My market is better than your market

[Michael Lauther]

Many of us choose a market and focus on a relatively small area like a laser. What are the significant attributes that you have considered which makes your market a winner going forward.

How do these attributes play into your exit strategy.

Some markets may be better for buy and hold while others may be more conducive to fix and flip strategies.

Where do you invest? What is your strategy and why is your market the best for you to achieve your goals?

[Bryan Hancock]

Austin is tops on almost every list. I realize that in certain areas of town the prices already reflect this enthusiasm, but locals have an advantage because they can scout deals quicker than out-of-towners buying in to the Austin craze.

East of downtown has a lot of city money pouring into it and is being gentrified due to Austin's extremely bad traffic problem. What was once a less desirable area of town is quickly turning into a great place to invest. We have a few deals going there that should deliver 40% unlevered. With financing the project-level returns should be 3-4X that number.

I buy all sorts of ways. We buy value-add deals and sell and rentals with nice financing in good rental areas. We build new houses in a few spots. I also buy apartment complexes and have been exploring development deals recently due to the lack of fully-developed lots that meet our criteria to build.

We buy some properties for cash flow and some for appreciation. I think a healthy mix along with a healthy mix of other assets is good for one's portfolio. Our securities have delivered very nice lift recently. Over the last 8 years this has delivered us 21.5% (arithmetic mean) returns overall. I am sure others have done better. The last few years have brought our number down and I find that as our portfolio grows I have a harder time keeping the equity operating optimally without making large and risky bets.