Hi everyone! I am just starting out, right now I am thinking of buying a 2-4 unit MFR in DFW and living in one of the units so I can take advantage of the owner-occupied loan options.
The problem is, I am having trouble narrowing down the particular part of DFW I want to concentrate my search. Depending on who you talk to, there are about 6-7 million people in the Metroplex and growing. It's a sprawling urban area with tons of sub-markets to consider. Needless to say, it's pretty overwhelming.
I know this is very region-specific, but what it basically boils down to is whether I should get a duplex in an area with a nice school district (N. Arlington/HEB), or a quad in an area that caters to college students (TCU in Ft Worth or Denton)? My main concerns with the first scenario is that the duplex will not generate the revenue to cover all expenses, and from what I can see quads are hard to come by. In the second scenario, I am worried about the kinds of reckless tenants a college town attracts, and it would mean a longer commute to work for me.
Anyone been in this boat?
In DFW, the commute time would be a major consideration for me. I am assuming you work in Grapevine so from TCU, you are looking at 45 minute to 60 minute commute each way. I35W is going through a major expansion so it is more of a "parking lot" than usual these days. Denton might be slightly better going south to Grapevine, but this also can be stressful. Arlington and HEB seem the most favorable based on commute time.
Of course, you need to look at the availability of MF in these areas. I did a quick MLS search and found 11 properties in Arlington ISD. All of these are near the UTA campus. These MF range from $92K to $400K. HEB has six MF, four north of 121 and two south of it. Tarrant County College is in close proximity. These six MF are between $150K and $300K.
It looks like Arlington/HEB win out for me. I hope this helps.
That helps a lot, thank you! I've been going back and forth but I was forgetting about UTA. That's a great area for me to look into.
In either situation you'll obviously want to make sure that it cashflows well. Regarding school districts, I think that the type of tenant who cares about a good school district will likely be looking for a single family home instead of a duplex (unless it's a large duplex). That's a generalization, but in the areas you're talking about you can usually rent a single family home for not much more than a duplex, so families prefer that. Unless the school district is in super high demand, like in Richardson, where people are going crazy trying to find places to live.
As far as renting to college students, there are some things you can do to protect yourself, although nothing is guaranteed with any renter. You can ask for larger security deposits, rehab the units with tougher materials, and make sure the parents co-sign the leases. College students also tend to move every year, so although there may be a steady supply of tenants, there will also be annual turnover. If you targeted an area with working professionals instead, you might have less turnover and find a few people who stay 2-3 years.
The real question to ask, since you plan to live in the building, is whether YOU want to live next to college students. I assume you'll also be acting as your own property manager. If you choose to go the college route, I would actually make it clear to prospective tenants that you're the owner and you live in the building. That could help weed out the college partiers who would be nervous about an on-site landlord.
Duplexes and MFs are pretty expensive in DFW proper right now. Best of luck with your search!
Sounds good but agree living with college students can be a drag. I did RE around UTA years ago and it was transient students every- year lots of make ready for the Fall semesters...
Watch out for TCU the City of Fort Worth put new restrictions on "stealth dorms" be sure its permitted prior to purchase.
I personally wouldn't want to attract college students because of the turnover and potential damage. As someone already mentioned I would consider being close to where you work a major factor in where you buy. I think you are on the right track because Tarrant county is one of the only areas left in DFW that has any reasonable inventory for multifamily.
I personally wouldn't worry about the school districts as much because you generally wont be attracting families with a quadplex. Unless the concern is that you have a child yourself of course. More important factors I would be focusing on would be crime rates, proximity to jobs and the condition of the building.
You can use trulia crimetracker to get a feel if an area is safe. I will warn you that Arlington and Fort Worth can be very hit or miss as far as crime. HEB and Denton are fine. Honestly there are jobs all over DFW. As long as you have a quality building and below market rents you will have no shortage of renters.
Hey Chloe- I'm starting out in Ft Worth as well. Just some info for you regarding TCU-Some knowledgeable folks have told me that TCU ultimately wants all students living on campus (not a large population anyway). And as Thurman stated, the zoning is changing and they may tighten up regulations on renting. Let me know what you end up doing, because I'm still trying to find the "right" area around here. Good Luck!
Here is the first three paragraphs from a Fort Worth Star Telegram article, dated October 5, detailing the information on the new restrictions. I just did a search on Google on Stealth Dorms to find it.Proposal to restrict ‘stealth dorms’ faces opposition
Fort Worth’s proposed ordinance to restrict the number of unrelated adults who can live in a single-family home from five to three in TCU-area neighborhoods — and the possibility of not grandfathering existing properties — is facing stiff opposition from investors, Realtors and developers, who say it is a break of trust with the city.
Not grandfathering in some properties to allow the practice to continue,...., is an infringement on property rights and is an economic hardship on the owners, said a group of investors and Realtors representing over 300 properties in the overlay. The investors, many of whom also live in the proposed overlay area, have pooled funds to hire an attorney to represent their concerns in the zoning case.
“We did it how they said to do it,” Kyle O’Keefe, an investor and resident in the overlay, said of the homes they built. “If they go back and change it, that is a break of trust. That is saying, ‘Hey, you guys come in and invest in our city make it a great city and then we are going to screw the hell out of you in a couple of years.”
I am in the process of selling a property a college town (OSU) where they have created a similar ordinance as the one being talked about by TCU. My property is a 5 bedroom, so renting to just three didn't make since
@Adam Wright Correct me if I'm wrong but, would you still be okay as long as there weren't more than 3 un-related adults in the same unit. So for example a duplex with 6 ppl (3 per unit) would be okay?
I was planning on selling house at OSU so I could do something similar down here, but I had no idea they were trying to do the same thing here.
@Chloe Thomas keep us posted on how your search progresses, and good luck!
Good question. I am not an attorney so I can't give legal advice. I put the question to someone I know in the CFW planning department. I'll let you know their answer.
I did notice the article did not seem to focus on MF. SFR was used repeatedly in the article.
Does anyone else in the BP community know?
I know I am late to the discussion but in case you all haven't found out the details about the TCU Overlay here is a link to it, and it goes into affect March 31st.
The grandfather clause was passed, so long as the particular property has not been unoccupied for 24 consecutive months and it is registered with the city before the date this goes into affect.
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