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All Forum Posts by: Austin Hughes

Austin Hughes has started 68 posts and replied 440 times.

Post: Who are a hotels main guests besides tourists?

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

I just had a conversation with my mother's best friend, who has worked as the sales manager at a hotel for many years. She would go out to different large companies, and find out when they had people coming into town for jobs and when they were travelling. She has landed big corporate groups staying for an extended period for hundreds of thousands of dollars each time.

That's not a demographic, but it shows you that as an owner, YOU can go decide who comes in your hotel.

Post: Huge House Cosmetic Fix and Flip Analysis

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182
Originally posted by @Subho Banerjee:

Austin,

You probably have done this already, but if not please check the flood zone map. Parts of kingwood gets flooded a lot.

http://www.harriscountyfemt.org

That website is an EXCELLENT resource. I wasn't aware of it until now. The house is in a good area when it comes to flooding. Thanks for sharing.

Post: Huge House Cosmetic Fix and Flip Analysis

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

Hey BP'ers!

I've been listening to the new BP podcasts and catching up on all of the ones that I missed. So much knowledge being gained! The most recent one reminded me that I need to be active on the site as well as learning from its' resources. So here is this deal I am thinking about moving on!

Location: Rich Suburban Neighborhood in Kingswood (northeast Houston)

Square Footage: 3500

Bedrooms: 4

Garage: 2

Bathrooms: 3.5

Est. Repair Costs: $25,000 (cosmetic only)

Price: $287,000

After Repair Value: $390,000

Year Built: 1990

A few facts:

Average comps in the area are $114/sq. ft.

Average DOM for the comps is 32 days.

The last owner had a mortgage of $408,000 on it.

I think this is a great deal needing minimal work in an area that is very desirable!

I'd love to hear what you guys think about it!

Post: Legal Advisor for Partnerships

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182
Originally posted by @James Miller:

Hi Austin:

There's not enough information in your question to give you a solid answer. Like any good lawyer answer, the answer is "it depends."

In general, TX lawyers hate General Partnerships. They give unlimited liability to all partners for their own AND their partners' actions. Most real estate deals are going to be one or more LLCs or a SLLC, or a Limited Partnership with one or more LLCs; depending on scope, dollar amount, any lending required, securities regulation, control, etc.. You should go read about the different kinds of partnerships, go read in general about LLCs, etc.. Just note, that the word "partner" has a VERY specific legal meaning, and most people don't want that specific legal meaning. 

Also, you'll have to contact a lawyer first; they can't contact you first (that's the definition of ambulance chasing, or solicitation, as we lawyers call it). 

 Thanks for this response! You invest and are a lawyer. I respect your gusto for going through all that school haha.

 You seem like the right man or might know the right man to talk to.

Post: Legal Advisor for Partnerships

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182
Originally posted by @Al Wilson:

Best advice is for you to consult with your real estate attorney and get him or her to help you structure your deal. Good luck.

 Thanks why I posted this. I'm asking for recommendations on who a good attorney is. 

Post: Legal Advisor for Partnerships

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

I have been advised (in Brandon's book) to seek legal and tax advice before undertaking a partnership with friends. I need advice on what structure would be most beneficial for my real estate investing business. Also, should I form a separate entity for each partnership I do? How do I need to plan out my taxes after a flip to make sure everything is covered?

If you're a law practitioner or an accountant who's experienced with REI's, please contact me!

What I am really expecting is that some of my fellow BP'ers will give me some recommendations on where to go for this advice. I am in the Houston area, but I do have the internet. Haha.

Thanks, hope to get some good advice!

Post: Will BRRRR Strategy Work With a 203k loan?

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

Thank you all for the input.

I am working with a smaller mortgage bank specific to Texas clients only. I originally knew you had to be owner occupying it to get a FHA loan of any type, but when they found out my credit isn't showing up yet, and I will have to have my mother sign the mortgage, they said the only difference would be a larger down payment. They said nothing about not qualifying for 203k anymore. Maybe they will also consider including rehab costs in an escro account.

Post: Will BRRRR Strategy Work With a 203k loan?

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

Essentially, the BRRRR strategy is where you buy the home, repair, rent, refinance, and repeat the process. I'm sure you all know this.

For my source of funding for the house repairs, I am considering a 203k loan which wraps up all repair costs into the mortgage.

Let's say I get a house valued at $90K for $60K plus $10K for repairs. My 203k loan will be somewhere around $65K after down payment is subtracted.

In the BRRRR strategy, it appears people get regular loans, pay for rehab out of pocket, and then refinance to get their out of pocket costs back. Would this strategy work for a 203k loan since rehab costs are already in the loan?

Post: Credit won't show up for 5 more months-Deal Breaker?

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

Thanks for the advice. The market I am currently in, in Lubbock, TX, is very stable. It even grew during the 2008 housing bubble. It is a big time seller's market. There simply are no deals that hard money would be good for in the long term (1 year). I could flip a house to make money but I still wouldn't have income for a year and I wouldn't have a place to live and rent out.

Post: Credit won't show up for 5 more months-Deal Breaker?

Austin HughesPosted
  • Rental Property Investor
  • Lubbock, TX
  • Posts 455
  • Votes 182

I have a willing co-signer for a mortgage on a house that I am looking to buy who has great credit. I also have about $7000 to invest in a house. However, I have no credit. I wanted to do a 203k loan to purchase and upgrade a house below market value. I would owner-occupy it and pay 3.5% down or around $3500. I would sell it for around $20,000 profit at the end of 1 year. During this year, I would owner-occupy the house and charge rent in the other 3 bedrooms, making about $300/mo. I already have room mates lined up to live there under these terms.

Since I won't be able to be on the loan for the house in time for the next school year of College to begin, My co-signer would be willing to put it in their name, however, it would be considered an investment property since they have a primary home already. The only problem with this is that we would be required to put down 15%, or $16,000 to purchase this house.

I am really in need of options here. I am drawing a blank with time closing in. My deadline to move in (after closing and repairs) is August. If it doesn't happen, I will be stuck renting an apartment somewhere and have no investment.