Why MTR house hacking is a good idea in Austin

Question

House hacking in the Austin, TX market can be a great way to create a real estate portfolio while also generating positive cash flow. One way to do this is by targeting the traveling nurse market. Austin has a number of hospitals and healthcare facilities that bring in traveling nurses for short-term assignments, creating a demand for furnished, medium-term rentals.

By purchasing a multi-unit property and furnishing the units, you can attract traveling nurses looking for a convenient and comfortable place to stay while they work in Austin. This can provide a consistent stream of rental income, allowing you to offset your living expenses and generate positive cash flow. As the value of your property increases, you can also build equity and potentially expand your real estate portfolio. Overall, house hacking and targeting the traveling nurse market in Austin can be a smart and profitable way to get started in real estate investing.

Jordan Moorhead · Answer

@Galen Ikonomov check the tax assessment to see what they're valuing it at. Protesting is easy when you buy but after that it pays to have a company like Ownwell or Home Tax Shield do it. Home Tax Shield only charges $30 a year and they automatically do it every year. You only pay 30% of whatever they save you too.

Chris Schorre · Answer

That's exactly right. Once you truly calculate real estate taxes (roughly $2,200 annually per $100,000 of value) and then add on cap ex and maintenance, it is very difficult to cash flow SF, duplex or even fourplex financed properties in Austin. But I'd love to see someone put forth some concrete examples (financing costs, taxes, insurance, capex, maintenance, etc) of how that is possible in Austin.

Eliott Elias · Answer

Do you believe you can still cash flow with how expensive multifamily is in Austin?

Jonathan Marsh · Answer

Do these types of MTR numbers apply up in round rock near are of those hospitals or are you talking more Austin proper?

Galen Ikonomov · Answer

Jordan, it appears that most of the duplexes in a decent area in that price are around that range as far as taxes. But thank you for the recommendation. I thought I had to go through the dispute process, maybe hiring a company to dispute it for me, blah blah blah.

Jordan Moorhead · Answer

@Galen Ikonomov $600,000 and $22,000 something was really over assessed. That should be more in the $12-15,000 range. Always check the tax records to see what the tax rate is and what they're assessed at. Many times they're assessed much higher than market value and you can just send your closing disclosure to the tax assessor when you close to get it adjusted.

Conner Olsen · Answer

You've got to shift from LTR! I haven't found a LTR that works at 80% LTV in 2 years. Here's a deal analysis of a duplex on the MLS right now.

11402 Walnut Ridge
Listed $389,900 - Seller is in Bankruptcy
Purchase Price $389,900
Down payment 25%
Rehab $45,000
Interest 8%

Gross Rent - $5,100 MTR

Vacancy - $510
Taxes - $680
Insurance - $150
Maintenance - $175
Capex - $175
Utilities - $350
Internet - $120
Total Operating Expense: $1,651

NOI - $2,939

Loan Payment - $2,146

Cash Flow $ 794/month

Cap Rate 9%

CoC 6%

Conner Olsen · Answer

There's one on the MLS right now with a 10 Cap, and 10.5% CoC, $655/mo, FHA 3.5% down. We're starting to get back to cash flow!

Galen Ikonomov · Answer

My favorite part when I was looking for MF property in Austin is the taxes. You look at a fairly looking duplex on the market for $600,000 and the RE Taxes on the property are $22,000 per year+. I am sure that there are way cheaper options in the neighborhoods, but these are not going to attract the best tenants.

Why MTR house hacking is a good idea in Austin

Why MTR house hacking is a good idea in Austin

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