Analysis

[Jacob James Caballero]

I am currently looking for my first investment deal and am very interested in multi family. I am looking out of state because I live in an extremely expensive area of California where a typical mobile home is 300k plus. I got my eye on Texas and am curious to know what you guys think. This particular property is in Austin Texas.

I am looking at a 5 unit In Austin.

$450,000 asking price

3.9% cap rate

2,398 square feet building

Garden low rise

100 percent occupancy with rents ranging from 650 to 750

NOI: 17,550

New roof and new hvac systems heating and ac

Is this a good investment guys? I currently have a 740 credit score, no debt and about 20k cash for a down payment.

[Linda Osborn]

@Jacob James Caballero

I would recommend you locate a good team to work with should you decide to invest in another state. It is important in these cases that you work with someone you trust who has your best interests in mind.  We recently had a California investor client that bought a 4-plex in Austin from a real estate agent that either did not understand the rental market in the area, or was more interested in the sale. The unit is in a very bad part of town, and was being poorly managed, including having tenants that were not paying their rents, had unauthorized pets, had done damage to the property, the place was creepy crawly with bugs, etc., etc. We were called in to pick up the pieces, which consisted of kicking all the current tenants out, doing a complete (expensive) rehab, and re-leasing the units. However, because of the area the property is in, we are having more challenges leasing this property to good tenants than any other property we manage. Please be very, very careful when investing out-of-state, especially if you have no one to vet the property and the tenants for you.

The advantages of working in your own back yard are many, and you can find deals there if you know where to look. 

However, if you do want to invest out-of-state, start finding a team to work with you!