I learned that cash flow is pretty difficult in DFW. So wanted to check with this community about which are the cities which have highest appreciation potential in 2-5 years near term.
Rental Property Investor · Carrollton, TX · Member since 2013 · 750 posts · 538 votes
3y
Buy a distressed house at a discount and fix it up thereby creating your own equity through the process. Then you don't have to worry about appreciation or a huge out-of-pocket downpayment. Cash flow will be minimal, but should be there. Sell in a few years and cash out that equity and reinvest. Easy process to repeat.
Real Estate Agent · Arlington, TX · Member since 2016 · 151 posts · 54 votes
3y
I believe that when one city in the DFW goes up, it will affect the surrounding cities as well. Do you have a city that you're interested in DFW? I invest in Arlington and we love it.
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
3y
@Nitin Gove as a whole, Dallas Fort Worth is one big city. Nothing gets left out. It is proportional to how much you spend and if you do any value add to the property.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
Nice question, but not easy to answer. I can say Highland Park and Southlake have been high appreciation markets, but they're not always the easiest on ROI and purchase price. Normally HP is probably $4mil entry point and your monthly ROI or rent coverage will likely be horrible. I expect the same with Southlake, but maybe 1/2 the entry point at maybe $2mil. Obviously there are exceptions....but that is my throw out number when people ask.
So you see there are a lot of other factors that just go into cash flow or appreciation. You could say what are the highest cash flow type areas, but that might mean rougher neighborhoods, with older houses, more crime, more headaches.
Generally when looking for investment property with a nice combination of ROI/appreciation/debt coverage... look north of 380 between Decatur and Greenville....all the way to the Ok border. Not perfect today, but the growth will come. Places like Sherman, Howe, Gunter, Van Alstyne, maybe Anna. Not a fan of Princeton, but maybe Greenville.
I learned that cash flow is pretty difficult in DFW. So wanted to check with this community about which are the cities which have highest appreciation potential in 2-5 years near term.
Also cash flow is a function of your down payment for the most part. Breakeven probably with 30-35% down...maybe cash flow with 40% down or more.
Rental Property Investor · Carrollton, TX · Member since 2013 · 750 posts · 538 votes
3y
Buy a distressed house at a discount and fix it up thereby creating your own equity through the process. Then you don't have to worry about appreciation or a huge out-of-pocket downpayment. Cash flow will be minimal, but should be there. Sell in a few years and cash out that equity and reinvest. Easy process to repeat.
I believe that when one city in the DFW goes up, it will affect the surrounding cities as well. Do you have a city that you're interested in DFW? I invest in Arlington and we love it.
what do you think about Little Elm, Plano area? I am interested in those area but not sure about the appreciation.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
Little Elm....people typically aren't real thrilled with schools. Location is not all that great either. Lots of rentals there.
Plano...very popular years ago...maybe 20-25 years ago. Still a great city to live in. However the stock is getting older now and much probably needs work, updating, and what most investors end up looking at often has foundation issues. Prices are pretty high vs age. Probably better in many cases for owner/occupied homes vs rentals because rent hasn't kept up with prices.
Better to look further north of here probably where rent/price might get you better ROI.
Little Elm....people typically aren't real thrilled with schools. Location is not all that great either. Lots of rentals there.
Plano...very popular years ago...maybe 20-25 years ago. Still a great city to live in. However the stock is getting older now and much probably needs work, updating, and what most investors end up looking at often has foundation issues. Prices are pretty high vs age. Probably better in many cases for owner/occupied homes vs rentals because rent hasn't kept up with prices.
Better to look further north of here probably where rent/price might get you better ROI.
Thanks for the information, Bruce. Which area further north would you suggest?
I learned that cash flow is pretty difficult in DFW. So wanted to check with this community about which are the cities which have highest appreciation potential in 2-5 years near term.
If you could send me 10 zip code surrounding are I can send you the forecast.
Rental Property Investor · El Paso, TX · Member since 2018 · 82 posts · 49 votes
3y
I honestly don't see a price difference between Plano and communities further north like Frisco, Prosper or even Celina. Yes you get newer housing stock up north but with the DFW population moving north, that moves the center of population closer to places like Plano/Richardson. You can't beat that location for easy access to pretty much all the hotspots: 121 corridor, DNT corridor, North Dallas with Prestonwood and Highland Park, M-Streets, Addison. Love Field, DFW airport etc. Frisco is nice but it's too far to access much of Dallas conveniently. Just my two cents.
I learned that cash flow is pretty difficult in DFW. So wanted to check with this community about which are the cities which have highest appreciation potential in 2-5 years near term.
If you are buying with the only hope of making money is appreciation stop, not smart, Cash flow is king, any appreciating on a bonus.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
Quote from @Account Closed:
I’d love to hear y’all’s opinions on the 380 corridor between Denton and Decatur
Certainly picking up steam. One trick is I don't see a lot of what I would think are good rental type properties close to the highway. Another is, there is LOTS of land that way. However if you can find the right deal, should be a good place long term. I like a little bit north better....Krum, Sanger, Pilot Point, Aubrey.
I would probably look at anyplace between McKinney and Sherman and including Sherman...Celina, Melissa, Anna, Howe, Van Alstyne, maybe Gunter. That's all long term, buy and hold and rent type properties. Almost all those cities will 10x in size in next 10 years probably. Maybe some other cities like Bonham might have potential. Long Long Term probably Greenville. I'm not sold on Princeton....in a neighborhood there last week and way too many rentals...and that particular neighborhood I don't think will fare well long term with too many rentals. Probably a lot of newer neighborhoods like that in Princeton.
I’d love to hear y’all’s opinions on the 380 corridor between Denton and Decatur
Certainly picking up steam. One trick is I don't see a lot of what I would think are good rental type properties close to the highway. Another is, there is LOTS of land that way. However if you can find the right deal, should be a good place long term. I like a little bit north better....Krum, Sanger, Pilot Point, Aubrey.
Bruce, thank you so much for your insight I will definitely keep my eyes open in those areas for my next property
I believe that when one city in the DFW goes up, it will affect the surrounding cities as well. Do you have a city that you're interested in DFW? I invest in Arlington and we love it.
HI @Jennifer Volek, what do you love about investing in Arlington in particular?
I learned that cash flow is pretty difficult in DFW. So wanted to check with this community about which are the cities which have highest appreciation potential in 2-5 years near term.
give me all the zip code and I'll try to decipher for you.
Investor · Member since 2022 · 235 posts · 127 votes
3y
We had some SFR in Dallas that got wrecked with new property tax appraisals, have small multi-families experienced the same fate? One of the primary reasons that CF has been tough.
We had some SFR in Dallas that got wrecked with new property tax appraisals, have small multi-families experienced the same fate? One of the primary reasons that CF has been tough.
Contesting your property tax assessment was a must this year. Frisco overshot my rental by 125k. It's good to have an automated service like Ownwell in place for homeowners in Texas. Makes sure you don't get caught off-guard, saving you and your future buyers a ton of money YoY.
Investor · Frisco, TX · Member since 2020 · 20 posts · 17 votes
2y
@Jason Sung my experience with Ownwell has been great, they make it very hands off for the owner. I'd recommend it. I'm sure there are other service providers out there, though I haven't done any comparisons.
@Jason Sung my experience with Ownwell has been great, they make it very hands off for the owner. I'd recommend it. I'm sure there are other service providers out there, though I haven't done any comparisons.
Buy a distressed house at a discount and fix it up thereby creating your own equity through the process. Then you don't have to worry about appreciation or a huge out-of-pocket downpayment. Cash flow will be minimal, but should be there. Sell in a few years and cash out that equity and reinvest. Easy process to repeat.
Hi @Andy Webb What would be your recommendation for buying a distressed property in this market in DFW? Most people do not have enough cash to buy a distressed property that banks do not lend. Also, using hard money in this market is very risky.
Buy a distressed house at a discount and fix it up thereby creating your own equity through the process. Then you don't have to worry about appreciation or a huge out-of-pocket downpayment. Cash flow will be minimal, but should be there. Sell in a few years and cash out that equity and reinvest. Easy process to repeat.
Hi @Andy Webb What would be your recommendation for buying a distressed property in this market in DFW? Most people do not have enough cash to buy a distressed property that banks do not lend. Also, using hard money in this market is very risky.
Hi Jason - Why do you view HM in this market as being risky? If your numbers work and you are buying with a decent equity buffer, I don't see a problem. In fact, in most cases I would prefer to buy with hard money or some type of private money - I will have a lower out of pocket = lower capital at risk in the long run.
We are shopping for properties in the DFW area (and elsewhere) right now, and mostly look for distressed houses that we would buy using Hard Money. Know your numbers, know the cost of renovations, and have a clear game plan to buy, do the rehab and get back out into conventional or some sort of commercial/DSCR product on the back end - you should be fine.