All Forum Posts by: Kelby K.

Try talking with Bo Harvel from Maximus Residential.

Great post Scott. I agree that Denver and Austin are very similar. Those were the two cities we researched before moving. The only item that kept us away from Denver was that my wife doesn't like winters with snow. Haha! I told her Denver is a very mild winter but she wasn't having it :-). 

I recently moved to Austin from the San Francisco Bay Area and there are some social similarities and the tech scene connection, but I don't agree that territorial expansion is very limited here. You have the hills on the west side of town which can and are being built upon. The hills aren't exactly the pacific coast rim mountains and they aren't protected government land like in the Bay Area. Then you have Lake travis which isn't as limiting as the Pacific Ocean or the San Francisco Bay. That limited area combined with high salaries and the executives and high-level managers primary residences keeps real estate elevated. In Austin, new construction seems to continue to be built further from downtown which will gradually slow and may eventually come back closer to the center as other cities have shown. 

Growth in Austin will be steady and sustainable in my opinion. The massive appreciation returns that the Bay Area sees probably may never be available here. 

I would definitely recommend a 3 or 4plex (and living in one unit) if possible as well. This is how I started my real estate career 4 years ago. After one year of owning the 4 plex we sold it and 1031 exchanged it into a larger apartment unit and have done it another time since. 

Hey Chris, we recently moved from San Jose to Austin TX for what sounds like some of the same reasons you may be looking for; hot and comparatively low-cost real estate market, great public schools, lower cost of living, etc. Austin fits our personalities much better as people are very friendly, extremely helpful, and they are genuinely happy and proud to live here. It is so refreshing to be a part of this culture.  My father was military as well and that seems to lend adaptability in any envirinment so I'm completely sure you'd enjoy it here and put roots down as quickly as you'd like.

There are a few items that northern CA has on Austin; more available fresh produce, more available and quality ethnic foods (Asian especially), more ethnic diversity (mostly Caucasian), more impressive geography, and more moderate weather. Although everything is cheaper here we do have to drive further to get it; granted we did move to the suburbs (for the fantastic schools) and if we lived near downtown it would be a different story.  

Our real estate strategy upon leaving California was this;

Cash-out refi an investment property and use that money as a down payment to purchase our primary home (called "second home" by the lender as we were living in a primary residence in CA at the time).

After living in Austin and doing research on the market we then sold the investment property that we refi'd and 1031 exchanged it for multiple properties. It literally is unbelievable what we acquired with that tear-down SFR.

Yes, property taxes are higher (almost 2X) but there's no state income tax and frankly, I would rather pay higher property tax on a house that is less than half the price when also considering the overall cost of living being so much lower (nearly half). Property taxes are still a small portion of your annual net when considering how much you are able to save here. 

I don't see why more young California families don't move this way.  It makes so much sense from a quality of life standpoint especially financially. 

70% of our traditional property investments are outside of Austin. The solid deals are few and far between nowadays and come with many others trying to do the same thing. Less acquisition friction, lower priced entry points and greater returns are found outside of Austin proper. The drawback in outer areas would be less potential for higher than normal appreciation. But if you're looking for current cash flow and future long-term appreciation (more of the traditional buy and hold approach) then outside of Austin may work well for you. 

In my experience it has also been true that having 2-3 bedroom units led to longer term tenants. The 1 bedroom units in my class C properties have more turnover than in my class B properties. I believe this is due to the type of tenants jobs in the class C properties being more apt to change/get let go. With one tenant, or a couple, if a job is lost then tenants typically leave. I wonder if class A would be the most stable or if those type of tenants would be looking to upgrade to larger units/homes at faster rates?

Also, if you have a property manager or real estate agents that get a commission on each new lease signed (customary in TX) then take that into account. 

My experience thus far has led me to believe that class B properties with 2 bedrooms is where I find the biggest financial advantage and stability.