Anyone in Austin, TX?

Question

Hi all,

I just started reading the BRRRR book by Biggerpockets and would be interested in starting in the near future. I've been looking at off market properties in Austin TX and the surrounding areas and have seen that due to the high demand so to speak in this area the prices for a BRRRR property would mostly be around $300K or more, with the exception that I've seen a few properties in the low $200Ks. Considering Austin is not a cheap place for housing, would it be normal to pay over $250K+ for a BRRRR property? Has anyone in Austin been doing this recently? I'd like to hear your thoughts.

Thanks!

River Sava · Answer

Hey Celso - Our HQ is in ATX. The market has definitely gotten more competitive, and it’s common to see BRRRR deals over $250K, especially given the high demand/appreciation in the area. However, higher property values mean there’s also potential for strong rent growth, which can help balance out the numbers when you refi. I’ve seen some investors focus on surrounding areas or neighborhoods with more value-add potential, as they can offer better cash flow options.

Curious to know if you’re also considering multi-family properties in the area? Those can sometimes offer more favorable numbers for BRRRR in markets like ATX.

Ryan Kelly · Answer

@Celso Rodriguez BRRRR works great in markets where you can buy homes around $200,000 or lower. The higher you go in price, the ratios get too hard to make it work without leaving as much money in the deal as you would a standard down payment.

Jim Johnson · Answer

I live in the Austin area and have one rental property in Cedar Park.  However, for other investments, I'm looking outside the area.  It's too expensive in Austin (for me) for cashflow.  If you had a decent war chest of funds for purchase and rehab, the area could be good if you want appreciation for the next couple years.  As @Julia Lyrberg said, I would suggest other areas unless it's a great deal

Celso Rodriguez · Answer

Hello,

Yes, I would definitely be interested in multi-family. Although I would like my first investment to be a single family home. I appreciate your response, it has been very helpful.

Aubrey Durham · Answer

Hi Celso,

The BRRRR Strategy is all about picking the right location and lender. If you are looking in Austin around 200-250K you will likely have a massive rehab budget which typically makes cash flowing a BRRRR rare. I have a lot of investors who BRRRR and they typically stay in the outskirts of Austin - there are certain pockets that have great BRRRR #'s like Kyle & Manor.

I am a licensed real estate agent in Austin. Reach out if you would like to see some examples. I also have a lender that specializes in financing BRRRRs and I can get you in touch with him.

Jackie Nyambura Everett · Answer

Hi Celso,

I have been reading the BRRRR book by Brandon Turner and located in Austin Texas. I invest in central Texas would be great to connect. I am certain we can share knowledge and resources.

Jackie

Mary Jo Carruthers · Answer

Brrrr is a great strategy but one needs to be on point with the numbers. If you use hard money loans or fha 203k loan or some other construction type loan then you will need to be focused on the finance charges and shop around. There can be considerable differences.

Also you need to think about the refi on the back end. This can be tricky as it requires a little forecasting about the market in the near future. Lenders will refi at 70% loan to value (ltv) plus or minus 5-10% percentage points. The value will be determined by an appraiser hired by the lender. An appraisal is an opinion of value and that opinion could be off.

Its important to have a smart realtor that can help you through the process and fight on your behalf. And I didn't even dive into the construction aspect and knowing what works and doesn't work for a chosen submarket.

Jake Baker · Answer

@Celso Rodriguez

It's great to hear you’re diving into BRRRR! Austin has become a pricier market, so seeing BRRRR-ready properties in the $250K+ range is expected here. Due to high demand, many investors in Austin are finding they need to adjust their approach a bit to make the numbers work.

Rehab Budget: Ensure that bids are received from multiple contractors and that adequate reserves are made for cost overruns.

Julia Lyrberg · Answer

Investing in Austin's real estate market can be challenging due to high property prices and market saturation. I'd recommend looking at other markets unless you find a really good deal!

Celso Rodriguez · Answer

Thank you for your feedback, highly appreciated.

Anyone in Austin, TX?

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