New & Discouraged - Austin, Texas

[Robert Hidrogo]

Hello BP family, I reached out to a local realtor, a friend of a co-worker, to see if he could help me find some properties to flip. Although I greatly appreciate his honesty, his response below has really discouraged me with being new REI. Can anyone tell me how I could go about breaking into the market in my area?

Hey Bobby

You are on the right track with investing in Austin Real Estate. However, the market you are interested in with foreclosures and distressed properties is tough to break into.

There are not a lot of foreclosures in Austin because the market is rather hot and sellers can sell their homes and make a profit or break even rather than let their home go into foreclosure and destroy their credit for many years.

There are so many buyers and investors looking for distressed properties and you have to be willing to make an almost immediate decision. Unfortunately, there is no time to think about such an investment.

If you find a a foreclosure property and especially a distressed property you are almost guaranteed there will be multiple offers and the offers will be above full price. You are also guaranteed to be up against cash offers.

I just sold a home east of IH35 and north of 51st Street. This home needed work and was a great flip. I had 8 offers, 3 cash offers and the highest offer was $35,000 over the asking price. Needless to say the seller accepted a cash offer from a flipper that was well over full price but was not the highest offer. Seller felt more comfortable with a cash flipper.

All this to say the Austin Real Estate market is really crazy and hot with 130 people moving in daily they have to live somewhere. I do not focus on foreclosures or distressed properties so I am probable not a good fit for what you are looking for.

I so appreciate the opportunity. All the best on your real estate ventures!!

Any help would be greatly appreciated.

[Jay Hinrichs]

@Robert Hidrogo

Forget about flipping if your not cashed up and ready to roll your wasting your very precious time.

let me offer some other thoughts for you to contemplate

 get a Real Estate license  work on a Big team they will help you get started Make MONEY why you learn the industry.  A great realtor will make more money in a year than most people that try to flip and succeed in flipping one maybe two houses in a year. Plus its not a career builder.

Once you have some real life education  and by being in the RE business you will start to meet those wealthy no time on the hands professionals that would love a smart agent to help them invest.. you now are working from a power position.

@Gunnar Teltow

  in the day in PDX I was one of the top 3 foreclosure steps buyers... and the picture you post above was how crazy it was at the court house.. when I started buying foreclosures in the late 70s and early 80's I was generally the only one there.. never had to bid against anyone.

Fast forward to the internet and how to fix and flip guru's  and even a Bp Educating folks on how to do our industry that had no experience.. led to what you have today.. mass's thinking this is a get rich business quickly with no money no credit etc.

Anyway I am bidding on this little rancher... starting bid was 80k ARV 200k this brought out every buddy and their brother.. 34 people qualified funds to bid... so right there that was at least 3.4 million in cash chasing one deal.. it bid up to a point that the winning bidder would be lucky to make 10k.. and if there was issues could loose 10k

I want back to my office and told my staff.... WE are out of the auction business we are going to take this 10 million in cash and credit we have and we are going to Loan it to all those people let them do all the work... within 5 years I had that rolled up to almost 50 million ... and we made more money than any flipper or court house step buyers by far. And with a lot less stress and work on our part.. when you have the money people find you!!

So this is where I see the industry again today... too much money chasing too few deals. Not the best way to make a buck by a long shot.. Many top realtors in our market are making 250 to over 1 million a year in commission with no risk  just hard work and putting time into their business that will be here for their entire career.. flippers come and go like the wind of West Texas