title Representative · Dallas, TX · Member since 2016 · 12 posts · 5 votes
    9y

    Agreed with Andrew.  Unless you are leaning heavier on it being a primary residence, I would re-think the price point and area.  If you are looking for a rental, you should look at using the cash in hand as your down payment and look for a few rentals.  John Larson with AREI could sell you cash flowing investment properties around DFW in the 125K-175K range and Andrew could help you get them financed.  

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  • Doron Nissim
    Real Estate Investor · Boca Raton, FL · Member since 2015 · 83 posts · 21 votes
    9y

    @Andrew Herrig hey man

    can you send me your available properties in your area?

    i need to buy off market properties in dallas  50-70% market value..

    let me know

    Andrew Herrig

    Andrew Herrig

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