5 DFW multifamily deals analyzed: only 1 cash-flows with leverage

[Grant Ellison]

UPDATE: I ran 5 more DFW deals as promised (see:  https://www.biggerpockets.com/forums/88/topics/1280740-i-bui...). Here's what the reports found.

First, thank you to everyone who gave feedback on the original Stella St report, commentary about unpermitted work as insurance risk and the debt service scenario suggestion. Both are now built into every report.

I picked five actively listed small multifamily properties across DFW (two in Denton, three in Dallas/Garland) ranging from $995k to $7.75mm. Each report includes the same sections as the original (property overview, tax profile, permit history, FEMA flood zone, crime, demographics, walk score) plus the additions suggested in the forums: debt service scenarios at four rate assumptions (8.5%, 7.5%, 6.5%, 5.0%) across both 75% and 50% LTV, with CoC returns.

Here are the reports and the headline findings from each:

1) 1101 N Locust St, Denton — $1.95M, 6 units, 1984 build

https://drive.google.com/file/d/1hAEg6mn0zYRJxGLDPRQR5ToYhWg...

Broker advertises 5.9% cap and claims "fully renovated, all major systems newer." The LoopNet listing literally tags it as "High Vacancy Property", which directly contradicts the broker's "stable in-place income" framing. Only 5 permits in 20+ years, including a 2004 electrical failure where the meter bank burned up. Cash-flow negative at every leveraged scenario including proforma rents. Price needs to drop to ~$1.05-1.15mm to work.

2) 5015 Bryan St, Dallas — $5.36M, 36 units, 1956 build / 2018 reno

https://drive.google.com/file/d/1vsc9VbtsAok4eBFKAseL0XzGAzE...

Broker claims "down-to-the-studs renovation" in 2018 at $51k/unit. No permits found in the Dallas portal for this address. 14% occupancy: this is essentially a vacant building being sold as a stabilized asset at a 5% proforma cap rate. If the renovation is real and the lease-up executes, the deal works with debt financing at 6.5% and below. But the central question: why is a "fully renovated" 2018 property 86% vacant seven years later? That needs an answer before you dig in further, and certainly before you write a check.

3) 5313 Reiger Ave, Dallas — $7.75M, 26 units, 2025 new construction

https://drive.google.com/file/d/1q-fU-QMmp47M8mSXyDxB5oIZPQD...

New construction in Junius Heights, one of East Dallas's best neighborhoods. $298k/unit with luxury finishes. Problem: the deal is cash-flow negative at every 75% LTV scenario, including at 5.0% rates. Even at 50% LTV, you barely break even at 8.5% rates. The tax reassessment from $1.875mm (pre-construction assessment) to $5-6.5mm will add $57-97k in annual taxes. This is an all-cash buyer's deal at 4.6% CoC, or a negotiation play (it starts working at ~$6.5mm).

4) 2718 Cleveland St, Dallas — $995K, 8 units, 1961 build

https://drive.google.com/file/d/1mP6yMt5-sZxaKNoAyaH35oS28iq...

This one actually works. 100% occupied, 6.76% broker cap rate, $124k/unit in The Cedars (gentrifying neighborhood south of downtown). Tax assessment ($925k) is at 93% of asking, so there's minimal reassessment risk. Cash-flow positive at 75% LTV and 7.5%. Rare 3BR/4BR unit mix serves family and roommate demand that most urban multifamily misses. Trade-off: 75215 has an F grade for violent crime (6th percentile nationally). No permit history on a 64-year-old building = budget for deferred maintenance.

5) 5501-5505 Lake Hubbard Pky, Garland — $1.8M, 19 units, 1982 build

https://drive.google.com/file/d/1yaUSpZb8PGYr-nCrKfYZwABn17b...

FEMA Zone A (special flood hazard area). That single fact dominates everything about this deal. Mandatory flood insurance at $15-30k+/yr is a material NOI drag. But the tax picture is interesting: the combined assessment ($2.53mm) exceeds the asking price ($1.8mm), meaning zero reassessment risk and a strong basis for a property tax appeal that could save $17-24k/yr. Units are individually platted condos, creating an alternative exit strategy. Cash-flow negative at 75% LTV with current taxes; barely works at 50% LTV.

Biggest patterns across all five:

— Tax reassessment is the hidden killer on 3 of the 5 deals. If you're buying in Texas and the assessment is significantly below the purchase price, you MUST model the post-sale tax increase. It's not a risk, it's a certainty.

— Permit gaps are everywhere. Only one of the five properties had permits matching the broker's renovation claims. This doesn't necessarily mean the work wasn't done, but it's a conversation you need to have before you close.

— Most of these deals don't work with conventional leverage at current rates. Only 2718 Cleveland generates positive cash flow at 75% LTV and market rates. The rest require price reductions, owner financing, or a successful value-add execution to produce accretive returns.

I'm still offering to run one of these for free on a property you're actively evaluating. DM me an address and I'll put it together in exchange for honest feedback on what's useful and what's missing.

[Nicholas Cokas]

What Actual Deal Analysis Looks Like: Five DFW Multifamily Deals, One Buy

Deal Analysis · DFW Small Multifamily

Grant, this is the kind of analysis that should be the standard on BP but almost never is. Most "deal analysis" posts are napkin math with made-up vacancy assumptions. You actually pulled permits, ran debt service scenarios at multiple rate/LTV combos, and let the numbers kill deals instead of forcing them to work. Respect.

A few things jumped out to me:

On Cleveland St — the reassessment math isn't as bad as it looks

Alex raised a good point about the reassessment delta, but it's worth noting the current assessment is $925K against a $995K ask. That's a 93% ratio. Dallas County typically reassesses to purchase price, so you're looking at maybe $70K in additional assessed value — roughly $1,500–1,900/yr in additional taxes depending on the exact millage rate, not the $8,700 Alex estimated (that assumed a $600K current assessment). That's the difference between "deal works day one" and "deal works day one comfortably." Still the only buy in the batch, and that 3BR/4BR unit mix in The Cedars is genuinely hard to find. Family-sized units in a gentrifying urban core is a demographic play most multifamily investors completely ignore.

On Bryan St — the vacancy tells you everything

You asked the right question: why is a "fully renovated" property 86% vacant seven years later? I'll add a layer to that. Zero permits on a claimed $51K/unit renovation isn't just a due diligence flag — it's an insurance underwriting problem. If you buy that building and file a claim on any of that "renovated" work, the carrier can deny it on the basis that unpermitted modifications void coverage on those components. I've seen this play out on denial appeals. The carrier pulls permit records, finds nothing matching the scope of work, and suddenly your $200K water damage claim becomes a $0 payout. That's not theoretical risk, that's how carriers actually operate in Texas.

The real pattern across all five — and it's not just DFW

Tax reassessment, permit gaps, and negative leverage at market rates aren't DFW problems. They're 2025–2026 small multifamily problems nationwide. The deals that actually pencil right now share three traits:

1. Assessed value already near market so there's no tax surprise
2. In-place income from long-term tenants — not proforma projections
3. A unit mix or location characteristic that creates organic demand the owner doesn't have to manufacture

Cleveland St hits all three. The other four hit zero.

On the Garland flood zone play — the condo platting is the real story

Everyone's going to fixate on the FEMA Zone A designation, and they should. But individually platted condos in a flood zone create a specific exit strategy most people miss: sell units individually to owner-occupants who qualify for NFIP policies at residential rates (significantly cheaper than commercial flood policies on the whole complex). You'd essentially be buying at a flood-zone discount on the portfolio and selling at a reduced-but-less-discounted price per unit. Whether the spread is wide enough to justify the execution risk is the question, but it's not the "obviously skip" deal it appears to be on the surface.

Good work. This is what deal analysis is supposed to look like.