Looking to invest in Austin TX

[Timmy Fritz]

So, I just graduated from UofL, and I knew out of college I wanted to get into real estate & house hacking was going to be the best way to do it. I just got a 4plex under contract in Louisville, KY which I was planning on house hacking. But out of the blue, just a couple days ago, I heard back from the job I wanted which was in Austin, TX and I am now moving there in June. I have spent the last several months attending local meet up groups, finding my contractor, real estate agent, property manager, and my lender. And now it seems as if I am going back to the drawing board.

I am still looking to house hack in Austin, TX and I'm looking for any recommendations for any of the above(agent, contractors, PMs, and lenders). Although I am looking at doing FHA, I am also looking for banks, HMLs, private lenders, etc. (& agents, contractor, & PMs) who work well with investors as I plan on real estate being my primary investment tool.

As far as properties in Austin, obviously prices are a bit different compared to Louisville (probably an understatement). But I am looking at staying as close to downtown as possible(no more than 5-10miles) as I'll be working on Oracle's campus just south of Lady Bird Lake and I would like to avoid too long of a commute time. I have looked into multi-families, but have also considered the idea of buying a SFR & Airbnb-ing a couple of the extra bedrooms. Any recommendations on good areas to invest, areas that do well with Airbnb, or areas to avoid in general would be great.

Also, curious on what the regulations in Austin, TX are for Airbnb. It looks like so long as it's your primary residence that you can still get licensing for Aribnb. Anyone who is currently doing this and might have any insight on the costs or time frame for getting the proper licenses or what their experience has been like with Airbnb here? Any talks of changing regulations or what the market is like for Airbnb in Austin(over saturated, competitive, etc...?) 

I know in Louisville that foreclosure auctions have become extremely competitive, is it safe to say the same for Austin, TX or are there still deals to be had at these?

I look forward to any advice/recommendations anyone might have!

[Scott Sutherland]

Welcome to Austin Timmy. Austin is a hot market but don't let that discourage you. There are some areas within 10 minutes of downtown and your office that sell for $250k SFR and $350k duplex. (78741, 78744, 78745,) I'm a big fan of the FHA duplex/Airbnb strategy. That's how my wife and I got started in 2011. We still own that duplex (and a few more) today.

The Airbnb returns are still solid in Austin. Occupancy is high year round. There's always something happening in Austin that drives folks to visit.  Regarding regulations......the city is still planning to eliminate all Type 2 (investor) licenses in 2022 which will drive some folks out of the market and cause others to go underground. Currently 70% of the Airbnb's operating in Austin are unlicensed since the city is no longer offering Type 2 licenses. 

However, I'm not aware of any plans to eliminate the Type 1 (owner occupied) licenses so that should be an advantage for those owners if/when the remaining Type 2 licenses are eliminated.  Personally, we plan to shift our properties more to 30+ day rental which does not require a license. 

I'm a residential broker focused on investors and could refer you to some lenders and contractors as well.