New From Austin - In somewhat of a unique situation

New From Austin - In somewhat of a unique situation

Austin, TX · Member since 2013 · 7 posts · 1 vote

Hello All,

Very excited to be apart of this group. I live in Austin Texas and I'm in need of a lot of help and advice.

As a quick intro, I love Real Estate. It's an investment I understand, that's real, and that produces cash flow while it grows. I want to get more involved in real estate but the market seems white hot and its left me with cold feet wondering when and how to jump in.

Another bit of data that will be useful. I used to work as a home builder so I'm used to working with sub contractors. That doesn't mean I know everything because working for a home builder is more scheduling than anything else but I do know my way around a home so I want to use those skills however I can.

Here's my somewhat unique situation.
A while back I sold a company and it's left me with a lot of cash. I have the ability to buy a good number of homes in cash or at least qualify for a large amount of loans. I'm also able to buy something and not profit for a while if I'm building, remodeling, etc.. Carrying costs aren't a problem. I'm looking for income and long term growth but I'm open to building, remodeling, renting, or flipping.

So, if you were in my situation how would you proceed? Also, any insights into the Austin market would be appreciated.

Thanks,
Billy

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Hey Billy H. welcome to BiggerPockets! You are definitely going about this the right way - asking questions, learning, researching. Very smart :)

    If you haven't yet - definitely:

    1.) Check out our "Start Here" page
    2.) Check out "The Ultimate Beginner's Guide to Real Estate Investing."

    As for your particular situation, it obviously depends on your end goals. But I would consider good cash-flow, multifamily properties with good property management. You could probably put 20-30% down on a few 4-plexes, and get a nice return on investment from them with minimal work. Check out this post on a recent acquisition i made: How to Buy a Small MultiFamily Property: A Step by Step Case Study

    You are bound to get a lot of ideas, so hopefully we can help get you down the right path a little further.

    And finally -you may wanna check out "The Book on Flipping Houses" which was recently released by BiggerPockets and written by J Scott. It might shed some light on the idea of flipping houses.

  • Investor · Austin, TX · Member since 2013 · 113 posts · 30 votes
    13y

    Hi Billy H.,

    Welcome from another Austin-area investor. Buying all cash should give you an advantage and lower your costs. Are you looking to buy, fix, and rent out, primarily? If so, there are tradeoffs of tying up the cash. Would you plan to refinance homes after repairing them or hold them with 100% equity while renting them out ?

    Are you looking for help with how to find the properties that you would be buying?

    Let me know if I can be of any further help.

    Thanks,
    Dan

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    Thanks for the replies.

    @Brandon Turner Thanks! I'll read through the material.

    @Dan N. I'm fairly open as to the style of REI I pursue. Honestly as I learn the ropes I hope to be involved in all of the above. I'd like to buy and hold/rent some properties as well as possibly build or flip if that opportunity still exists. What I don't want to do is get involved with super low end stuff that will cause me to spend all my time with lousy tenants. So... sometimes multi-family is a turn off. Maybe I'll find that's not as big of an issue as I think once I get involved.

    I am looking for help finding properties. I have reached out to one broker. I'm not a big fan of sales people so it's hard for me to dive in sometimes ;)

  • Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    13y

    We should chat Billy.

  • Real Estate Professional · Austin, TX · Member since 2011 · 4 posts · 0 votes
    13y

    Billy ~

    I would be more than happy to meet with you over coffee to share with you my take on the Austin real estate market. I have been a broker for 31 years and have a wealth of experience in many real estate arenas. As Bryan Hancock on BP has reached out to you for a chat, I would grab that opportunity! He ranks as one of the brightest real estate capital fund investors in Austin.

    Marisue Mullins

  • Investor · Austin, TX · Member since 2013 · 452 posts · 309 votes
    13y

    Billy H.,

    You should meet with both Bryan Hancock and Marisue Mullins. They're both great folks and the real deal.

    Like you, I'm often a little skeptical of sales people. In a real estate market like Austin is right now, a good agent is extremely helpful.

    Lynn

  • Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
    13y

    Welcome to BP Billy,

    I suggest leveraging your money also via financing on cash flowing properties as well. Loans are just about even with the inflation rate and anyone who doesn't take advantage of that right now is crazzzy!

    I'd recommend meeting with Bryan as well. Major experience in your backyard, take him out for coffee.... or steak!

    Good luck! Keep us posted on how things work out

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    Thanks for the input all. I really need to learn the ropes some more because the cost to rent ratio is looking really out of whack so far.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    Billy, you might consider rehab/flips or new construction in Austin, and buy rentals farther out where there is better cash flow.

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    I have been looking further out and the ratios make more sense there. Building is something I enjoy but I need to figure out how to get the land. I'm assuming buying raw land, splitting it up, and building a few homes on it is the way to go.

    Flipping is appealing as well but it seems like everyone and his brother is trying to do it right now. To many TV shows making it seem to easy. Are you seeing some opportunities there?

    I know the hardest part in real estate is finding the deals and it's where I'm coming up short.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    Bryan and I are building on in-fill lots near downtown. Infrastructure is usually there. Buying wholesale is hard, but possible. If you build right you can make money even when you pay retail for the land.

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    If you're willing to share, what's your profit (% wise) on a retail lot when it's all said and done? Is that on a higher end home, average, low end, etc..? Also, are you working as the GC or are you hiring a builder?

    Thanks.

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    Sorry, in case it wasnt' clear... not profit on the lot but profit on the entire project. Thanks.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    Lot 150k
    Construction 150k
    Sell for 375k

  • Austin, TX · Member since 2013 · 7 posts · 1 vote
    13y

    Very nice, I'd love to talk sometime.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    I'm the GC. Mid range construction quality and finishes. My numbers have been better because I buy the lot wholesale and manage construction closely.

  • Wholesaler · Boston, MA · Member since 2010 · 13 posts · 1 vote
    13y

    Billy H. I wanted to thank you for making this post. I'm in a very similar situation and that's why I wanted to get involved in your thread rather than make a new one.
    I'm 25 from the Boston-area working on an internet gig (which is location independent). I have family in Austin and according to them and my research it seems like a great place to invest some of my cash.
    What I'm looking for is some consistent income with a good potential for capital growth. With that said I've been looking for multifamily rentals that I can buy and hold long term. Also I wouldn't turn down fixing distressed properties because I do have some time to invest in a RE project if the return is right.
    I have many questions such as :
    -Is it possible to own rental property in the Austin-area without living there full time?
    I'm flying to Austin, TX in 2 weeks and would love to set up a few meetings and chat about the RE Market in Austin.

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