All Forum Posts by: Anja Schepp

@Bruce Woodruff

Thanks for the input, Bruce. I will reiterate the importance of this to her. How does one contact a realtor's broker directly? There is unfortunately no designated guest parking on the premise, but again, maybe the seller knows something I don't.

Hello All!

Hoping to pick some brains on this one. I am under contract for a condominium near downtown Austin, TX. Intent is to occupy/heck for about a year to update, then rent. The seller listed the unit as having 2 spaces, and that is what is written in the contract that I have been signing to date.

Title, the lender and everyone else has signed off, assessment and inspection are done, and we are set to close on the 5th.

However, I cannot find legal record ANYWHERE of the second parking spot. The HOA docs that were provided showed only 1, and I flagged the issue to my realtor and asked for clarification. What I've read online says title and assessment should've caught this in their reviews. Regardless, it seems I have to choose between asking for more credit (unlikely), dealing with it (making this a significantly worse first investment), or walking away (not even sure if I have that option anymore). Or, eventually sue when the home purchased doesn't match the contract, but that sounds horrible, and more like I just didn't do my own due diligence on the property.

If I went the credit route, I'm not even sure how I'd begin to quantify that.

Any advice would be much appreciated!

@Jay Hinrichs You are correct, in Texas in general you get through land use planning and jurisdictional review much faster than places like the west coast, but Austin is an exception to the Texas norm. I don't make a claim that it is on par with Cali, but it is significantly more difficult and it's often joked about within our firms that if you can get a permit in Austin, you can get a permit anywhere else Texas in your sleep. On a more serious note, it does cause an insane level of backlog in the city, and causes a lot of developers coming from outside of Austin to go belly up when they don't anticipate the time and fees required to build here vs anywhere else in the state - even ~ an hour out of Austin. The city wasn't prepared for explosive growth like this from a development and permitting standpoint, so if you want to see the failed projects, or see it as continued low demand, the most important is to remember that developing in Austin is very different than developing in Texas in general.  

Thank you for the input @Paul Moore! I plan to figure out how I can get in touch with the city planning department ASAP. Great to hear the rezonings went well for you! 

I am hopeful because it backs onto an also newly rezoned (commercial) lot. However, I see it going two ways. IF I can rezone maybe others will follow suit, or more investors will buy nearby lots and do the same, sky rocketing my property to par with the neighboring SF values that are nearly 3x this lot's. OR I become the only traditional residental lot and it changes absolutely nothing and my land value growth is still significantly capped because it will always be surrounded by MH zone, or stagnate until someone can buy out the whole area like has happened recently in other nearby areas in the city. Either way the cash flow SHOULD be favorable enough that I won't be trying to get out of the deal quickly, and buy-and-hold seems to be a pretty safe bet in Austin no matter what else happens to your property. 

@Brenden Mitchum

Thank you so much for your input! Will definitely post updates if the sale goes to choose.

@Brenden Mitchum

Great thoughts and thank you for the welcome! 

1) The MH home itself is almost brand new, records and listing show it was manufactured and placed in 2018. The pictures look nice, and a drive-by didn't trigger any immediate red flags, but I am budgeting for the worst just to be safe.   

2) How would I go about making sure the title is clean? Is that something their agent would provide or a risk I have to take? 

3) Having been a renter in this market for a while I am confident I could get the bedrooms filled. Not going to be a huge cash cow per bed, but with the amount of people moving here (looking for a quick cheap sublease till they find a place they really like), students, and temporary IT and medical workers I don't see myself having any problems filling the other two beds for at least $400/month. At that price I am able to underbid almost any other housing situations available to them, and cover the payment/repairs to the point where I pay less than I currently do in rent. Hopefully I can raise rents, but will wait and see.

4) The cash flow after move out becomes tricky again. Rent to value ratio is currently terrible here in Austin. A per bed, mid term approach seems like it would be the best approach in its current state. However, I am exploring an ADU option in the back, because the plot is SO large and there are already wired outbuildings in the back. With an ADU, it will cash flow almost $500/mo by my estimate, and cash flow in Austin is already rare so that is huge. Without an ADU, I would be lucky to break even.

Again, TIA for the advice. This is way outside my wheelhouse, most of what I look at are condos, just due to the nature of the market here. But land within 10 minutes of downtown Austin is where the real value lies, so the prospect of getting such a large plot for cheap is triggering all these "what-ifs".

Hello all! I see a lot of people with experience in mobile home park investing on here, and hoping someone wants to give their $0.02.

I am in Austin, TX, and like many other places seeing explosive growth and prices driven sky high, 50-100k over asking for SF homes etc.

I have been eyeing a property that is listed as a fairly new mobile home sitting on almost a full acre, checked out tax records etc and the land does belong to the seller. It's currently listed for $/acre rate that's below several recent sales in the area, and is zoned accordingly (MH).

Given land appreciation in an area like this, is this a deal you would pursue? What considerations should you take into account in fleshing out if it is a good deal or not?

I don't mind moving here and house hacking, I currently rent and actually really enjoy the area from what I've seen, so that is definately an option.

Hi all! Recently saw a trending thread about this, so here's a fun case study for the community to support or tear apart. I am at the early stages of looking at the property: "motivated seller", large plot of good land, in a great area experiencing explosive growth even by Austin standards. With the length of the time it's been on market, I know there will likely be issues with the property, and am prepared to offer what I think is reasonable based on comps in the area, negotiate on repairs, have money for my anticipated renovation, and am excited to put in a lot of work in to fix up the little things on my own. I plan to move in and house hack the other bedrooms (2), eventually build an ADU in the back, occupy until I can invest in the next property.

I have not contacted to owner or selling agent about this property yet. Please vet the plan below first. A lot of details left out due to the length of the post.

I have a really cheap lease until April of 2022. I can break it for a fine, or I can afford both the mortgage and my rent.

I believe I have insight on why they're selling. Part is a small construction project on the neighboring parcel starting in later 2021 that will take at least a year or two. This bothers a family, but not so much myself and my target roommate audience. In fact, we'd be excited for a convenience store with quick access to a 6-pack.

More importantly, tax records that show they pay almost 4x the property tax amount as the surrounding properties. the taxation rate itself is on par with the rest of the city, and what I expected to pay, it's just the annual *amount* that currently varies hugely from this property to their neighbors. In an area of a lot of paycheck to paycheck families, if they expected a comparable tax to their neighbors before moving in 2018, an unforseen couple 1000s a year could easily create a need to sell.

I am working with a buyers agent, and hope she can help me negotiate a deal as follows:

-offer up to 12 months lease back - need to switch from "seller in possession" to "resident lease back"

-Take some of the months of the lease back as a reduction to purchase price. Lower price = lower mortgage and much easier time getting it cash flowing while I live there, and when it's 100% rented, which it still be for the majority of the years remaining on a mortgage. Austins rent/value ratio is garbage so this is an important consideration. They end up with less cash from the house up front, but unless they are in significant debt for other things they may prefer to stay in their home, and have a rent free period to catch up and look elsewhere.

- Then charge month to month at a mortgage rate to encourage them to make other plans if they haven't already. We all know people don't value/take care of free things. This will also move me from double paying mortgage and rent back to just rent. A very average rent rate for the area will cover the mortgage payment that I'll have.

- Talk to my lender about interest only loan options. I really have very little knowledge of these, but if I COULD couple that with the extended lease back/purchase price reduction, that would take my base hit to a home run.

I need to make sure my contract documents and covers all aspects of the home: condition, vegetation, fixtures and features etc, making sure I cover my liability for any damages they may cause in thier stay as much as possible. Likely hire an attorney.

I know I am taking an undue amount of risk doing this, and that my assumptions of why they are selling may be completely inaccurate. I do think everyone is motivated enough to make the sale to hassle a complex contact. I am likely the most flexible buyer they will get & know I need to get everything I possibly can in writing from all parties.

I would take solace on hopefully helping a family stay longer in the home they are having to let go, still end up with a property that I would enjoy living in, with a whole years worth of appreciated value in an awesome appreciation area already under my belt, and ultimately a property that gives me a great exit strategy as well as long term investment potential. All with a lower mortgage payment, and reducing hassle in the long term by allowing myself to be picky in the market for future renters. If I could comfortably get into the austin market without all of this, I would, but for many reasons ATX is best only if you're willing to put in the effort and get creative.

Appreciate everyone's thoughts!

I have checked most of my local ordinances and feel fairly confident I will be allowed to execute this plan, but happy to hear any concerns.

@Bruce P. Bellott Hijacking this thread to say I'm in a similar place with not having 2 years of W2 income yet, but I just got pre-approved for my upcoming purchase. Find a lender that counts your university years towards loan applicability. Most lenders will do this, so it shouldn't be difficult just a matter of being up front with them Especially if you had income during those years, they don't look down or raise your rates for having been in school.