All Forum Posts by: Brian Adams

Q1: You mentioned taking a capital loss if you had to sell? Have you had a market analysis done recently on the price? Obviously Austin has taken a hit on prices and continues to be soft at the moment. I would make sure you know what that $ is at the moment and the potential DOM risk before making the decision to keep it vacant chasing a price you can't get. 

Q3: I'd be happy to do a CMA and underwriting for free if you'd like to DM me the address so I can give you a more precise opinion. I think that's the only way I could give intelligent advice on this Q.

Q3: My personal rentals have not, but I bought in Lawton, OK because that was my duty station. I've sold my Killeen rentals during the increase in prices, but even those probably did not beat the S&P during my hold period because they were cash flow negative and a long hold period. I didn't do a full IRR analysis at the time, but it probably didn't beat the stock bull run. That said, I bought them with VA and FHA loans so my return on assets was still pretty good.

Q4: I love Texas and am biased. But I think Texas is the future of America. Just as the 1800s were New York's century, and 1900s California's century, the 2000s are Texas's century, and it is only just beginning. I think anyone who is holding property here with a long term view and doing it smartly is more likely to be rewarded for it than not. It sounds like you've put some capex into these already. That might be necessary whether you continue renting or selling either way. But would be a shame if selling into this market were the outcome. My gut says that if you are still break even or better, you'll be glad you held in 10 years time. 

I bought 5 homes in 5 years thanks to being in the Army between ages 22-27. Turned most of them into rentals after I moved. 

But while the plan was always to house hack, I didn't spend enough time looking at what would make the best rental. I was still looking for homes I would personally be comfortable in. 

By House #4 I figured out I should do fourplexes/duplexes, and managed to get a fourplex with owner-occupant financing. But if I had done that one House #1-3 I would be several hundred thousand dollars richer today. 

Not all metros have good 2-4 unit options, but I would look there first as a house-hacker.

@Jack Seiden

There is a lot more variability in commissions then 2.5-3%. 

If you are looking for a discount listing agent, I can point you toward many. All of whom existed long before this settlement. 

Here is the range of cooperating commissions on DFW duplexes listings active as of last week. Is this collusion? Looks like there are plenty of options. 

@Jack Seiden

The buyers representation agreement has a clear portion that spells what commission the buyers agent gets and where he gets it from. That was true already. 

This doesn't create more transparency. It creates less. 

Sellers already shop listing agents all the time based on commission. 

Buyers already shop buying agents all the time based on commission, e.g. working with agents on commission rebate programs. 

I'm sure DOJ has great intentions. Everybody always has the best of intentions. That matters for naught. DOJ has solved a "problem" that didn't exist and amazingly has now hurt the very consumers they thought they were helping, all while stealing millions from brokerages and NAR members on bad litigation.

That's what I see from my foxhole. I could very well be missing something, though. It's not on my top 10 things I'm thinking about at the moment.

@Tyler Hodgson

Killeen MLS Duplex transaction volume (2024 YTD) + Average Price:

Same for DFW:

So a similar ratio. 2-4 families just aren't that common in DFW. 

@Anthony Blanco

I don't use the exact model that BreakIntoCRE's courses creates. I just used the knowledge to create my own, though it, of course, closely resembles what he puts together in the course. 

I've been using it for all buy-and-hold analysis with fixed interest rates and hold period at least 5 years long. This is an example I was just sharing on a fourplex deal in another forum thread:

The biggest thing the particular course was "missing" was itemizing the expenses. In the particular course I took, he just assumes a particular NOI and growth, whereas my model breaks out both the revenue and expenses a little more as is done in other models to calculate NOI.

@Russell Brazil

Ah yes, I forgot about forcing people into buyer agency. How absurd. 

Before I could show you a home and you didn't even have to commit to me as your Realtor! What is more consumer friendly than that! 

DOJ...FTC....all of them are not serious people. 

If you want to get into multi-family underwriting, I suggest the following YouTube channels:

https://www.youtube.com/@BreakIntoCRE

https://www.youtube.com/@tacticares

https://www.youtube.com/@adventuresincre

Break into CRE has some VERY affordable courses on underwriting Excel underwriting models. I bought several myself which were essential to my first models. Most of these have free versions of their models you can get.

But I never found one that was ready to do everything I needed out-of-the-box, so I built my own. 

My goal is to build something like what you are talking about for simple deals - a user friendly Excel that even a Realtor like me could use! But my current version isn't show ready yet.

I updated my blog article with a snapshot of Killeen fourplexes. 

There haven't been any built in the area since the 2000s. My understanding as to the reason talking to local inspectors was the updated building codes made them uneconomical; specifically requiring that buildings with more than 2 units have to have fire sprinklers. I don't know for certain whether that is true, but it would certainly explain why duplexes continue to take off while there are no new fourplex neighborhoods anywhere. 

You're right that rents have not caught up to prices. Prices have topped out, and still represent about a 6% IRR. But you'll be cash flow negative for a while.

Ironically, I think the DOJ nonsense is backfiring on their intentions. 

I do NOT think it will lead to commission compression (which may happen anyway with or without the settlement). 

It does NOT lead to more transparency. For example, I can no longer use commissions in the filter for NTREIS. The reason is to keep me from screening out low commission options. But what it does instead is makes it very difficult for me to share with my seller what the average cooperating commission is in Dallas. So instead of a data-driven and transparent approach to recommending commissions, more and more sellers will be entirely ignorant of what the prevailing and competing commissions are. That probably means sellers will more often rely on the X% that folks vaguely believe to be the industry standards. 

But I see little to suggest it will lead to anything meaningful for consumers. Home buyers already had the option of not using an agent. Sellers already had the option of not using an agent or offering a reduced commission. 

What am I missing, @Russell Brazil?