House Hacking a Dallas Duplex With No Initial Cash Flow—Worth It?

Question

Hey everyone!

My husband and I are looking at purchasing a duplex in the Dallas/Plano area. Based on today’s numbers, it doesn’t look like it will cash flow right away. Our plan is to house hack by living in one unit while renting out the other. We can comfortably afford the payment, and our goal is to build equity over the next several years rather than maximize cash flow on day one.

I know the Dallas market has been challenging lately with higher interest rates and tighter margins, so I’m curious if anyone else has bought a property under similar circumstances.

If you’ve done a deal like this:

• Did it end up paying off in the long run?
• How long did it take before you started seeing positive cash flow (if you did)?
• Looking back, would you make the same decision again?
• Any advice for someone buying their first duplex in the current Dallas market?

We’re trying to think long-term and would love to hear real experiences from investors who have navigated this market. Thanks in advance!

Harrison Sharp · Answer

Hey Ira!

I'm a real estate broker here in DFW and have sold over 160m in the last 5-6 years or so. I got my start in real estate investing through house hacking and have helped probably 30 or so other clients do the same.

Its way more challenging right now with how the market is on the rate and price front as you mentioned but its only gotten less affordable since i started. There is a ton of pent up buyer demand and anytime rates have gotten into the high 5's in the last four years that's really when we see an uptick in the buyer activity and mortgage applications. As long as you're playing the long game and aren't cutting a huge check each month (breakeven is decent for an on market deal in a livable area right now), you should get a chance to refi at some point. Rents also typically increase over time as well.

I would just make sure your PITI is covered by the as-is rents once you move out. A lot of the good areas will hold their values and have a ton of rental demand.

If you want to chat more shoot me a DM!