250K Investment in to-be hot pocket in North Austin

[Navdeep Raj]

I'm in contract for a 3B-2B house in 78729. Its built 1985, 1150sqft (1550sqft including a converted garage to a large 2nd living area) and is a corner lot. So far my research says Austin is not a good place for investment properties given the CAP rate is between 2-3% max (Am I wrong?)

I’m putting in 20% down on the 255k property, it might need 5-10k fixes and overall closing will be close to 60k with a 205k loan.

Monthly expenses will be ~$1k (repairs, management, vacancy, tax, insurance, etc.) and rent ~$1.5k putting me in a negative cashflow!! Yeah, I know its not a good investment property!! Right?

I’m betting on the speculation that in 5-8 years property values will have doubled. Why?

Community center with pool, tennis, etc - 1min walk

School district: 5-6-7

Driving distances:

Costco - 14min

Walmart - 10min

Lakeline shopping mall - 11min

And to the Tech side of things (big part of my speculation)

Apple/Oracle/Accenture/TriNet - 7min

Electronic Arts - 5min

Amazon - 12min

IBM - 12min

Dell - 14min

Visa - 7min

Flex - 6min

Cisco - 6min

Nvidia - 9min

National Instruments - 11min

Samsung - 20min (insanely huge factory)

Everyone above are huge huge employers with 100s-1000s of jobs and constantly hiring & expanding.

Amazon is expanding to 800 new employees in “The Domain” new offices by 2020.

Google expansion downtown Austin - 5000 new people, 800k sqft by 2022

And to the best one! Apple!! Their approved upcoming campus going to be complete by end of 2021 will employ 5000 employees and scales to 15000 people.

This is a 1 BILLION DOLLAR investment by Apple and is 0.9mi, 2min drive, 5min bike or 20min walk from this place.

I’m in contract and have 3 more days to back out. I’d love to hear for all you investors if this is a good move for the long term :)