All Forum Posts by: Dan Burstain

Not all rentals are listed in the MLS but it is the best place to get rental comps. I can tell you in the last 30 days we have seen Zipcode 78644 homes between 2600 and 2800 square feet go for $2200-$2900 depending on home condition and features. Getting a Realtor to give you accurate rental/lease comps would be the best way to know what a place would rent for. Not only do you want to see rental value but how quickly those places are renting as well.

Hey Nick,

Are you looking out near you?  I have one here in Round Rock, near your other place that would work.  

@Robert Tinker  Good question about Taylor.  Taylor is just a bit further out like Bastrop, like Elgin, like Liberty Hill, but just those areas, we are seeing prices rise.  It is just a little slower the further you go out but that is not unusual.  With more and more homes being built out in Jarrell and other cities even further out than Taylor, it makes Taylor a great place for grabbing a property in that low price point before it continues to climb over that $300K price point.

Are you looking to maximize cash flow or ROI?

ROI- no better place than Austin. If you need to have positive cash flow in year ne then 4plex or greater or rent by the room.

Money is still very cheap so I would recommend putting the minimal down.  You can find something that will pay better than 4% on the money you keep.  Also, it will depend on where you buy in the Austin area, but there are some 4 plexes you could still break even cash flow with the minimum down.  You will at least have no problem covering the note.  

I can tell you that as an agent/investor I put my money where my mouth is.  I am looking to buy my 7th property in Austin right now.  People have been waiting for the crash in Austin for 40 years.  Look at the sales data over the past 4 decades.  A continuous stream up.  Why?  Because we have a huge government and university job base that keeps us out of any big dips.  Austin is not the place to maximize cash flow but it is the place to maximize return on investment.  So if you can afford a little negative cash flow the first few years you will be very happy you jumped in the market now.  The 150 people moving here every day think our prices are very low.  Show me another city with our job growth, voted the best place to live in the US 4 years in a row, that still has brand new homes in the $300,000 range 20 minutes from downtown.  Yes, 5 years ago that number was closer to $250K but 5 years from now it most likely will start with a 4 or even 5.  There are no guarantees but 40 years of data, tens of thousands of new jobs, Tesla, Apple, Oracle, Amazon, Google, and 100's more still building here tells me if you are waiting for a crash, you will be like so many saying the #1 quote by far that I hear - "I wish I would have started investing earlier".

Great place to start if you are okay sacrificing some cash flow for lots of potential appreciation.  I continue to buy in the Austin area.  

Anyone have an idea what the largest drop in price has been in Austin in 40 years?  2.9%...1.9% during the housing crisis (worst thing ever to happen to real estate).  Do you think every city in the US is like that?  Do you think a huge government and university job base may have something to do with the lack of a roller coaster ride in prices you see in other cities?  Does it make sense that not all cities share the same investment makeup?  People who tell other investors they should never buy something with negative cash flow in a city that they don't have a strong understanding of the data history for that city are not helping that investor.  Despite your track records.  Despite what you have had success with.  Let me tell you people have made millions in real estate in Austin and will continue to do so despite not breaking even or showing positive cash flow in years one and two.  So to blanket statement saying never invest in negative cash flow may be something that resonates with you but should not be the rule of law for investing.  I am looking to buy my 7th investment property here in Austin and none have started with positive cash flow and all have positive cash flow now.  Just about every home in Austin went up $100,000 or more in the past year.  How much positive cash flow and appreciation did you make last year?  Is it a spike, a bubble?  Well if it is it would be the first in our history and oh, 1700 companies moved here from California the last few years.  Apple, Tesla, Oracle, Samsung, Amazon, have yet to open their new facilities here.  150+ people move here a day and all based on jobs, jobs, jobs.   

Depends on your goals.  Looking for more cash flow or return on investment.