This week we checked out a submarket in DFW—Old East Dallas. It is right across from Uptown and Downtown Dallas across 75. Old East Dallas is an interesting submarket because it is so fragmented. There are a lot of smaller 10, 20, 30-unit deals throughout the submarket.
Some deals are renovated, some need a lot of work. There is also new development scattered throughout the submarket.
Gentrification
As the price for housing in Uptown and Knox Henderson increases, people start looking for a cheaper place to live. They go across 75 into Old East Dallas and find some more affordable housing in that area. It is still close to all the action in Dallas that draws people to the city.
Some of the older buildings are being bought up and torn down to rebuild brand new Class A product. We drove several new developments. It is starting to gentrify in the area.
Jimmy’s Food Store
We stopped in what looked like a happening food store in the submarket. Jimmy’s Food Store had a 30 to 40 minute wait so we had to pass. The store was nice and the food looked authentic.
Portfolio
We checked out several buildings in the submarket that were part of a portfolio for sale. The portfolio was comprised of multiple deals sized 10-40 units in varying conditions. One thing we did notice was a lot of window units were on the properties so some A/C upgrades may be in order.
Typically, on the older deals in Old East Dallas you need about $20,000 to $30,000 a door to bring the building up to an attractive rental rate. This means you need to buy the property at a lower basis per door in order to be successful.
Read More: Choose a Multifamily Lender that Can Close.
Kalachandji’s
The best vegan Indian buffet in Old East Dallas was at Kalachandji’s. For 37 years this place has been serving vegetarian dishes and it was nothing short of amazing. The Multifamily Food Network was all over this one!
Aerial Footage
The new drone can easily take off and land from practically anywhere. It is good to get an aerial of the surrounding city or to do a flyby of the apartments we are looking at.
You can get FAA approval through an app and the software also has some built in safety features.
Conclusion
Old East Dallas is an interesting submarket of DFW and one that is continually growing. There are a lot of owners in the submarket so there are plenty of deals to be had. I think someone that does their homework and is good at implementing value-add strategies could be very successful in that submarket.
