An investor just venturing into the thriving Dallas-Fort Worth metropolitan area real estate market has well over 100 property investment companies to choose from. These include very large national companies, as well as mom-and-pop businesses with no more than a property or two in their portfolios.
The multifamily real estate market is particularly active in Dallas-Fort Worth and its suburban areas, and a market the experts are keeping a constant watch over to ensure they stay ahead of it. While there are undoubtedly compelling opportunities in Dallas multifamily housing, you should exercise caution when choosing an investment company here to ensure you’re working with the right firm.
Questions to Ask Potential Real Estate Investment Companies
Dallas-Fort Worth is the fourth-largest metropolitan area in the United States. It is home to more than 7 million people and is expanding rapidly. In March 2017, it had added 100,300 jobs year-over-year, up 3.7%, compared to a national growth rate of 1.5%. Dallas-Fort Worth attracts a steady stream of young renters and that demographic is expected to expand 9% by 2022, according to a Fannie Mae report.
In this flurry of activity, there are many investment options in multifamily development and real estate. Investors should examine their choices carefully, and an excellent way to do that is with the help of a real estate investment management firm. Of course, investors have many firms in the Dallas-Fort Worth area to choose from, so it’s likely you’ll have to search through a few potential matches before you find the right fit. To help with this process, we’ve compiled a list of questions and topics to discuss with investment companies when choosing one.
Communication: Will the investment product meet your goals and expectations for income, liquidity, fees, and risk? These are universal questions you should ask any real estate investment management firm you’re considering working with regardless of location and should be among the first issues you address with a prospective firm. These questions give you a chance to evaluate the company’s customer service. Is the company responsive to your interest and needs? Do you feel that you are the kind of client the company is looking for?
Complete service: What sort of investment vehicles does the company offer? Again, this can be a universal question, but especially in an active market like Dallas-Fort Worth, consider the options the firm provides. Can it help you invest in an existing property, with repositioning if necessary, new development, or carry out a 1031 exchange? Will you receive interest, dividends, and capital gains? In addition, be sure to ask about tax strategies, exit strategies, and all other technical questions that you have.
Local and national knowledge: A bull market is not a free pass for a cursory investment/due diligence process. Does the company know the Dallas-Forth Worth real estate market? It is complex and evolving, and even experts scramble to keep on top of it. An investment company with a strong background and multiple offerings in Dallas-Fort Worth will have an advantage over a smaller, less-experienced company.
Experience: Does the company have a track record? Companies that have not only prospered through multiple business cycles, but have preserved wealth during downturns have demonstrated sound investment decision making. While previous performance does not guarantee future attainments, it will shed some light on where the company may be heading. Any firm should be happy to tell you about this, and you can look at Better Business Bureau records, FINRA's BrokerCheck, and the Texas State Securities Board website, too, for insight.
In-house management: Does the company manage its own properties in Dallas-Fort Worth? This might, at first glance, seem like a purely internal issue, but when an investment firm is truly integrated—meaning it provides not only investment expertise but property management of its investment properties—it’s a strong indicator of reliability and sound fiscal practice. It shows that the investment company keeps a close eye on their holdings and takes good care of them.
Finding the Dallas Real Estate Investment Company for You
The best way to ensure a positive experience with a real estate investment company is to do thorough due diligence. This is especially true in big, crowded markets like Dallas-Fort Worth, where the number of choices can be daunting. A reputable firm should be happy to answer all of your questions, so ask freely and incisively.
CWS Capital Partners was founded in 1969. We own and manage 97 multifamily investment communities nationwide, including 18 in the Dallas-Fort Worth area, and specialize in multifamily investment management from 1031 exchanges to acquisitions, repositioning, and development. If you are seeking to invest in Dallas-Fort Worth, contact us today to arrange a meeting with an investment adviser.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.