All Forum Posts by: Chris Frydenlund

After some studying on Austin area and biggerpocket's teaching on real estate investment I'm trying to screen some homes in Hutto,TX and Round Rock, TX.

The idea of a duplex seems to be the best solution for me and my wife and our new born daughter, but I find duplexes rare in Austin area and often overpriced. Do you guys agree with me? I don't know the market that well, so I might be wrong.

So based on that I thought we should buy a single family home for a year or so, buy another and rent out the first, etc.

My problem is that some of the rules I can use to screen properties before I get into a deeper research seem difficult. If I use the 50% rule non of the properties I looked at will bring in cash flow, but instead I will just be covering monthly mortgage payment (principal and interest). As far as I understand you don't count in taxes, insurance.

Here is one of the houses I've looked at in Hutto, TX.

http://austin.craigslist.org/reb/4316979690.html

The listing price is $160K, 2000 sq. ft., 3 bed/2 bath, build in 2003, 8000 sq. ft lot.

According to this site (http://www.austinincomeproperty.net/sellers/) principal and interest will be around $850 with a 3.5% down payment ($5.600), which means the rent should be $1700 if I use the 50% rule. Then with the 1% rule (because the 2% rules doesn't seem to work in Austin unless I flip) this home should be worth $170K which matches the prices of the home, but no one in this area whould want to pay $1700 in rent in Hutto, TX for a 3 br. Or am I wrong?

Hutto seems like a neighborhood, where the prices are still good. Is it a newer neighborhood? And what do you think about it future? Is it a popular new growing area?

Thanks for all the good advice. From what I understand of what you all are saying it seems best to get insurance and keep it in my name. Thanks! I'll look into insurance opportunities.

Hey BP members!

I'm from Denmark, Europe moving to Austin, TX, with my wife from Houston, TX. I have a great passion for REI, but here in Denmark the options are far more limited for a young man like me. Since we're moving to Texas I now see it as possible to start my REI. So I'm reading a lot of articles about REI in America, and it has taught me a lot. My concern is still that there are some things that America does different from Denmark that I don't understand, so hopefully you BP members can help me solve those questions.

I posted my first topic 4 days ago about moving to Austin, TX looking for a single family home as first time buyer. I wanted to hear from the locals about where I should be looking for a home and the responses I received have taught me a lot about where to look for a home under 200K and where not to consider.

But the thought of buying a home with the hopes of incurring a profit in the end may not be as realistic as I once thought. Ali Boone made this even more clear to me (read her article) in my second post where I asked if it's a bad idea to buy a single family home as first time buyer, instead of renting if I need to save for my dream home.

Brandon Turner explains why buying a duplex instead of a single family home is a smart choice as a beginner's first investment property in his article. The duplex idea is not common in Denmark, so it never crossed my mind.

In just 4 days you BP members have been a great help. It's great to have someone to guide you on the way. Thank you all! I even managed to convince my wife that buying a duplex is the smartest thing to do, if we want to have a good start as new parents with new jobs while paying off school loans and saving for our dream home.

So, now I'm wondering whether I should/can buy our first home (duplex) in a company's name?

In Europe we hear about some scary cases about someone who sues someone else for no reason, and it ends up costing the defendant a whole lot of money. I want to make sure this business won't hurt my family. In Denmark you create a company that owns the properties and in case something happens it will only hurt your company, not yourself. So we'll never end up having to pay something from our own pocket, but the company will until there's no more money in the company and it shuts down. And since the purchase of our first duplex won't be the last, I thought it would be smart to create this company from the beginning, so everything runs through that. Is this possible, and if it is, which options do I have?

Great article Ali. Now it's difficult for me to even think about buying my own single family home ever, but I guess I can't avoid it at some point.

I did a smaller calculation and convinced my wife to think about the idea of getting a duplex. From my calculation a 200K single family home with a 5% down payment will cost us around 94K after 5 yrs of mortgage payment ($1403/mo). If we could rent out half a duplex for the same amount (200K) and they pay half, which probably is bargain for the tenant, we could potentially save 47K, which is more than enough for a down payment.

But from what I see on different websites showing homes for sale, you don't get much for 200K in Austin area. I'm even including the area north of Austin (Cedar Park, Rock Round, and Plfugerville). Hopefully we'll be allowed to take a bigger loan by the time we need it.

What do you, @Jeff Clawson, think it's possible to find a duplex where the part that we'll be living in has 3 bedrooms for 200K? Does that seem realistic?

Hey BP members!

In this article Brandon advise to buy a duplex instead of a single family home if I want to avoid loosing money, and earn money on the property. Is it really that bad an idea to buy a home?

http://realestateinyourtwenties.com/bAlog/your-first-investment-property-should-be/

My wife and I are living in Denmar, Europe, where I'm from. My wife is from Houston, TX. We are soon moving to Austin, TX, and just started to pay off school loan and save up for a downpayment for our dream home, which can take anything from 3-5 years. With a kid on it's way and hopefully a few more to come we need space. We have never bought a home before, but we thought it would be a smart move to buy a cheaper home (170K) in Austin, TX, instead of renting all the time we are saving up to buy a 300K home.

So what I'm trying to figure out is, if it would be smartest to rent for 5 years (and through money out of the window), or buy enable to potentially avoid to loose money to a renter while paying off school loans and save for downpayment. We're not (my wife isn't) much for the duplex idea.

I hope I make myself clear enough. English isn't my native language, so it can be difficult to explain myself sometimes.

We'll stay updated with the area north of Austin, TX. Thanks Brian.

You're right Brian. I have no interest to live in a area with bad reputation just to get a home that fits my budget, then I rather wait until I can afford to buy a home in a better area. So far it seems like the areas north of Austin will fit our budget. Peter might be right about it being far away from Austin, but if that's what we can afford then that's our option. I hear good about Round Rock and Cedar Park, and I've just recently discovered a new area in between Round Rock and Austin called Milwood that I'll keep an eye on. East Austin (78754) also seems affordable. South Austin might be too expensive, and I guess we'll stay away from the south east.

Now I just can't wait til we arrive and experience Austin on our own.

Thanks Jon, I'll check out that area. I just found some great prices on some homes in the area of Bluff Spring (78744). Do you know about this area?