Cash flowing properties in Dallas?

Question

Hi everyone,

New member here! I’m moving to Dallas soon and was interested in buying a house but the market is obviously a bit expensive now so I may wait a bit. I want to live in my house for a year then rent it after. my question is to those of you in Dallas. Is Dallas a pretty tough place to look for cash flowing properties? Everything I saw on Zillow were homes selling for 250-300k (my price range) and renting for 1500-1800 a month which following the 1% rule (I know it’s not a perfect rule) but I couldn’t find anything that looked close. What are your thoughts on finding cash flowing properties in Dallas? I’m targeting a 8-10% CoC return. Are there any specific neighborhoods that present opportunity?

Jacob V. · Answer

Hey @Alec Strahl, I would look into renting by the room as well.  If house hacking, it's easy to start as rent by the room and creates higher cashflow on the backend (around 1%).  Depending on where you want to live there's more neighborhoods that will cashflow by the room vs renting the whole house.

Adam Ward · Answer

I was in a similar situation to you when I first moved to DFW, and actually ended up buying my first property at market value and house hacking. Fast forward and my home value has risen substantially, almost making it a 1% house due to rising rents in the area and market appreciation.

I started by checking out the DFW REIA and a few real estate meet up groups to network, you'll find some quality people there and may make some good contacts. The DFW area is massive and there are tons of these. Facebook also has DFW specific real estate groups that will post "off market" and wholesale deals. In any of your endeavors, I encourage you to be discerning and do your due diligence on the property before making a purchase.

Lucia Rushton · Answer

@Alec Strahl A couple of thoughts - have you seen the latest BP video about 1% rule? It's on YouTube, super informative!

If you have little experience with Real Estate, I highly suggest having the guidance of a professional Realtor, especially one who understands the house hacking that you want to do.

In today's market, buying from a wholesaler will require a non-refundable deposit, no inspection, no due diligence, no one advocating for your best interests, and right now we've seen many wholesale 'deals' equal to or greater than market price (so what's the point?). Lastly, you need to pay with cash or HML, no conventional financing available.

Hope this helps, Best wishes!!

Bruce Lynn · Answer

@Alec Strahl   1% is hard to do up front in many cases, but rents are improving very quickly in DFW.  So the one year could stretch into 2-3....

More cash down should increase your cash flow....could depend if you put down 3-3.5-5-10-20% or more.

Be very very careful with wholesalers pitching "off market" properties.  Often the ARV is way too high and the repairs way too low.  Off market is just a marketing term, it doesn't mean "good deal".  When 40-50 people show up at a Friday afternoon 1 hour showing to bid on "off market" property with a $5000 non-refundable deposit, I would say they are very much ON the market.  So don't be fooled by crazy marketing pitches.

Nick Belsky · Answer

@Alec Strahl

Finding listing on MLS that works is going to be tough.  Reach out to wholesalers on BP or LinkedIN... finding off market deals right now may be the best way to hit the numbers you are aiming for.  Dallas is still a pretty hot market and getting anything under value will be a challenge. You will have better luck in the off markets.

Cheers!

Nick Belsky

Alec Strahl · Answer

Thank you so much! When finding stuff off market how do you recommend finding a quality wholesaler? Is there any word of caution against that in terms of them actually owning the house compared to just owning the contract on the house? I have never worked with a wholesaler before.

Thanks!

Cash flowing properties in Dallas?

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