LF investors or investor friendly agent in Austin, TX!

[Li Yin]

Hi BP community,

I am from Cali and I've been looking at Austin as an investment area. I am looking to connect with local investors and investor friendly agents who are also investors themselves or just anyone that knows the area well who wouldn't mind sharing some thoughts.

Some starter questions:

1, what are your thoughts investing in Austin vs. other areas in Texas such as San Antonio, Houston, Dallas-Fortworth, etc. 

2, what are the up and coming, young professional, neighborhoods in Austin? i.e. areas where the space hasn't completely been taken up like Manhattan and there is room to grow and active developments? what are neighborhoods to absolutely avoid?

3. what is your thought on condos, SFR or duplex/triplex or small multi-family apartment buildings? I am from NY/SF so all I know are apartments and condos, but I am curious if houses are more the way to go.

4. the numbers, can I get cap rate in 12-15% in Austin without leverage? 

5. what about cities like Round Rock, Cedar Park that is right north of Austin? my initial numbers based on median values and rents suggest these cities may be interesting.

6. anyone you think I should talk to, please PM me!

Thanks all!

[Dan Burstain]

Hi Li,

Happy to help any fellow BP investor figure out the great investing opportunities in Austin.

Here are my brief answers to your questions and for more detail don't hesitate to call me at 512-588-3260.  

1, what are your thoughts investing in Austin vs. other areas in Texas such as San Antonio, Houston, Dallas-Fortworth, etc. ------- I think it depends on what you are looking for. If you are a stickler for being at or above the 1% rule or looking for homes for $50,000 then San Antonio is better for you than Austin. If you are looking to maximize your ROI then I believe Austin is where people need to be investing. You will find overall better appreciation in Austin vs. Dallas and San Antonio. I am sure there are pockets in both those cities where there is great appreciation but overall I really like Austin over those other two simply because I see 30,000 jobs coming here every year and not projected to stop. Apple's second headquarters is here with 10,000 employees. Samsung, Dell, a huge medical research facility hasn't even opened yet that will bring a ton of high paying jobs. Austin is also rated tops in just about everything as it relates to enjoying life. I mean we are a top place for Vegans while being rated the best BBQ city in the country.

2, what are the up and coming, young professional, neighborhoods in Austin? i.e. areas where the space hasn't completely been taken up like Manhattan and there is room to grow and active developments? what are neighborhoods to absolutely avoid?------ Again, hard to give a quick answer to this as there are a few variables.  In short, Southeast Austin is popular among the young professionals while those with kids head to Northwest Austin along with areas like Cedar Park/Leander.  Downtown condos continue to thrive but I don't believe are wise investments.  As for areas to avoid, even the higher crime areas present some investment opportunities for the right investor.  So it really depends on what you are looking for again.  

3. what is your thought on condos, SFR or duplex/triplex or small multi-family apartment buildings? I am from NY/SF so all I know are apartments and condos, but I am curious if houses are more the way to go. ----- I love SFR's then duplexes and small multi-family buildings and last condos. That being said, there are a few condos that do make sense but as a blanket statement I feel they are the riskier investment of the group.

4. the numbers, can I get cap rate in 12-15% in Austin without leverage? --------- In certain investments that might be possible (like a mobile home park or other less common investments) but not with a SFR unless you get an amazing deal on a REO or rehab. But like I stated earlier, if you only are looking at cash flow and/or cap rates and not taking into consideration appreciation or overall ROI then there are better places to invest than Austin. I personally like to maximize my return on investment and Austin is the place to do that.

5. what about cities like Round Rock, Cedar Park that is right north of Austin? my initial numbers based on median values and rents suggest these cities may be interesting.  ------Cedar Park is a great place for investors as it relates to median values and rents as is Round Rock, and Leander.  Great schools, still growing, and close to much of the job growth.

Again, happy to go into all this in more detail or answer other questions you might have or just send you investment opportunities, just email or call me at your leisure.