All Forum Posts by: David Ivy

@David Sray

Did you end up buying the home? What did you find out?

@Jim Robertson

In my experience, the best banks for everyday business checking and savings are usually not the best banks for building a commercial lending relationship. We use Frost for our business checking and savings. I agree with @Carrie Hiner that UFCU is a good option too.

However, when it comes to commercial lending, you want a local bank that offers competitive terms, moves very quickly, and takes the time to understand the particular investment or deal you're purchasing. I've found that Frost and other huge regional banks are more risk-averse and, thus, offer less competitive terms. The internal bureaucracy and lending procedures in place at such banks tend to bog everything down on all but the most vanilla and straight forward deals. They also tend to have very rigid and generic underwriting requirements that prevent them from considering many factors you may think relevant to your particular deal or situation. This is what I've found at Frost, though they're still great for my business checking and savings needs. I haven't dealt with UFCU in this capacity. However, they had trouble on a mortgage for my personal home that a smaller local lender handled with ease.

I recommend you meet with a few local commercial lenders. You'll see just how different they can be, even when looking at the same deal. Broadway Bank, Sage Capital Bank, and Southside Bank are all a good start. I can put you in touch with the Austin President of Broadway and the local VP of Commercial Lending at Sage and Southside. Let me know if you'd like an introduction.

@Kelli Thomas

I'm happy to have the team leader at KW Bothell reach out to you. He can help you with any questions. If you're interested, just send me an email. You can find it on my profile page.

@Austin Youmans

The same offer goes to to you, if haven't already reached out to the KW market centers in your area.

@Nicholette Menzel

Welcome to BP! You're right that the Austin buy and hold market is tough at the moment. Things are currently pretty much the same in the suburbs. Click on my profile and read some of my recent posts about the Austin market.

How did you find your current rental?

@Account Closed

Hi Jim! Your assessment of the buy and hold market in Round Rock is spot on. Five years ago, the median SFR in Round Rock sold for $176,950 and rented for $1,300. That's a 0.73% rent-to-value. Now, the median SFR sells for $260,000 and rents for $1,600. That's a 0.61% rent-to-value.

So, over the last five years, the median Round Rock SFR has appreciated 47%, while the median rent has appreciated 23%. The median home price has outpaced median rent by a factor of two. Rent-to-value in Round Rock has decreased 20% in the same period.

@Ethan Anderson

The best way to get clean historical data on Austin's real estate market is though the Austin MLS. However, you need to be a member of the Austin Board of Realtors to access it. I'm happy to pull whatever stats you'd like. The stats available are just about as fine-grained as you could want. Let me know what you'd like to see in particular.

You asked about seasonality. As an example, here is a chart of SFR sales volume by month over the past 5 years in Austin:

Here's the raw data for the above chart:

Let me know what else you'd like to see.

@Ethan Anderson

Hello! I am an investor and Realtor in Austin. I have single family and residential multifamily property in Austin and elsewhere in Central Texas.

The Austin market is very tough right now for cash-flow seeking investors. Over the past 12 months, the median single family home in Austin sold for $181/sqft. at a price of $359,000 and rented for $1,850/mo. That's a paltry 0.52% rent-to-value. Don't expect to find a single family home on the MLS or from a wholesaler in Austin that cash flows, unless you're paying all cash or otherwise putting down a hefty down payment. If you do happen to find something initially attractive, it's guaranteed to have multiple offers or bidders. 

Most cash-flow seeking SFR investors in Austin are on the sidelines or working in other Texas markets for the time being. Of course, people still find unicorns, but those people are generally doing their own marketing and sourcing for properties. Even then, nearly all "distressed" homeowners are so above water with their equity that they can get out of any trouble by retailing their property on the MLS and getting it sold quickly with multiple offers.

The residential multi-family market in Austin is better with respect to cash flow. However, the tremendous appreciation here has affected the multi-family market as well. The median duplex in Austin sells for around $160/sqft. at a price of $304,500 and rents for $1,337/mo. per side ($2,674 gross). That's a 0.88% rent-to-value, which is great compared to the Austin SFR market. It's still far from exciting. Nevertheless, there is more opportunity here for a wholesaler to snag you something worthwhile or for you to find something decent on the MLS.

As an out-of-state investor, having family in Austin will be an advantage. However, it's important to have someone in the local market who can help you examine potential deals and represent you when it comes time to submit and negotiate offers. In particular, never take a wholesaler's word for it when it comes to whether a deal makes financial sense. You have to be able to perform your own due diligence, or have someone else on the ground to do the work.

Please reach out if there's anything I can do for you!

@Alok Jain

Welcome to BP! I'd be very interested to hear about your experience owning multifamily in Austin as an out-of-state investor. When did you begin investing in Austin?

@Jonathon Martineau

I second @Ben Biggs's suggestion to check out Keller Williams. As a new agent, you need a brokerage who will, first, teach you what it takes to be a successful agent in your market and, second, hold you accountable on a daily basis. KW is fantastic at both. As far as who you should reach out to, I'm happy to have one of the market center team leaders with KW in San Diego reach out to you. Just say the word!

@Jim Jennings

Welcome to the Austin investment community! At the moment, the Austin market is very challenging, even for experienced investors. You can learn a great deal here on BP, but nothing beats networking and learning face-to-face with investors here on the ground. I recommend you check out these meetups:

• http://www.meetup.com/Investor-Underground/
• http://www.meetup.com/REALESTATEinvestormasterminds/
• https://www.meetup.com/texas-real-estate-Investment-Education-Training-Networking/

Feel free to reach out with anything you need. I'm always happy to meet and talk investing in Austin!