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Updated over 4 years ago, 04/30/2020
New Buyer to Austin
So, good evening.
I am an new investor looking to buy in Austin (very excited). I have a number of questions that I am sure the locals can answer for me (my budget is $300k:
-I hear so many people recommending to purchase duplex, is this the be and end all? Why so much empahsie on duplex? What is second best recommendation?
-I see the following areas mentioned most often; Cedar Park, Round Rock, Leander and Pflugerville. Is that an accurate statement? Are these not too far from DT? What options suit my budget?
-As I am looking for decent cash flow, its going to cost me +- $1,800/mth all in if I get a 3/2 in one of them locations (accurate?) . What kind of rent (average) should I be expecting in these areas?
-Reading some post here it is recommended not to try to rent between August and March. Accurate?
Thanks very much and I appreciate any help at all!!!!
With all do respect, your net is too big and your bait is too small. There's only 3 sub $300k duplexes in the Williamson, Travis, and Hays counties right now. They don't generate the cash flow you're looking for.
Every town you mentioned is an unpleasant commute from Downtown. Easily 45 minutes in rush hour.
The option that suits your budget depends on how much you have for the down payment. The bigger your down payment the more you'll cash flow. What's your down payment?
@Account Closed, hi. In order to give you better advice, it would be nice to know a little bit more about you. What is your goal or purpose to invest in Austin real estate? Are you primarily interested in cash flow or appreciation? It is obvious that you don't live in Austin, but are you out of state? What is your experience with investment real estate?
If we use 300k as your price point. You put 20% down (realize some lenders are now requiring 25% down), then you are going to mortgage 240k. 30 yr mortgage @ 4.25% (investor rate maybe?), property tax at 2.5%, Insurance $1500, NO HOA and your payment would be $1930 monthly. If this is a SFH your rent might be $2000.00 monthly, a duplex $1200/per side ($2400 total). Add in 5% vacancy, 5% maintenance, 5% Cap ex and 10% property management and you total cost each month on $2000 income is additional $500 and duplex income $2400 would be $600. So now we are mortgage payment of $1930 plus either $500 ($2430 SFH) or $600 ($2530 duplex). SFH Income - Expenses looks like this $2000 - 2430 = -$430 each month. Duplex looks like this $2400-$2530 = -$130
Which negative do you like better? I assume no house hacking as I have no indication you will be moving to the area. If you're from California you're probably ok with negative cash flow and hope that appreciation and or rent growth will make this a good investment. I am from Texas so I would not invest in this negative cash flow deal.
If I could house hack the duplex then it would be a consideration for a possible investment. Roughly 5 years earlier, you could find 1% deals in Austin area but very difficult to do today. If your renting units for $1200 monthly in the Austin area then it matters not the time of year to look for renters. If your renting a duplex, you have little concern for school districts or even location for that matter as rental demand is high. SFH may have an HOA associated with your property making your negative cash flow even greater.
How do you go about tightening up these numbers. Do your own property management, get to know local repairmen that won't charge you an are and a leg, have the resources to fix up your properties to help eliminate vacancies.
I have a total of 19 duplex units and 10 of them are in the Austin MSA which includes those suburbs you mentioned in your post. Out of those 10 units, my empty units for the last five years averages one week empty per unit per five years. Yes, for the last 5 years, I may have had one week empty per unit on a 5yr basis (not annual). I say this to show you the high demand. If I am given a 30 day notice from my tenants, I will have a new tenant moving in the day after the old tenant is moving out most of the time. If I have a tenant up and move with no notice, then I will have a new tenant occupying in two weeks. I do my own property management and I am hands on. My tenants stay an average of 5 years per unit. In good conscience, I can't keep up with rent growth. I generally leave my rents stable for two years on my existing tenants and then slowly raise from there. Generally, when a tenant moves out, it means a $100 or more rent increase for me per unit to get back to somewhere close to market rent.
Yes all I own is duplexes in the Austin area. I bought my properties when 1% was very easy to obtain. I will say that if you can minimize expenses, and with housing projections in Austin, then even a small negative cash flow could be positive in a few years. I like duplexes because the units are small; easy to maintain. It is extremely easy to find two $1200 renters (duplex) vs one $2000 renter (SFH).
The further you get away from Austin, the betters the numbers become. So good that it is possible to get 400-600 positive cashflow per duplex. Good luck, Cheers.
It’s always far better to buy as many doors as you can with that money. But it won’t happen in Austin with what you have. And I wouldn’t “invest” in negative clash flow ever!
Does it have to be Austin?
It really all depends on what you want out of your real estate investment. I have many investors who just don't want to deal with anything and really want a turnkey solution so I get them a brand new home in Pflugerville or Leander where they can break even, have little to no capex needs for the first 10 years, etc. All the suburbs you listed have strong demand. Price your rental correctly and it will rent quickly. I also have homes that already have long term tenants in place. The reason people talk about duplexes or any multi-family all the way up to 20 plex and greater is that the more doors the more cash flow generally. You also aren't hurting as much when the tenant leaves as the other side is still paying. I think you are making a great move personally and 83 out of 100 economists, according to Zillow, agree with you. The Austin area is the top city to invest in for ROI and now is a great time to buy with a lot of people on the sidelines. So just decide how much cash flow you want and that will actually decide what area of town you end up in but just realize the more cash flow the less potential appreciation. I know many on this site consider appreciation icing on the cake but our economy here is set up differently and is built for any kind of recession with a large government job base so we have seen 40 years of continuous appreciation. Not so much icing on the cake as the actual cake.
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Originally posted by @Beau Fannon:
With all do respect, your net is too big and your bait is too small. There's only 3 sub $300k duplexes in the Williamson, Travis, and Hays counties right now. They don't generate the cash flow you're looking for.
Every town you mentioned is an unpleasant commute from Downtown. Easily 45 minutes in rush hour.
The option that suits your budget depends on how much you have for the down payment. The bigger your down payment the more you'll cash flow. What's your down payment?
Do not show any respect, stick it to me when I am talking nonsense, that is what I am here to learn the best strategy from guys who know a ton more than me.
I have +- $30,0000 currently, looking to buy in a couple of months. I have a salary income of $2,000 a week so the down-payment can grow towards $40,000 if that is a wiser option to get somewhere more expensive, is that what you are saying?
@Account Closed it sounds to me like you should really take a lot of time to read and listen to a lot of the podcasts that you can find here. Become knowledgeable with the many ways of approaching investing in real estate so you can figure out what is the best way for your situation and what you prefer to handle. You’re going to get so many different advices but all will agree that it doesn’t matter the amount you will spend, but what matters is that the numbers do make sense and you’re cash flowing...not losing. Also, be prepared to make mistakes. Some of those mistakes can be costly and you need to be fully aware of that and learn how much risk you can handle. For example, my very first one I went in with one question in mind: can I afford to lose here? I knew that if I made mistakes I would be ok. And guess what? I did make mistakes that cost me!!!! But it all worked out and I learned so much. Keep asking away. Take your time to learn as much as you can. Don’t rush it.
Originally posted by @Joe Scaparra:
@Account Closed, hi. In order to give you better advice, it would be nice to know a little bit more about you. What is your goal or purpose to invest in Austin real estate? Are you primarily interested in cash flow or appreciation? It is obvious that you don't live in Austin, but are you out of state? What is your experience with investment real estate?
If we use 300k as your price point. You put 20% down (realize some lenders are now requiring 25% down), then you are going to mortgage 240k. 30 yr mortgage @ 4.25% (investor rate maybe?), property tax at 2.5%, Insurance $1500, NO HOA and your payment would be $1930 monthly. If this is a SFH your rent might be $2000.00 monthly, a duplex $1200/per side ($2400 total). Add in 5% vacancy, 5% maintenance, 5% Cap ex and 10% property management and you total cost each month on $2000 income is additional $500 and duplex income $2400 would be $600. So now we are mortgage payment of $1930 plus either $500 ($2430 SFH) or $600 ($2530 duplex). SFH Income - Expenses looks like this $2000 - 2430 = -$430 each month. Duplex looks like this $2400-$2530 = -$130
Which negative do you like better? I assume no house hacking as I have no indication you will be moving to the area. If you're from California you're probably ok with negative cash flow and hope that appreciation and or rent growth will make this a good investment. I am from Texas so I would not invest in this negative cash flow deal.
If I could house hack the duplex then it would be a consideration for a possible investment. Roughly 5 years earlier, you could find 1% deals in Austin area but very difficult to do today. If your renting units for $1200 monthly in the Austin area then it matters not the time of year to look for renters. If your renting a duplex, you have little concern for school districts or even location for that matter as rental demand is high. SFH may have an HOA associated with your property making your negative cash flow even greater.
How do you go about tightening up these numbers. Do your own property management, get to know local repairmen that won't charge you an are and a leg, have the resources to fix up your properties to help eliminate vacancies.
I have a total of 19 duplex units and 10 of them are in the Austin MSA which includes those suburbs you mentioned in your post. Out of those 10 units, my empty units for the last five years averages one week empty per unit per five years. Yes, for the last 5 years, I may have had one week empty per unit on a 5yr basis (not annual). I say this to show you the high demand. If I am given a 30 day notice from my tenants, I will have a new tenant moving in the day after the old tenant is moving out most of the time. If I have a tenant up and move with no notice, then I will have a new tenant occupying in two weeks. I do my own property management and I am hands on. My tenants stay an average of 5 years per unit. In good conscience, I can't keep up with rent growth. I generally leave my rents stable for two years on my existing tenants and then slowly raise from there. Generally, when a tenant moves out, it means a $100 or more rent increase for me per unit to get back to somewhere close to market rent.
Yes all I own is duplexes in the Austin area. I bought my properties when 1% was very easy to obtain. I will say that if you can minimize expenses, and with housing projections in Austin, then even a small negative cash flow could be positive in a few years. I like duplexes because the units are small; easy to maintain. It is extremely easy to find two $1200 renters (duplex) vs one $2000 renter (SFH).
The further you get away from Austin, the betters the numbers become. So good that it is possible to get 400-600 positive cashflow per duplex. Good luck, Cheers.
Joe, appreciate that reply. I have never got as much constructive replies on a forum prior to now.
Your numbers are spot on here, my own calculator has shown I will be paying $2,000 per month all in. In all honesty, I do not want to invest if it is negative cash flow, so I need to come up with a revised approach if $300,000 with 10% down (I have been pre approved) is not going to work in Austin with the above numbers.
What would your suggestion be with the numbers I have available to me?
I spoke with a real estate on the phone about all of this, she told me, with $300k, she can make it work that I will be cash flowing between $300 and $800 a month. Now, she didn't give me details about location, type of home etc. etc. but she was aware of all my numbers. Is this unrealistic, just to get me on board with her?
Also, yes I am coming from CA. My primary is still going to be CA,. I have been to Austin numerous times, however obviously I only vaguely know locations as an outsider.
Originally posted by @Nina Hayden:
It’s always far better to buy as many doors as you can with that money. But it won’t happen in Austin with what you have. And I wouldn’t “invest” in negative clash flow ever!
Does it have to be Austin?
Negative Cash Flow is not something I am interested in.
It doesn't have to be Austin, but I want it to be Austin. I may have aspirations to end up moving here in a number of years. (Not necessarily into the property I am looking to buy right now though).
What is your view on my numbers? Can it work? What do I need to change?
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Originally posted by @Account Closed:
So, good evening.
I am an new investor looking to buy in Austin (very excited). I have a number of questions that I am sure the locals can answer for me (my budget is $300k:
-I hear so many people recommending to purchase duplex, is this the be and end all? Why so much empahsie on duplex? What is second best recommendation?
-I see the following areas mentioned most often; Cedar Park, Round Rock, Leander and Pflugerville. Is that an accurate statement? Are these not too far from DT? What options suit my budget?
-As I am looking for decent cash flow, its going to cost me +- $1,800/mth all in if I get a 3/2 in one of them locations (accurate?) . What kind of rent (average) should I be expecting in these areas?
-Reading some post here it is recommended not to try to rent between August and March. Accurate?
Thanks very much and I appreciate any help at all!!!!
Welcome aboard Chris.
@Account Closed, the real estate agent you contacted quoted you this? "I spoke with a real estate on the phone about all of this, she told me, with $300k, she can make it work that I will be cash flowing between $300 and $800 a month. Now, she didn't give me details about location, type of home etc. etc. but she was aware of all my numbers. Is this unrealistic, just to get me on board with her?" Also, "so I need to come up with a revised approach if $300,000 with 10% down (I have been pre approved) is not going to work in Austin with the above numbers.".
Ok, I think there is either some miscommunication going on or your getting bad advice.
1. If you are investing in Investment Real Estate (meaning you are not owner occupied) you will be required to put down a minimum of 20% and a lot of lenders are requiring 25%. If you are buying a home that you will live in then yes there are loans that you can get that only require 3-10% down, If you had military service and qualify for a VA loan you can get 0% down. BUT ONLY IF YOU ARE OWNER OCCUPANT.
2. If you have an agent that can get you 300-800 positive cash flow on a 300k property with 20% down in Austin, then ask her to show you a real live example and to show you the numbers. It is not that hard to either prove her right or wrong. I would be very skeptical that she could produce those numbers but I don't want to call her a liar. So just say to her to show you a property on the market today in Austin that could work. Now I do think you can find something similar just not in the Austin area.
My brother just closed a duplex in Elgin, TX, about 30-40 mins to Austin. He bought it for 174k and it brings in 1850 in rents and I believe those rents could be renewed to about 2000 next year. He does his own property management and he is clearing $400 positive each month now. However, if you're not experienced, not from the local area, and not ready to pounce then to close a deal like this is going to be hard.
Again, I don't know much about your experience but if you are serious about moving to Austin and you don't have any kids over the age of 5, this is my recommendation: Save your money until you move out here. Look for a duplex, buy it, move in one side, rent the other side. If you're single and really motivated, rent out one of your rooms on your side and now you're cooking with fire. Do it for two years, if you like the setup, go find another duplex and move into it and repeat. If you need your privacy, buy another duplex and don't rent out your extra room. If after two years, you want a small SFH to live in, then move out of your duplex, hopefully rents continue up and now you are breaking even or making a little positive when you move into your next property. But don't sell the duplex!
Properties in and around Austin, have gotten so expensive that most people are going to have to find ways to cut expenses. I tell all who I mentor, to plan on being your own landlord. That will save you money and give you a lot of experience. Once you begin to acquire more properties, more experience and more confidence, then you're ready to decide if a property manager makes sense or not.
Lastly, when you are told stuff be it from a real estate agent, a friend, mortgage lender, or anyone, if it doesn't sound right ask more questions and have it explained to you so that you can understand. 2008 changed the way investment properties are bought. Before then, you could buy property with 5-10% down, not anymore, unless you are owner occupant. Good luck.
@Christopher Moloney listen to @Nina Hayden and continue to educate yourself.
At the same time, start working with a local lender to get pre-qualified. Austin has many excellent providers and I'd be happy to introduce you a couple to them. They'll be able to give you a far more realistic view of what you can afford and what this will cost you. Pre-qualification helps to eliminate the speculation and narrow your focus. This is the next step.
Originally posted by @Beau Fannon:
@Christopher Moloney listen to @Nina Hayden and continue to educate yourself.
At the same time, start working with a local lender to get pre-qualified. Austin has many excellent providers and I'd be happy to introduce you a couple to them. They'll be able to give you a far more realistic view of what you can afford and what this will cost you. Pre-qualification helps to eliminate the speculation and narrow your focus. This is the next step.
I have already been pre-approved by a local lender in Austin...
The one thing I believe where the confusion is, I have been told I can use the home as a ''second home'' not an investment property. Therefore I do not need 20% down.I have been approved with 10% down already....should I ask more questions about how this?
Originally posted by @Joe Scaparra:
@Account Closed, the real estate agent you contacted quoted you this? "I spoke with a real estate on the phone about all of this, she told me, with $300k, she can make it work that I will be cash flowing between $300 and $800 a month. Now, she didn't give me details about location, type of home etc. etc. but she was aware of all my numbers. Is this unrealistic, just to get me on board with her?" Also, "so I need to come up with a revised approach if $300,000 with 10% down (I have been pre approved) is not going to work in Austin with the above numbers.".
Ok, I think there is either some miscommunication going on or your getting bad advice.
1. If you are investing in Investment Real Estate (meaning you are not owner occupied) you will be required to put down a minimum of 20% and a lot of lenders are requiring 25%. If you are buying a home that you will live in then yes there are loans that you can get that only require 3-10% down, If you had military service and qualify for a VA loan you can get 0% down. BUT ONLY IF YOU ARE OWNER OCCUPANT.
2. If you have an agent that can get you 300-800 positive cash flow on a 300k property with 20% down in Austin, then ask her to show you a real live example and to show you the numbers. It is not that hard to either prove her right or wrong. I would be very skeptical that she could produce those numbers but I don't want to call her a liar. So just say to her to show you a property on the market today in Austin that could work. Now I do think you can find something similar just not in the Austin area.
My brother just closed a duplex in Elgin, TX, about 30-40 mins to Austin. He bought it for 174k and it brings in 1850 in rents and I believe those rents could be renewed to about 2000 next year. He does his own property management and he is clearing $400 positive each month now. However, if you're not experienced, not from the local area, and not ready to pounce then to close a deal like this is going to be hard.
Again, I don't know much about your experience but if you are serious about moving to Austin and you don't have any kids over the age of 5, this is my recommendation: Save your money until you move out here. Look for a duplex, buy it, move in one side, rent the other side. If you're single and really motivated, rent out one of your rooms on your side and now you're cooking with fire. Do it for two years, if you like the setup, go find another duplex and move into it and repeat. If you need your privacy, buy another duplex and don't rent out your extra room. If after two years, you want a small SFH to live in, then move out of your duplex, hopefully rents continue up and now you are breaking even or making a little positive when you move into your next property. But don't sell the duplex!
Properties in and around Austin, have gotten so expensive that most people are going to have to find ways to cut expenses. I tell all who I mentor, to plan on being your own landlord. That will save you money and give you a lot of experience. Once you begin to acquire more properties, more experience and more confidence, then you're ready to decide if a property manager makes sense or not.
Lastly, when you are told stuff be it from a real estate agent, a friend, mortgage lender, or anyone, if it doesn't sound right ask more questions and have it explained to you so that you can understand. 2008 changed the way investment properties are bought. Before then, you could buy property with 5-10% down, not anymore, unless you are owner occupant. Good luck.
Thanks for the insight.
So what I am gathering from all this is, basically the cash flow numbers I have been told are more than likely fluctuated to get me reeled in and spend my money with them. Unless they can prove and show me how, and a few examples..
I have no wife, no children, no dependents. NOT experienced in purchasing real estate. I work in the Construction Industry, not homes, but utilities. I would be a ''handy-man'' when it comes to homes, I could work on a home up to a certain extent if it needed work and I understand the 75% rule if it was not a turn key. The big issue for me compared to your brothers home, I cannot property management the home...
What do outside investors do in Austin, in a similar situation that I am in ? DO they buy at negative cash flow and bank on appreciation?
I need to get my agent to give me back up for her claim, as this is why I am looking so deeply into the Austin market...
@Account Closed are you renting now!! If so QUIT RENTING NOW! You're a newbie to investing, everyone has to start. The VERY GOOD NEWS is your SINGLE! You don't have to buy a house to suit someone else and you have no kids so you can live in subdivisions that might not be the most desirable but may be the most profitable!!!!!!!!!!
HOUSE HACK!!!!!! You're also a guy, so you can afford to take a little more risk than a female in terms of where you live and who lives with you. If you plan on moving to Austin in a few years or less then maybe you just save and prepare for the move. If not look around in your area and find a house hack situation that will work!
If you were in Austin, I would ABSOLUTELY BUY A DUPLEX and start building wealth. You see what makes little to no sense to a pure investor (non-occupant) makes complete sense to an owner occupant in Austin. Someone paying 1200-1500 in rent can buy a duplex and rent out one side and also rent out one room on his side and almost live rent free in a very expensive market like Austin. You can probably find a similar deal where you are. If not be willing to move out of town to find something that works. And the ICING on the Cake is that you said you're somewhat of a handyman............Boom your property management and repairs just got dirt cheap!!!!!!! Go young man Go, tackle the world and begin building wealth, it is all in your hands!!!!
Second home mortgage, but not living there is fraud and can get you in trouble. If you own a home now, rent out the individual rooms as many as you can stand. In Texas, duplexes abound, maybe not so much in CA. I don't know for sure. Think small multi-family on your next purchase! Good luck.
Originally posted by @Account Closed:
You found a lender that will treat a duplex as a second home...
It really burns me to agree with Joe about anything but he's not wrong. You need a better class of 'agent' and 'lender'. You also need 25% down saved up for a $365,000 duplex if you want to modestly cash flow after property management fees.
Rents are starting to creep down. For the past several weeks we've been averaging rent reductions on about 10% of available lease inventory every week. This goes counter to historical seasonality. I don't know if it's possible for you to get your down payment up in time, but I'm forecasting that some good multi-family deals will hit the market in Q4 2020. Rents will rebound but goods deals are far and few between.
Great information, @Joe Scaparra thanks for sharing with us. The information you shared makes it easy to for anyone looking to invest to look at numbers and analyze them clearly.
@Account Closed become a pro so you can take advantage of many more features here including getting acquainted with calculating deals. Keep educating yourself. I can’t stress this enough.
I’m on the conservative side of investments. What this means is that I don’t like to leverage like a fool. I like to know and be at peace when things get bad like a recession or Covid-19. I either purchase all in cash or put down greater than the requirement of 25% down.
In my line of career at the moment, I work with thousands of realtors. And I mean thousands. Part of my job is to make sure I bring value to them. One of the values is to help them grow their business or pipe line. There are a ton of realtors that mean well but do NOT have experience with dealing or have dealt with investment properties. None. Nada. Find yourself an agent that is truly an investor friendly agent, is extremely knowledgeable of the market, and even better if they have weathered through the crazy cycles of real estate like high interests rates, recession, hot market (strong negotiation skills), does business with like-minded reputable vendors (lenders) and the latest, Covid-19. I can name many more. But please due diligence with whom you talk to and sign a contract with.
Please don’t take this wrong: your best option right now is keep saving, keep educating yourself about everything and anything, and wait. Deals will always be there. But only the ones who are prepared are the ones that will jump on them and do well.
That price is a little unrealistic and if you do find one for $300k it will need lots of work and probably wont have good tenants or produce the rents you need. Duplexes in that area are currently in the $330-355k range. What loan type are you looking at? I would strongly suggest the 3.5% FHA / House Hack approach. That's exactly what I'm doing in a duplex in Round Rock. Keep saving that money, learning the market, and analyze LOTS of properties to practice your skills.
@Account Closed that you need to find a better class of professional to work with. You did make the right move posting here. Get honest feedback and allow peers to weigh in on the data points you have been provided. $300-$800 monthly cash flow on duplex under $300k with 20% down payment in Austin proper or even immediate surrounding suburbs is an alluring claim. I would suggest asking that agent to send you the calculations they ran to support that claim with an accompanying property address. Then verify for yourself.
You can absolutely make and create wealth in the Austin market and in terms of economic sheltering, Austin is one the highest rated markets to weather an economic storm. In the interim leading up to your purchase, save as much as you can and soak up the information on this website.
Good evening Christopher, Welcome to Austin!
Duplex's are great investments but not the be and end all. And contrary to what others may say, it is very possible to find duplex's under 300k in Austin. Those types of deals are mostly sold off market, that's why it sounds foreign to most. I think the reason why there is so much emphasis on duplex's is because you can get higher rent then a SFR and the resale market is so limited while demand is so high.
Cedar Park/Leander and Round Rock are especially popular because of the school districts. They are probably the top two school districts in Austin for families purchasing a home in the 250-300k price range.
At the end of the day I believe the key to getting a good deal in Austin is buying it for the right price.
Thanks to everyone for their views and information. I am taking it all into account to try get a better grasp for the Austin Market.
The more tips and advise the better so keep it coming ...
Originally posted by @Joe Scaparra:
@Account Closed, the real estate agent you contacted quoted you this? "I spoke with a real estate on the phone about all of this, she told me, with $300k, she can make it work that I will be cash flowing between $300 and $800 a month. Now, she didn't give me details about location, type of home etc. etc. but she was aware of all my numbers. Is this unrealistic, just to get me on board with her?" Also, "so I need to come up with a revised approach if $300,000 with 10% down (I have been pre approved) is not going to work in Austin with the above numbers.".
Ok, I think there is either some miscommunication going on or your getting bad advice.
1. If you are investing in Investment Real Estate (meaning you are not owner occupied) you will be required to put down a minimum of 20% and a lot of lenders are requiring 25%. If you are buying a home that you will live in then yes there are loans that you can get that only require 3-10% down, If you had military service and qualify for a VA loan you can get 0% down. BUT ONLY IF YOU ARE OWNER OCCUPANT.
2. If you have an agent that can get you 300-800 positive cash flow on a 300k property with 20% down in Austin, then ask her to show you a real live example and to show you the numbers. It is not that hard to either prove her right or wrong. I would be very skeptical that she could produce those numbers but I don't want to call her a liar. So just say to her to show you a property on the market today in Austin that could work. Now I do think you can find something similar just not in the Austin area.
My brother just closed a duplex in Elgin, TX, about 30-40 mins to Austin. He bought it for 174k and it brings in 1850 in rents and I believe those rents could be renewed to about 2000 next year. He does his own property management and he is clearing $400 positive each month now. However, if you're not experienced, not from the local area, and not ready to pounce then to close a deal like this is going to be hard.
Again, I don't know much about your experience but if you are serious about moving to Austin and you don't have any kids over the age of 5, this is my recommendation: Save your money until you move out here. Look for a duplex, buy it, move in one side, rent the other side. If you're single and really motivated, rent out one of your rooms on your side and now you're cooking with fire. Do it for two years, if you like the setup, go find another duplex and move into it and repeat. If you need your privacy, buy another duplex and don't rent out your extra room. If after two years, you want a small SFH to live in, then move out of your duplex, hopefully rents continue up and now you are breaking even or making a little positive when you move into your next property. But don't sell the duplex!
Properties in and around Austin, have gotten so expensive that most people are going to have to find ways to cut expenses. I tell all who I mentor, to plan on being your own landlord. That will save you money and give you a lot of experience. Once you begin to acquire more properties, more experience and more confidence, then you're ready to decide if a property manager makes sense or not.
Lastly, when you are told stuff be it from a real estate agent, a friend, mortgage lender, or anyone, if it doesn't sound right ask more questions and have it explained to you so that you can understand. 2008 changed the way investment properties are bought. Before then, you could buy property with 5-10% down, not anymore, unless you are owner occupant. Good luck.
Wow Joe, thank you so much for educating us. Really appreciate your numbers math.