Austin, TX Investment Property

[Jeremiah Vancans]

What are everyone's thoughts on Austin Texas? I'm considering buying in Austin for my first investment property. I'm curious what areas are best to consider with a budget up to $400k. Open to fixers, SFR or Multi-family. Cash flow is nice but the appreciation play is more important to me.

[David Wright]

@Jeremiah Vancans...for what it is worth, Austin TX has been a goldmine for many investors.....and with your capital you would do great I believe.  Lots of competition, but that is in anything that is very good.  I wish you the best.

[Abby Argo]

@Jeremiah Vancans ... With $400K, you can buy in many appreciating areas. I would focus on East Austin (78721/78723), South Austin (78704/78745), and specific parts of North/Central Austin (Brentwood/Allandale/Crestview, 78756/78757/78758). All of those areas have tons of new builds, full remodels, and the ARVs are constantly increasing at a rapid rate.

[Jordan Moorhead]

@Jeremiah Vancans is stick to multi family and focus on areas that are gentrifying as some have pointed out. East Austin worked well for me

[Mike Castellow]

@Jeremiah Vancans I live about halfway between Austin and San Antonio and Austin is a tough market to cash flow, but the appreciation can be as high as almost anywhere in the country. I would suggest finding a property that you can add value to by increasing square footage with the addition of an ADU or in a neighborhood that can support adding square footage to the main house. Is $400k what you want to invest or are you thinking that is a reasonable number based on the amount you can leverage?

[Jeremiah Vancans]

@Mike Castellow thanks for the advice.   $400k is max I want to invest.   Would like to keep it under $300k and willing to do a value add.  What are your thoughts on Round Rock and Plugerville.  Also where in Texas is best cash flowing areas?

[Mike Castellow]

@Jeremiah Vancans I don’t personally invest in Round Rock or Pflugerville, but I know numerous investors who do and that they are at a much lower price point than Austin with ample opportunities for cash flow. I would recommend San Antonio for cash flow and Austin for higher end properties. There are also a lot of opportunities between Austin and San Antonio due to the growth along the I-35 corridor.

[Danny Webber]

@Jeremiah Vancans 400k will buy you something but cash flow is an issuein Austin. With those funds i would look at Killeen/Kempner/Copperas for cash flow immediately. You could also buy up to 8 units with those funds. This makes more sense to me than negative cash flow with an appreciation play when considering rental property costs outside of linear note/rent math.

[Jeremy VanDelinder]

I live in and invest in Williamson County. As @Danny Webber alluded to, it is hard to find deals good enough to cash flow, but they come along from time to time. (I put one under contract in Jarrell this morning that will cash flow.) I've closely considered the Killeen area, and concluded that--although cash flow is great--its not for me as I personally don't want to be in a flat/non-existent appreciation market. 

[Jeremy VanDelinder]

@Jeremiah Vancans let me know if there is any way I can help.

[Vincent Chen]

@Mike Castellow How is the flipping market for Austin and SA? Which one is better for flipper?

[Mike Castellow]

@Vincent Chen It depends on what you are looking for. If you're looking for lower end properties with cosmetic updates, San Antonio is probably the only place you will find those. There are some neighborhoods in San Antonio where you will find ARV's above $400k, but they are more of the exception and not the rule. While in Austin, that is closer to the median price of home sales. I personally prefer run down homes in the older well established and typically more expensive neighborhoods.

[Vincent Chen]

@Mike Castellow Thanks for your reply and I would like to know what is the sweet spot for flips in SA TX? For ARV 400k, I assume it is high end house with big rehab projects, so would like to know what is the best niche for flippers?

[Mike Castellow]

@Vincent Chen The best niche in real estate is based on your level of risk tolerance, access to funding, and personal investment style. There are so many different factors that it I couldn’t even begin to guess what might work well for you.