All Forum Posts by: Chris Schorre

Hi Aaron,

 An interesting topic. I've always wondered how much of an "incentive" these tax breaks really are to corporations. Tesla, as you note, received $46.4MM in tax breaks from Del Valle but is that what really attracted them to Austin for their $1+ billion facility? If they had not been offered the incentive would they have gone elsewhere? I am suspicious of the idea that the tax break is the driving factor for a company to consider Austin. If that were the case the companies would post an RFP on their website and let all states and counties participate in an auction of sorts. Of course, no companies do that because their primary focus is the local labor pool, proximity to customers/suppliers, educational system and so on. So my personal feeling is that companies often dangle the idea that they might go elsewhere to get more incentives (who wouldn't use that negotiation tactic?) when the decision has mostly been made internally. I am not an economist and have no background in how incentives work but I don't think letting Chapter 313 incentives lapse will take Austin off the table for many companies who see the myriad other benefits the Austin metro offers. 

It's an interesting model but risky for buyers in my opinion. Since the owner has (presumably) no control over rental rates or marketing of their individual unit, what happens if occupancy is well below projections and they decide to sell because it is losing money every month? It seems any new buyer would want to see the numbers and they would not tell a good story. Of course, it could work out on the plus side as well. I hope it succeeds. 

@Dave Foster thanks very much for sharing your insights.

Hi everyone, looking for some insight on 1031 exchanges. Here's the scenario and facts. 

I own a piece of property in Austin and have for more than 5 years. It is my homestead and I have lived in it for all five years. The property has $500K+ in equity. I plan to tear down the existing structure and build a duplex. Once completed I would like to retain Unit A as my homestead and sell Unit B. Do I need to hold Unit B for a certain period of time before doing a 1031 exchange? I understand many of the other IRS tax requirements associated with 1031 exchanges but this particular issue in unclear to me. I will, of course, talk to my CPA about this but curious to hear thoughts from people knowledgeable about this topic. 

Hi everyone thanks for the replies. I am optimistic about the long term viability of this technology and chose to invest a mere 50 bucks as a way to learn about NFTs new rather than instantly dismiss it as fraud or fad. Will it catch on for real estate? Nobody knows but it sure will be fun to watch.  

Many of you probably have heard about Beeple selling a piece of digital artwork for $69 million recently. This was done using Non-Fungible Tokens (NFT). Recently I received an offer to purchase fractional ownership in a property in Memphis from a startup called Lofty AI. Being interested in new technology, I decided to test the waters and purchased 1 NFT worth $50. So, theoretically I now own a $50 share of a single family house in Memphis. This technology is in its infancy for use in real estate but I think it will really take off due to the security of the transactions and ease of investing. Thoughts on this? Pros? Cons?

I'm sure you know this but aside from the type 2 issue with the COA, you'll want to first check if the condo assn for the building even allows short term rentals. 

Hi everyone, I was just speaking to a mortgage broker and he revealed some chilling news that was released on March 10 by Fannie Mae (Google Lender Letter LL-2021-08.) As a condition of bringing Fannie Mae back to its pre-2008 operational status, the US government is requiring Fannie Mae to reduce the percentage of single family loans secured by investment and second home properties to 7%. I am told that it's around 9% now. This change takes effect on April 1, 2021 and my mortgage broker said he expects interest rates on these types of loans to spike by 1% or more. That would obviously be a huge blow to the 1 to 4 investment property market. Has anyone else heard about this and been "rubbing their crystal ball" to speculate what might happen post-April 1? 

Thanks for the reply @Nina Hayden. I have found various tools but will likely build my own with some specifics to Austin. Gotta love Excel... 

Hi everyone, I realize it only takes a quick web search to find online tools for analyzing real estate. I've seen many from DealCheck, Roofstock, BP, etc. However, I am curious which ones fellow investors find to be the most thorough and useful.