Austin, Texas, $1 billion Apple campus, thoughts?

[Jaron Walling]

Apple announced on Thursday that it is building a new $1 billion campus in Austin, Texas. This is big news for all the Austin investors! Interested in starting a discussion about it since Amazon was looking at Austin for HQ2 but passed. I've heard the traffic and roadways are already maxed out. How will an additional 15,000 employees effect the city? 

[Danny Webber]

Caution- current rents do not support break even or cash flowing in any of these areas for the most part right now without buying your cash flow via larger down payments at closing. That goes for SFR and Multi.

I've run the numbers on both fronts and there is very little if anything on the MLS that you can make work. You would need to bet on serious appreciation in rents while carrying a loss if you buy now. If anyone disagrees please reference specific properties on the MLS with a proforma showing purchase/monthly notes vs rents. I would be happy to be proven wrong.

My opinion- it will take awhile for rents and property purchase prices to come in line for deals to make sense. All this new construction is great for housing prices but not as great for rental prices. IMO- they do not go up on and one to one basis and even if they did the N Austin is area is still very much underwater on rents vs purchase price/monthly notes. 

Also, please keep in mind that as prices rise taxes will rise too and this area has more HOA communities than not which decrease MCF as well.

Same old same old= look for off market deals, rehab/refi/rent deals or negotiate the heck out of MLS deals.

I am not a contrarian but the numbers are the numbers. Current housing affordability is not great in the area as is. Combine interest rate hikes, stock market losses (possible bear market on the way), possible recession on the horizon, and many other economic factors and you really get to a point that makes you want to pause to see what will happen next. Just about all of the leading indicators point to a slowing of the economy. (transports, housing, etc)

A good investor can make money in any market! I am still buying deals that make sense but unfortunately i do not see many of those around right now. 

My humble opinion only. (excuse grammar- written quickly)