All Forum Posts by: Dan Burstain

I like Rick's answer. I would be wary of Galveston and/or coastal real estate. What is your goal? ROI? More cash flow?

1. What are some good neighborhoods(zip codes) in Leander?  Price point will dictate what neighborhoods in Leander you are looking in.  Overall, it is a very attractive, appreciating city with a lot going for it.  10-15 minutes to the new Apple campus.  Putting in a billion dollar lagoon area with shops and restaurants.  On the MetroRail to take you to downtown Austin in 25 min.

2. How soon a 3Bd 2Ba rents and what is the vacancy rate?  If you price it right it will rent quickly (within a week or two).  A good Realtor will help your vacancy rate be close to 2-3% but you can put in 5% to be conservative.

3. Can I expect to be cash-flow positive? Unlikely without a rehab project or putting more than 25% down. You certainly can cover your PITI and come close to breaking even but with great potential appreciation comes less cash flow. This is not speculation either. 40 years of data shows the economy here is setup to have reliable appreciation. Not to mention, lots of new jobs, jobs, jobs.

4. Can someone share a reference to a realtor and a PM that serves that area?  I sent you a message.

Supply and Demand

Supply is down 74% from January 2020!!!!  That is 3,800 less properties on the market than last year.  STOP ----------- and let that sink in.   Jan 2020 = 5,251 inventory    Jan 2021 = 1,369 inventory 

Inventory is DOWN 7,900 Units from 10 years ago in 2010. Jan 2010 inventory = 9,261 units And in the last 10 years, Austin has added over 300,000 to its population.

Months of inventory is 0.4 months. (Months of the inventory measure supply and demand. The current inventory is divided by the average sales per month for the last 12 months to show months of inventory. Economists say that a balanced market should have about 6.5 months of inventory.)
The Months of Inventory has NEVER been this LOW in the LAST 30 years of MLS reporting !!!!!!
    
DEMAND - Total Sold Units = Total Closed Units Comparing January 2020 to January 2021 Sales are UP + 24 % @ 500 units !!!!!  There was NO slow down for the Holidays !!!!!!

PRICE

Price was Up + 9 % to $341,400 Median Price for all of 2020.  Price is UP = + 7 % in January 2021.

Economics 101 Supply and Demand -  If Supply is low and the Demand is high the Price will go UP.
We expect Sales to continue UP in 2021.  Why?  JOBS JOBS JOBS, and people moving to Austin !!!  

Now, does this mean Austin is too hot to buy in?  NO.  If you like Return on Investment, there is not a better city in the country to invest in.  There are even still positive cash flowing opportunities, especially with the 4-10 unit places.   There are also AirBnB, new build, condo's that will positive cash flow as well.  New build single family homes are hard to find these days for investors as builders have gone to selling only to primary home owners but there still our some opportunities in Kyle, San Marcos and few other suburbs as well as plenty of homes that are a year or two old.  Prices should continue to go up as they have done for 40 years in Austin so the time to buy is sooner than later.

Hi Alexis,

IMO If you look at the volatility in median sales price between the two cities you will see Austin is a much safer bet.  If you look at the huge job base Austin has with the government and university to support any downturn in the economy (as it has done for 40 years now with the biggest drop being 2.9%) Austin is the better bet.  If you look at the future job growth between the two cities, Austin is the better bet.  Take a look at the major employers.  Take a look at companies putting billions of dollars each into the city in the next 5 years (Austin has Apple, Tesla, Amazon, Oracle, Samsung, etc).  I think it is a no-brainer, IMO.  

Texas has set up a rent relief program. If you want to slog through it a press release is below, but the important information here and feel free to share:

Beginning February 15th, applicants can submit their application by calling 1-833-9TX-RENT (1-833-989-7368) or submitting it online at TexasRentRelief.com. The call center will be open Monday through Saturday, 8 a.m. – 6 p.m.

To qualify, households must be at or below 80% of the area median income as well as meet other criteria. Per federal guidelines, TDHCA will prioritize applications for households at or below 50% of the area median income level and households where one or more members are currently unemployed and have been for at least 90 days. Landlords are encouraged to apply on behalf of tenants, who must co-sign the application.

For Immediate Distribution | February 9, 2021 | (512) 463-1826 Governor Abbott, TDHCA Announce Statewide COVID-19 Rental Relief Program Program Provides Over $1 Billion In Rent, Utility Assistance For Qualifying Households AUSTIN - Governor Greg Abbott today announced that the Texas Department of Housing and Community Affairs (TDHCA) has launched the Texas Rent Relief Program — the first statewide rent and utility assistance program for qualifying households throughout Texas. This program has been created to administer the more than $1 billion allocated to Texas through the latest federal COVID-19 stimulus bill. TDHCA will begin accepting applications for the program on Monday, February 15th, but Texans can visit TexasRentRelief.com starting today to learn more about qualifications, required documents, and the application process. "The COVID-19 pandemic has placed a significant financial strain on many Texans, and the Texas Rent Relief Program will provide an incredible lifeline to households in need of assistance on their rent and utility payments," said Governor Abbott. "I urge qualifying households to apply for this program once applications open on February 15th. The State of Texas will continue to provide the resources and support for those in need throughout the pandemic." “The pandemic has dealt a heavy blow to many Texas families. The Texas Rent Relief program is for those Texans who need help to pay rent and utility bills and I encourage those who need it to apply. These resources will provide support for Texas families who need it while our economy continues to recover," said Lt. Governor Dan Patrick. "Texans have been resilient in responding to COVID-19, and this program can provide short-term assistance to families in need as they emerge from the financial aftershocks of the pandemic," said Speaker Dade Phelan. "This program is a key component of our state’s pandemic recovery effort and will be essential to the rebound of our economy, workforce, and education system. I am thrilled that qualifying Texas families have an avenue for temporary relief on essential items like rent and utility payments when it truly counts the most." To qualify, households must be at or below 80% of the area median income as well as meet other criteria. Per federal guidelines, TDHCA will prioritize applications for households at or below 50% of the area median income level and households where one or more members are currently unemployed and have been for at least 90 days. Landlords are encouraged to apply on behalf of tenants, who must co-sign the application. Beginning February 15th, applicants can submit their application by calling 1-833-9TX-RENT (1-833-989-7368) or submitting it online at TexasRentRelief.com. The call center will be open Monday through Saturday, 8 a.m. – 6 p.m.

There still our a few places where new builds are available to investors.  They are a bit further out but some still within 30 min to downtown Austin.  But if you want anything in Austin or Cedar Park, Leander, even Pflugerville, your only option is to buy a newer home vs. new build.  

Austin is simply the safer bet.  We have a huge government and university job base that keeps us out of any rollercoaster ride you see in Phoenix and other cities.  People will say Austin prices are high but compared to what?  Yes, prices are higher than they were.  Are they Seattle or San Jose high?  Not even close.  Yet we have businesses (aka jobs) flooding into Austin.  It has been rated the top place to live in the US like 4 years in a row.  The richest man in the world just moved here and brought a few billion dollar company investments with him.  Apple, Oracle, Google, Amazon, Samsung, you name it they are putting billions into Austin.  So some say prices are high and I say you will wish you had bought these high prices today a few years from now.  

Follow the money and the job.  Austin is growing 150 people per day.  Apple, Tesla, Amazon, Oracle, and many others all spending billions of dollars here to build new facilities.  Happy to hop on a call to discuss the market.  Safest place to invest as well with the largest price drop in Austin's history was 2.9% (1.9% in housing crisis).  

Follow the companies spending millions of dollars trying to figure the same thing out and come to Austin.  I sold my duplex in Long Beach, CA and bought a duplex and 3 single family places here with a 1031 exchange.  

There are a few positive cash flow places further out but the places you mentioned are good and have a few break even spots.  Georgetown and New Braunfels have positive cash flow on new to newer homes.