Are multifamily units a unicorn in DFW?

Question

Hello everyone,

Has anyone invested in multifamily units in the DFW area lately? I've been looking for a MFU as a first-time home buyer investment, but looks like properties like the one I am looking for are either non-existant or always under contract. Maybe I'm looking at this the wrong way and can use some insights to get a first multi-family under contract.

My criteria is simple: I'm looking for a property that has the best COCRoI and annual cash flow with acceptable investment. Here's an example of my calculation sheet:

Now I have spent about 4 months searching for properties like the 5 plex above but seems like someone has always got it under contract before me. Maybe it's time for me to restrategize and sharpen my axe but if someone has any ideas on how to get Duplexes/fourplexs under contract, particularly in the DFW area, please shed some light here. I'd be happy to add more information.

Cheers!

Milind Shastri · Answer

I agree with that Andrew, the problem with overpaying is that then its too much $ and it hurts the COCRoi and makes an exit of selling off after a few years harder.

Ive noticed that DFW is not the place that I can find a cash flowing MFU at a decent price wrt its market value. I wonder if people have experience with investing further away like Denison, etc and its pros and cons.

Andrew Herrig · Answer

@Milind Shastri Best way to get them under contract is to overpay.

But seriously, there are relatively few 2-4 units properties in DFW, and it is very rare that you will find one that cash flows. I have a duplex in Richardson, but I bought it in 2013. If you bought it today, it would cost a least twice what I paid.

If you're set on finding a small multifamily, keep doing what you're doing. Be ready to jump on a deal the same day it hits the market. Or get a list of your target properties and start marketing to them so that when they are ready to sell they think of you first.