All Forum Posts by: Andrew Horner

There are lots of 3bed 2 bath homes in that price range in Buda. Just watch out for the taxes- it varies wildly by zip code. 

Man! I missed it! I'm in Buda and would love to catch the next one.

TL;DR  A big new hospital is being built across the street, should I expect a short surge in rental rates/home prices that cools off when the initial wave of employees move in? Or do prices rise and stay there?

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We own our home in a new suburban neighborhood (Sunfield, a masterplanned community in Buda, outside Austin). A brand new hospital is being built across the street from the neighborhood; we're one of the closest homes, and certainly the nicest neighborhood in the area. It is a newer development with new houses being built and completed on the backside of the neighborhood probably weekly at least.

We have high taxes and also a MUD tax, which I think makes it hard to cashflow with renters ("Rent Zestimate" is 1900, after our coming $150/mo. tax hike, our PIMI will be $2250/mo). For this reason we'd expected to stay here and shop for a rental property in a different area. But if this will be a window of opportunity to make a real cashflow, perhaps we should rent this out while we can.

Thanks for the input!

Hey there, 

I'm considering an Offset Mortgage (also known as All-in-One loans, or Accelerator mortgages). My understanding is that this has not been allowed in the US until recently do to tax reasons, but is more common in Canada and Australia. I bought our home last year (FHA), and am looking to buy our first rental while staying in our house.

Benefits:
• Money paid toward mortgage is as liquid as a checking account.
• Lower risk and higher return (I think) than with aggressively paying down my home mortgage.
• Lowers risk associated with a month or two without tenant payments.
• Easy to leverage into buying another property next year.

Costs:
• High interest rate
• Variable interest rate. Tied to 1-month LIBOR... which I know nothing about, but claims to trend, on average, lower than 30-Year rates. 

The associated line of credit would not be used for personal expenses unless perhaps there was a crisis of some kind (a real one, not like a car repair). Instead it would act as funds available for that business in case of a month or two of no-pay by a tenant, or house repairs.

 It is monstrous. How does that effect values and rental rates in Sunfield? 

Idan Zur, I'm expecting to purchase a rental next year if I could get any information about these duplexes that'd be wonderful. Thanks!

I'm not an real estate expert, though I do live in Buda. Taxes are heavy, but my house (in the Sunfield development) is rising in value at a pretty rapid rate. Roughly equal to the 9000/year I’m paying in property taxes. 

This is the first I've heard of them.  I'm a homeowner but not an investor yet, so my opinion is salt. But it the price is $360k for the pair, and suggested rental is $1500/month each side, it doesn't seem like a killer deally relative to what I'm used to hearing about duplexes. But these are in short supply in Austin.

Of course, there is something to be said for having one roof, one property, to care for instead of two. So just based on that, it  would probably be better than two single family properties. 

Thank you! Yes, I think you are right. Looking at Austin’s history, we fare well in recessions. And I’d probably gain more equity by the time a recession happened then I’d lose. 

Since making this post, my wife and I have set a goal to own 5 houses by the time I’m 35 (I’m 29). We bought this first home (fha) a few months ago in Buda. We’ll be set by the end of next year to buy a second one via USDA. (My understanding is I need enough money for 6 months of both mortgages in savings— which is about $30k— and closing costs/down payment.)

It sounds like trying to buy a second property and stay in this one would be a cash heavy method requiring 20% down, so the plan is to rent this out and buy another. If I cash flow on this one, it won’t be much.

So we’ll try to get something with cash flow next. Does that all sound about right?

I've got a high tolerance for risk, but I've also put a lot of risk into my business. I enjoy my work as an artist, and I'm not looking to stop. I'm looking to add stable, passive income, so I can continue to take other risks without worrying about "destroying" my family's future if/when one of my business investments doesn't pan out. If having a lot of cash flowing properties can be done passively, I'd love the cash flow. Is that reasonable? If not, I'm willing to sacrifice short term cashflow for more of my time back. 

Does that help?