THE DFW DIFFERENCE
By Mark Allen, CCIM
June 3, 2019
DFW continues to attract capital from all corners of the world. We have recently conducted transactions with parties from Japan, China, Canada, and Seattle to name a few. According to Real Capital Analytics over 12,800 units changed hands throughout DFW. These findings reflect transactions of 50 units above from January 2019 to May 31, 2019.
Many out of state investors are attracted to the diverse economy, the ability to buy more units, and our relatively short eviction process as compared to other states.
Dallas Fort Worth presently has 22, Fortune 500 companies, Microsoft, General Motors, and State Farm to name a few. According to Careerbuildier home health, nursing and renewable energy jobs top the list of fastest-growing jobs between now and 2023. Often the numerous small businesses that are created to service larger corporations don’t make the headlines however are very significant.
The Dallas-Fort Worth region added 116,400 jobs over the course of the year. New York and Houston trailed behind, with 115,500 and 108,300 new jobs per the Buerau of Labor Statistics. According to the U.S. Census Bureau the Dallas-Fort Worth-Arlington area added 131,767 residents from 2017-2018, more than any other metropolitan area in the country, spiking its population to 7,539,711.
The price per door in coastal regions such as New York and California often require substantial down payments, in some cases requiring as low as 50% loan to value. Far too often these assets are acquired for appreciation as opposed to immediate day one cash flow. These investors accustom to only buying 20 units or below can buy 100 if not more units placing only 20 to 25% down.
Unfortunately, things do happen, and evictions are necessary. The DFW eviction process is relatively simple as compared to Los Angeles, New York City, and Chicago where it can take several court hearings and months prior to completing an eviction. Furthermore DFW lawmakers should not have the burden of introducing rent control legislation such as HB 2192, in Chicago. The California Assembly’s Housing and Community Development Committee voted 6-1 to advance Assembly Bill 1482, a statewide rent-control bill. These are constraints that DFW investors do not have to deal with.
Buyers seeking to successfully acquire quality multifamily should put their best foot forward and place aggressive terms in the present heated climate.
