Market · 2026
The case for Dallas residential in a high-rate world
When borrowing costs rise, the instinct across the housing market is to wait. For a buyer with capital and patience, we believe that instinct is precisely backwards.
High rates do more than raise the cost of a mortgage. They thin the pool of competing buyers, stretch the time a listing sits on the market, and steadily convert ordinary sellers into motivated ones. The pressure is sharpest where an owner is carrying an asset they no longer want — a builder holding unsold inventory, an owner who has already relocated — and is absorbing taxes, insurance, and financing every month it doesn't sell.
Sound assets, temporarily mispriced
Dallas–Fort Worth in 2026 shows the pattern clearly. Active inventory sits at multi-year highs, price reductions are widespread, and values have come off their peak — even as the fundamentals that drive long-term demand remain intact: corporate relocation, population growth, and one of the most diversified economies in the country. The softness is cyclical and rate-driven, not a deterioration of the underlying real estate.
That gap — sound assets, temporarily mispriced because capital has become scarce — is where durable equity is created. We buy the asset at today's discount and treat the financing rate as a separate variable to address later.
Underwriting for a market that may not cooperate
We do not assume rates fall on a convenient schedule. Every acquisition is financed so that rent covers full debt service from day one, which means we are never forced to sell or refinance on anyone's clock. If rates ease, the position improves; if they stay elevated, the property continues to carry itself while tenants retire principal.
The discount is available now precisely because most buyers have stepped back. Scarcity of competition is the opportunity — and it tends not to last once the cost of capital normalizes.
This perspective is provided for informational purposes only and reflects the views of CCH Capital as of 2026. It is not investment, legal, or tax advice and is not an offer to sell any security. Market conditions referenced are subject to change.
Strategy
How DSCR financing changes the hold equation
Most leveraged real estate has an uneasy relationship with time. Every additional month carries vacancy risk, carrying costs, and the looming question of refinancing. Debt-service-coverage (DSCR) financing, underwritten conservatively, turns that relationship on its head.
The property stands on its own
A DSCR loan qualifies on the rental cash flow of the property itself, not on the sponsor's personal income. We underwrite every acquisition so that rent covers the full obligation — principal, interest, taxes, insurance, and any association dues — at a coverage ratio of at least 1.0. From the first month, each property services its own debt.
Two things follow. First, we are never forced to sell: a property that pays for itself can be held through a downturn rather than liquidated into one. Second, because the loan amortizes, every payment retires principal — so the tenant, in effect, buys the asset for us over time. That equity accrues regardless of what the market does.
Three engines, one direction
Layer modest appreciation on top of below-market entry and tenant-funded paydown, and equity compounds from three independent sources. Time stops being the enemy and becomes the mechanism: the longer we hold a well-bought, self-amortizing asset, the more of it we own. A later refinance to a lower rate improves the picture further — cutting the payment, turning a break-even property cash-flow positive, and freeing equity to redeploy.
What it does not do
Coverage at 1.0 means the property pays its debt, not that it throws off guaranteed surplus. Vacancies, repairs, and rising taxes or insurance can pressure any individual asset, which is why underwriting discipline and reserves matter more than optimism. The structure removes forced-seller risk; it does not remove real estate risk. But that single change — financing each home so it can wait — is what makes a genuinely long-term hold possible.
This perspective is provided for informational purposes only and reflects the views of CCH Capital as of 2026. It is not investment, legal, or tax advice and is not an offer to sell any security.
Capital Markets
Rate arbitrage: positioning for the next cycle
Our strategy compresses to four words: marry the house, date the rate. The phrase is glib, but the logic underneath it is the core of how we think about the current cycle.
Two variables moving in opposite directions
In the short run, interest rates and home prices tend to move inversely. When rates rise, affordability falls, buyers retreat, and prices soften. That means buying at high rates is, by definition, buying at a comparatively low price. The two halves of the transaction are not symmetric, though — and that asymmetry is the whole opportunity.
The price you pay is permanent: lock in a discount today and it is captured for the life of the hold. The rate you pay is temporary: it can be refinanced when the market turns. So we accept expensive financing in exchange for a cheap asset, knowing only one of those two is fixed.
Closing the arbitrage
As rates ease, we refinance. The payment drops, which strengthens coverage and can turn a break-even property cash-flow positive. And because we also bought below market and tenants have paid down principal, the refinance is done against a higher value and a lower balance — freeing equity to recycle into the next discounted acquisition. Each turn of the cycle compounds the last.
Not a bet on timing
We are deliberate about what this is not. We do not depend on rates falling on any particular schedule; the timing and magnitude of any decline are genuinely uncertain. Each property is underwritten to carry itself at today's rate, so a refinance is upside rather than a requirement. It is also worth being honest that refinancing resets the loan's amortization term, so the cash-flow benefit is more reliable than dramatic acceleration of paydown.
Positioning happens before the cycle turns, not after. The discounts that reward patient capital are widest precisely when conviction is hardest — which is the point.
This perspective is provided for informational purposes only and reflects the views of CCH Capital as of 2026. It is not investment, legal, or tax advice and is not an offer to sell any security.