All Forum Posts by: Austin Styer

Hey BiggerPockets Community, 

I am a newish investor in Austin, Texas and wondering what your opinions are regarding entering REI through Fix and Flips in ATX in 2025 and beyond? I currently have 2 rental properties in ATX that I flipped + fixed and then rented out. Luckily, I purchased them in 2014 and 2018 and have solid equity and cash flow. Even though I believe I purchased based on strong fundamentals and vision, I also have flipped a few as an investor and sweat equity labor for my dad growing up. I do realize that doesn't make me a know it all investor as even if I overpaid by 20%+++ in 2014, the REI market would have still treated me kindly.

Anyways, I am wondering what your opinions are for getting into REI through Flipping in ATX for 2025 and beyond given the many forces that are at play in ATX including:

1- Interest rate cuts and the expectation that cuts will be a trend in 2025

2- Even with Interest Rate cuts, will this be enough to get people moving since they may be reluctant to move when they have 3% interest rates on their current home? 

3- Job Market Growth is still strong in ATX 

4- Population growth continues although not at the same pace as the pandemic. 

5- Supply side problem - Builders overbuilding creating downward pressure on housing prices. 

What are Flippers planning on doing in 2025 in ATX? 

What do you see as opportunities and threats? 

What area's would you flip in and where would you avoid? 

Is 2025 a good time to actually start flipping in ATX? Seems like anytime after 2010 and before 2022 would have been an ideal time. 

Thanks for any insights you can give!

Also, FYI, I was talking to my lender the other day about buying another house and I mentioned I wanted a duplex this time. She said with a duplex you can only do FHA with 3.5% down if you are going the low DP option. With conventional it would have to be 15% down ---5% DP residence + 10% second home. Or something like that. The jest of it is the only low DP option for duplex hacking is FHA. I did not remember that was why I did FHA (plus I had no money). Since they are both conforming loans, I assume this is standard for all lenders. If I am wrong I would love to hear how to get a conventional on a duplex house hack at 5% down and the name of your lender in ATX. :)

Hey Austin, 

This may not help for what you are asking for, but just wanted to add in my 2 cents here. Back in 2014 I purchased my first duplex using an FHA loan. Looking back, I did pretty good, I lived for free for 4 years and the appreciation, rent savings, and increased income set me up to purchase 2 additional properties. I would recommend if you can to try to get a conventional loan as rates are at all time lows and you would only need a 5% DP rather than 3.5%. The only way to get the PMI off with an FHA loan is to refinance into a conventional once you reach 20% equity. That'll cost you money out of pocket or equity to refinance and who knows what the interest rates will be in 5 years or so. As always, if you can't do conventional, then do FHA for sure. Back then I didn't have the money or knowledge to get a conventional I just did what my lender said I could and it worked out, but doing FHA has costed me a lot of money to get the PMI off. I still won bigly on that first deal, and I would have refinanced again anyways with the way interest rates are now compared to 2014, but that may not be the case in 5 years or so. Just something to think about!

This is just a flex post

I just have to say.. I am glad I purchased my first duplex/house hack in 2013. Back then I was pretty much all in, had no reserves, and would have been in trouble if I had a tenant that couldn't pay for 2 months as I was not making enough money to cover it all, hence the house hack on a duplex. Now if I had purchased that same property in Austin, say a month ago, under the same circumstances, I'd be in trouble. Luckily I now have 17 months in reserves for the the duplex and my current property and any living expenses. I feel bad for anyone that purchased their first duplex a few months ago that just barely qualified. I got lucky with the timing, I am sure there are a lot of people that are not going to end up so lucky. 

@Shay Olson I've house hacked with an FHA loan before and it worked out great. Looking back, I'd go the conventional route if I could. You'd only need another 1.5% or so but you won't have to pay thousands to refinance to take the insurance off. Back then I probably could have found a way to get more for conventional but regardless it all worked out and I wasn't really aware that the insurance on FHA is for the life of the loan.

Did anybody have any updates to this? I have a owner occupied duplex with at least 100-150k in equity. Is there any kind of exemption to getting a home equity loan if, say, I was planning on moving out withing 6 months? I purchased the property 3 years ago with the intention to someday pull out equity for a down payment and transfer to a full investment property. Would I have to move out first or could I get a refi then move out? If you have any advice or what you did please let me know. In trying to pull money out ASAP and purchase a house before interest rates climb a point this year as projected.