All Forum Posts by: Jacob Pereira

Hey Ryan, I ended up using my VA loan on a duplex here in Austin, but I wish I'd had the foresight to go straight into a fourplex like you're doing. Be aware, the 2-4 unit market is really hot in Texas right now, so it might be tough to time it right. Happy to answer any questions you might have.

@Account Closed or myself and we'll be happy to let you know what it's worth, no strings attached (actually, I can't say that for certain with Jordan, but I'd be surprised if he wasn't willing to). All that said, appraisers are known to use strange methods such as sacrificing goats and reading smoke signals to get their final appraisal numbers, so there's always a risk that even if your house is worth a lot more the appraisal doesn't come in. Jordan, back me up on this.

As far as your next property is concerned, you don't really need that much down if you plan to owner occupy, but as mentioned above your DTI could become an issue. At 100k income with 222k in debt you might be okay, but that's dependent on a lot of other factors including your other debt, your next home price, etc. Reach out to your current lender if you liked them, or to @Jarred Sleeth if you didn't and they could tell you very quickly what you can afford.

Jordan and Jarred, sorry for offering up your services for free without asking you, but who knows? It might translate into business for you.

As an investor and Realtor in Austin, the trend has been great for me personally. I'll say that my anecdotal (read: almost meaningless) evidence says something slightly different. About 37% of my clientele who actually purchased last year was from California, and almost all of them were buying in Austin, but staying put in California. In contrast, about 16% or my buyers were from New York, and half of them moved here.

Small sample size, of course, and I'm absolutely bullish on the local market. We have a very diversified economy with tech, government, education, medical, and service/tourism (yes, service/tourism is hurting right now, but post-vaccine I expect it to spring back), so we're a fairly safe bet despite the current hot market. All that said, most of my California clients are staying put, just putting their money into safer states.

@Account Closed on this one, but my suspicion is that either he or I are misunderstanding your question. Are you looking to put a HELOC on your primary for investment purposes, or are you looking to put a HELOC on an investment property. If it's the former, it's not hard to find in Austin, if it's the latter, Nicholas is 100% correct. Either way, the website you're asking for doesn't exist, as far as I know.

If you give a bit more detail about your situation and what you're trying to do we can give more accurate information. A lot of lender issues are caught up in regulation, and minor differences in what you're doing can have major rate and eligibility implications.

Hey Manju,

You'll likely see a number of us agents on BP who specialize in investor properties. I myself own 16 units, mostly in 2-4 unit buildings. I believe @Jordan Moorhead, @Ryan Kelly, and @Neil Narayan, are also investor/agents. Reach out to one of them and they can help you out.

I will tell you that my out of state commercial clients have had a really hard time finding commercial lenders for smaller deals like the ones you're describing. As far as property managers go, I only know ones for the Austin market. DO you already have something under contract?

I've always hated the 1% rule, although I think it's genius. It's something everyone can understand and it's super easy to implement. The problem with almost any easy get rich quick scheme is that they don't work, and this one fits that bill.

Rather than looking at a simple rule like that, look at it this way; can you add value to the property you're looking to buy, and if so, can you add enough value that your returns (including your own time spent on it) beat a common benchmark like the S&P? I realize that's still a simplistic description, but I think once you try to do the math you might realize it's more complex than it initially seems. Make sure you factor in capital costs, tax implications, depreciation, insurance, risk, etc.

The conclusion I came to was that Austin is still a great market to buy in, but that's not necessarily the one you'll come to.  

Nope, just leave the deals to the rest of us.

Kidding, of course. We're still a fairly cheap market. It's really hard to give tips without knowing the specifics of your situation, so I'll just give some generic ones to start:

Figure out what value you can/are willing to add. Real estate investing is a much more active form of investing than stocks, but if you can figure out your personal advantages, it can also be more lucrative.

Be aggressive, persistent, and active. Yes, we have properties that get 20-96 offers (it's real, look it up), but that's generally because the agent undervalued the property when listing. Look at properties that have been on the market for a long time and offer a price that reflects its true value. You and your agent might experience some rejection, but you might also hit a goldmine. As a side note, I had one of my clients bid $445 on a property listed at $520 and it was accepted. Even better, we talked them down another $5k during option.

Be willing to look on the outskirts. There are still properties that are cashflow positive or close to it in the Austin suburbs of Round Rock, Del Valle, Cedar Park, etc.

People told me I missed the boat when I bought my first duplex in 2013-14. I think I can confidently say now that they were wrong. Nobody knows for certain what the future will bring, but I can tell you that for now the Austin fundamentals appear to be strong.

Good luck!

I love the question, but markets are pretty efficient these days. Unless you can add value (subdividing was mentioned in a response above), you're still likely better off in the stock market. 

@Ravi Ramphal, a good friend of mine is find of saying, "you can't swing a dead cat in this town (Austin) without hitting a Realtor or massage therapist," and he's not far off. That said, the median Realtor sells one house a year. ONE! In other words, yes there are a lot of people in it, but most of them are playing real estate, not working it.

On a side note, I thought I would be one of them. I make a comfortable living off of my rentals and only got my license so I would have access to detailed MLS data, so I never marketed myself as an agent. But through word of mouth and an occasional out of the blue investor client, my Realtor income is actually starting to beat my landlord income. Long story short, if you're consistent, competent, and committed, you WILL do well in RE.