All Forum Posts by: Christopher Sica

@Will Barnard Thank you very much. As you pointed out, the numbers are below 1%. Because they were so off, I felt that I was either doing something wrong or the market was definitely too expensive for investment the way I have been seeing it.

It also indicates to me that there may be some deals out there worth being patient and looking out for. Obviously, because I love Austin, and want to live here, I will just keep looking and waiting for the right deal to come up. If it does, great; if not, I can always switch markets to a less pricey one near by like San Antonio or past Round Rock and just rent here in Austin.

Chris

Hey everyone!

I must be a slow learner because as I learn more and more, I find that I am more puzzled by the market here in Austin TX.

I was recently trying to use the 50% rule and the 2% rule as different ways of looking at the same duplexes here in Austin.

The average duplex here that costs around 200k only rents out for a total of 1200 for both units because they are generally in a 'worse' area and the nicer duplexes that cost around 300k only rent for about 2400 total for both units. These numbers are NO WHERE NEAR the necessary to be cash flow using the 50% rule or worthwhile investments at the 2% rule.

You the community please enlighten me as to what I may be missing. I have tried to look at the situation like the stock market. Austin is a 'growing or 'hot'' area, much like a growth stock is expected to keep growing in value. Does this mean that because of this location, I will have to pay a higher price for the same stock (read: property) than if I were buying in a less desired or popular real estate market (read: blue chip stock)?

If this is the case, it seems that I am buying more risk here than I expected unless there are people who are able to explain to me in concrete numbers that Austin will continue to grow and that my overpriced initial investment will work out in the long run.

Any advice/suggestions?

Thank you so much for hearing me out and any input will be seriously weighed and considered.

Christopher

@Andrew S. Very good point. I am only 27 so two years seems like a long time for me to be in one place but when you put it that way, its true that this is a very small part of my life. Thanks.

Chris

@Jeremiah B. Thank you for this response. @Andrew S. as well. The reason I came to the conclusion I did was because I am interested in being an owner occupant for the first year or two. Would this change your opinions at all about what you would pay for a place that your actually comfortable in?

Also, I have not yet developed the ability to see a property for what it could be, which I imagine is due to a lack of experience but we'll get there!

super thankful for everyone's input,

Christopher

@Jon Klaus My favorite area that I looked at today would be the area just south of oltorf and east of 35.

@Patrick Connell The quads seemed next to a bunch of other quads and thats not the type of area I want to be living in. I could see it being a play one I have my own residence established and I am no longer looking at living in it. Also, I am new to being a landlord so I want to start slow. I am totally fine with building wealth slowly.

Also you may be correct about the idea of a house that needs some work being a better investment, and if one becomes available in an area I would be comfortable spending my time in, I will jump on it and get the work done over a couple of months at my leisure.

chris

Wow!

I learned a lot today.

1) I am no where near ready for a fourplex. They are officially off my radar for the first couple years of my RE portfolio.

2) I wan to spend around 300k for a duplex in Austin, within 10 minutes of downtown.

3) I am not 100% sure I want to do a live in duplex. Because of my career, I might prefer to rent out both units and live in a seperate Short term apartment giving me more flexibility if I need to relocate for a few months for work.

4) I wan to find a place that has a wow factor. A place that when I first see it, I say, Wow, I could live here. That is going to make it way easier to rent, to keep rented, an also if i choose to move in, I will enjoy that option and won't might paying the rent myself to do so.

Just my updates and thoughts for today!

Chris

@Account Closed & @Patrick Connell

Thank you guys. I am always trying to do way more than I should so this is great advice. I will do 4 properties today and let her guide me through the process and see how it goes and then go back home and run numbers for a bit.

thanks again guys!

chris

Tomorrow, I am going on my first tour of about 15 properties (duplexes) her and I have picked out of the last few weeks here in Austin. We are going to spend a few hours driving around and looking at the properties and asking her questions about them.

Do you have any advice about what questions to ask her about the houses specifically, and what to look for and how to go about assessing a house when we are walking around it, in it, driving to and from it?

Thanks @Gunnar Teltow I am doing a lot of searching and an probably going to do a Live-In Duplex hopefully in an area surrounded by SFH's. thats the only way I will be able to pull some cash flow down here. Also, I really love Austin and am not ready to be a long distance landlord yet.

I am struggling with this idea as well.

I am really interested in a multifamily but I have heard so man people talk about doing multiple less expensive properties and using bank money instead of my own. Its very confusing trying to figure out which to choose.