The DFW market seems like a great market,I've specifically been looking into Arlington.

Could some of y'all DFW natives tell me a some pros and cons? and what parts of the city is great and not so great. Also, anything important about it that I should know.

I would greatly appreciate the feedback, thanks!

Arlington has always had strong demand for rentals. Properties there are tend to be older and more affordable. I view Arlington as more cash-flow investing than appreciation. 

Depending on your goals. You may want to look more at the suburbs for appreciation. Lots of strong growth due to the crazy number of corporations relocating to North Texas area. 

Thanks for the info Klye!

I have noticed a lot of these properties in Arlington do get pretty close to the 1% rule. I'm assuming the Northern areas don't hit the 1% rule, but definitely do appreciate a lot more like you mentioned. 

Would those appreciating Northern cities be for example McKinney and Denton?.....Or would you consider different cities? I'm just trying to get the idea of where the growth is going, I'd like to pick up properties in the path of progress.

@Kyle Mccaw

@Isaias Velasquez

Good morning,

I’ve had a lot of luck in Melissa for our of state investors. The price point between $245k - $265k gets a home home built 2015 or newer, with high quality tenants, rented in days. It does not do 1% yet, but the demand is so high it will get there over a few years.

This IS the path of progress, with a new freeway headed in there with in 5 years this new up and coming town becomes 20 mins from HUGE employers like State Farm, Toyota, HP, Pepsi, etc. Currently it is 5 to 10 mins from a large and growing Gov’t contractor Raytheon.

Up the road slightly lower cost is Anna, and Van Alstyne fit the same bill as new and in the path of progress. If you look at a map for McKinney, then head north on The US 75 you can find them.

Other great areas to consider are out West towards Denton, Little Elm, cross roads, Aubrey,

One big thing to be aware of is the reason big name employers are flocking to Texas is there is no employment tax, so Texas gets its revenue for schools and roads from property Taxes. We have higher than normal property taxes. Please keep that in mind for any Texas investments.

@Roland Brown wow man, thanks so much for this helpful information. I really do appreciate it!

I’ve made sure to writer all this down.

I’ll look into all the places you mentioned.

Do you have any suggestions on things I should look up as well to learn about these markets?

I’d like to put my own work into really learning this market, I just don’t know exactly how to?

My strategy is just talking to folks like you guys :)

So thanks!

DFW is a huge market, different areas are going to have different levels of demand, types of renters and strategies for exiting.  I’m alway glad to jump on a phone call and answer questions, it’s hard to really know a market without driving it but I’ll narrow your focus down to most important points. 

@Isaias Velasquez Yes McKinney and Denton are good. Anything really North, East or West of the loops is good. But the areas below we so strong demand for rentals and expect values/demand to continue to increase. Every part of DFW can brag about something. I would personally stay out of the cities of Dallas, Mesquite. Neither are landlord friendly. 

Looking at a map: 

Hwy 75 McKinney going North to Denison.

Hwy 380 Between Denton and Princeton

I-30 East of Dallas to Greenville. I am making an offer on a Caddo Mills, TX property today.

I-35W Fort Worth to Denton 

Hwy 287 North Forth Worth from I-35W to Rhome.

Hwy 114 From Roanoke to Bridgeport

I-20 Weatherford to Fort Worth

Other town to look at Burleson, Cleburne, Midlothian, Mansfield

@Kyle Mccaw

That’s great intel Kyle, I was not aware Mesquite was not landlord friendly, I knew Dallas was not so hot.

@Kyle Mccaw excellent breakdown of the DFW market. Good luck on the offer you are making. 

Excellent information Im also looking at Arlington for rental property.  For those who are familiar with Arlington what do you think of this property as a rental investment?   

Also how does property management rates work in this area?  Using this property below what could I expect to pay each month for property management and what does it include?  Im looking for something almost completely hands off because Im not familiar with the area and I also live/work overseas(US Citizen).  

https://www.zillow.com/homedet...

$162,000

2 bd1 ba1,114 sqft

2404 Arapaho Dr, Arlington, TX 76018

I normally say draw a big circle around DFW and it seems to me the overall better investment places are along those outer borders....that's if you like newer 3/2/2 type properties under $200K.  Most of these probably won't meet the 1% rule though unless you get really lucky.

If you like older properties Arlington might be a place to look.  You might get closer on some properties to that 1% rule.  Seems like there is a big supply for 1950s 3/1/1 type homes.   Some of these might need a good deal of rehab.  I like the pier and beam homes better in this price range than the slab homes.  

I like the cities like Anna, Celina, Melissa if you can find the right properties.  Typically you can get newer properties...10-15 years old, vs 50 years old in parts of Arlington.  You might also look at places near Decatur, TX, lots of activity there.   The other places that look interesting now is between Ft.Worth and Weatherford.  Lots of growth.

@Jason Pan I know a good property management company if you are still looking - it would cost 1/2 first month rent then 10% after that. I live in Arlington and looking to start investing next year. If you needed some to go look at a property I could do that as I am looking to learn.

Thanks Michael,  I found a property management company last week.  I'll give them a shot first, they seem good so far

I actually spent some time doing research for all DFW. As an investor in real estate I wanted to find properties selling under market. I created a process where I can get all properties in DFW selling under market. I've noticed Fort Worth is becoming a hotbed for these types of properties. For example, I pulled a property up today that is selling for more than 50K below appraisal in south Fort Worth. 

2718 S Jennings Avenue Fort Worth, Texas. Listed for sale at $229,000

Check out the county appraisal: https://www.tad.org/property/0...

You can find others like this in a list I published on https://www.discountxchange.co...

or

You can go to see a visual of these properties on a bubble map https://www.discountxchange.co... 

I know tons of people on the mortgage and real estate side in DFW who can help.

@Rick Reyes thanks for sharing this. It is interesting to look at these properties and see the story behind them. Looking at the sales, mortgage and listing history you can see this was fix and flip job that didn't work out as planned. It may be a good deal at today's asking price. But it looks like one of the large wholesaling firms sold a pipe dream to another out of state buyer. The wholesaler had the buyer use their in-house hard money lender... Always use a 3rd party hard money lender. They will help keep it honest. Out of state buyer borrowed $216k, did the rehab and listed it for $299k. It sat on the market for 5 months until it was listed at $249k. Now it is listed as a bankruptcy listings for $229k. It has follow out of contract already once in the 12 days it has been listed. CoreLogic's RealAVM suggests the value range to be $227k with a range of $215,650-$238,350. 

My point is be VERY CAREFUL of wholesalers that take advantage of novice or out of state buyers. This specific wholesaling firm is well known for over estimating ARV and underestimating the rehab expense. Most of these wholesalers are just kids that have never actually owned an investment property and never paid to rehab a property. And never will. Now some person sitting in California lost a bunch of money.

I do believe it important to note that you are using tax values in your estimates and not market value. In many cases there can be a big difference in the two. The tax appraiser often overvalues distressed properties because they do not know the poor condition of the property.

For the folks familiar with Arlington and DFW area, do you find zestimate rents are in the right ball park?  Trying to do some research on the right areas for that rental yield.  

Originally posted by @Moses Lo :

For the folks familiar with Arlington and DFW area, do you find zestimate rents are in the right ball park?  Trying to do some research on the right areas for that rental yield.  

Inconsistent at best, but there are better ways to get rent rates. I'd love to chat about it though, so feel free to reach out to me.

 

@Kyle Mccaw how about the price range around 400k? Still see good appreciation in that price range? 

For 200k range, even 10% of growth it still not good enough equity build for holding, IMO.

@Vincent Chen    No one can tell you where appreciation will go, but I always suggest people back into the numbers.  What income does it take to buy a $200,000 house.  How many people are in the income bracket.  At what price points do investors like to buy?  I personally think there is a lot better chance the $200K house in Dallas doubles in value in X years vs the $400,000 or the $750,000 house.   If we use the 1% rule for simplicity there are a lot more people who want to rent at $2000/month vs $4000/month.  That $4000/month market is pretty thin and gets thinner the more you move up the price range.   Everyone has a different model and I've seen some different models work for people, but I think your $400K rentals will have more turnover, and higher vacancy due to the price point so model that in.

This is great information everyone!

We have SFHs in the Houston and DFW areas. A few things I'd add for someone starting out:

*Property Taxes. Don't rely only on the numbers listed by sites like Zillow.  Some counties have multiple taxes, and I've noticed that the  "Zillow-type" sites don't always catch them all. Verify your figures with the appropriate county websites

*Insurance:  Some companies won't want to cover homes built in the 1950's, as these homes often have older plumbing and electrical, and potentially  asbestos siding.  Repairs can be costly.  Find an insurer who will cover these, or be prepared for higher rehab costs.

Best of luck!

Good information. Thanks for beginning this thread Isaias. Thanks to those who shared. This thread has made me rethink the D/FW market. I will continue to invest, just opening up to other area's.  I like Bruce Lynn's suggestion of drawing a big circle around the D/FW market. I'm at the point where I'm ready to invest in my second property. Good luck to everyone, and may 2021 be our best year yet.