Michael Becker has built an impressive portfolio worth over $400 million in the Dallas/Fort Worth area. He’s done this primarily based on excellent industry relationships and thoroughly knowing his market. As the head of SPI’s Dallas, Texas office, Michael oversees all aspects of property operations. Michael co-hosts the Old Capital Real Estate podcast and on this episode, he shares why it’s not too late to invest in DFW and why he’s locked in on the Fort Worth area.
Key Market Insights
Life-long resident of North Texas
Background is banking, primarily commercial real estate lending
Purchased 25 properties, 5,200 units
Focused on light value add, 15% more below market rents
Class B Apartments built in 1983-2008 is current focus
Looking to be close to employment & transportation
Key markets: Carrolton, Denton, Grapevine, Hurst, Garland
Focused more now on Fort Worth side as opportunities are running west
Independent School District – looking for first rung of suburbs than DFW
Metropolitan area in US with most consecutive rental rate growth has been Seattle, #2 is Fort Worth
DFW is #1 or #2 in building apartments (as many as NYC), concentrated in NW suburbs
Fort Worth gets 15% of supply delivered, but represents 33% of market
Lots of transportation blue collar jobs moving to Ft. Worth, while white collar jobs are going to Dallas
Have gone full cycle on 14 of the 25 properties
Cap rates in DFW 5 years ago would be a spread is now much thinner, with older deals
May see more cap expansion on the lower end of the scale
While 20 of the deals were off-market, only 2-3 did not have a broker involved
One of the biggest questions we get from investors is “Is it too late?”
Getting investors from both coasts and international
2.1 MM new jobs in Texas since 2000
1 MM people added to the DFW metro since 2010
Caution on net absorption – 5 years ago rental rate growth was 6%, but has slowed down to 3% (top of the market is dragging the market)
Avoids the east side of Fort Worth
Bullish on Northeast side of Tarrant County, Orchard Hills, Hurst, North Fort Worth - Facebook put over $1 billion data center
Right off 35 between downtown and alliance – 20 years, expect them to be fully developed and together
Bull’s Eye Tips:
Winning Your Market: Do what you say and get back to brokers
Tracking Market Changes: Constantly reading articles, talking to brokers
Daily Habit: Looking back at macro goals and return goals
Best Business Books:
ABCs of Real Estate Investing by Ken McElroy
ALN – Apartment Data
"The first deal is hard, but going from 1 to 2 is exponentially easier"
"Find the junior broker within an established brokerage group and grow and come up together"
"Be smart and strategic about where you buy and what you buy"
Places to Grab a Bite:
Connect with Michael:
Old Capital Real Estate Podcast
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