How worth is Multi family investing in Texas?

Question

My partner and I are interested in investing in Multi family in Texas. We both have family in Dallas so we know the area pretty well and have around 400k in capital to work with. Does anyone know if Multi family is worth it at the current moment or should we scale to single family instead? Appreciate anyone’s time.

Effram Barrett · Answer

I think @Michael Le would have some insight if he has time to answer. He does multi family in Texas.

Mike Krieg · Answer

Texas is getting expensive for MF deals. You need to be very picky. We have high taxes and insurance so a lot of syndications are too expensive at current prices. Just make sure your syndication partners aren't trying to outbid the wealth preservation buyers who are coming in. That's a recipe for disaster.

Michael Le · Answer

Thanks for the shout out, Effram.

@Anthony Ampaipitakwong, a lot of it depends on your goals. Scaling via single family is hard but if you don't have capital then you have to start somewhere and that is a bit easier. But if you have capital then I don't see a reason to do single family. I started in single family and didn't see any value of my knowledge gathered there when I made the jump to multifamily.

I just closed on my 6th deal in North Texas. I've also invested in 20 properties as a passive investor, most around DFW too so feel free to PM if you have some questions.

Tony Lin · Answer

@Anthony Ampaipitakwong Texas is indeed getting competitive with compressed cap rates. I skipped single family and went straight to investing in multifamily. I would recommend investing passively in a couple of deals first to learn the ropes and see what the monthly operations look like. This also builds up some credentials when presenting to the lenders/sellers.

Tj Hines · Answer

@Anthony Ampaipitakwong I think you guys have the right aspirations. I wouldn't play around with single family. Much harder to scale than multifamily. I'm not in the Texas market. But I do know it's on fire. Getting direct to the seller would be most beneficial to you as an investor. Focus on off market direct opportunities with the owners.

Travis Watts · Answer

@Anthony Ampaipitakwong I am currently invested in 9 multifamily deals in the suburbs of Dallas. Happy to share experience anytime.

Account Closed · Answer

I know a multifamily syndicator in DFW making good money. It helps to have someone who knows the multi market though.

Account Closed · Answer

@Anthony Ampaipitakwong Depends on the types of returns you're looking for... the DFW area is getting pretty expensive.  We've found success in other Texas markets like Lubbock, Amarillo, and Waco.

Tj Hines · Answer

@Anthony Ampaipitakwong in my opinion if you're looking to score a deal that's worthy getting direct to the seller is key. You have paid services out there that can be costly such as Costar and Reonomy. But you can also pull an off market list of owners using Listsource.com  This works well with our specific criteria that we like to target. Good luck my friend

Paul B. · Answer

Others have already said it, but don't bother with single family if you have hundreds of thousands of dollars to invest. Whether you decide to invest passively or do your own deal, you have more than enough to get started, so there is no point playing with single families.

How worth is Multi family investing in Texas?

Most Popular Reply