All Forum Posts by: Scott Sutherland

For airbnb furniture, look for sturdy items. Example, we stopped buying barstools that have nuts and bolts to tighten and switched to a single piece metal design. We also switched to one-piece toilets to eliminate leaks at the tank to bowl seal. 

Welcome to Austin Timmy. Austin is a hot market but don't let that discourage you. There are some areas within 10 minutes of downtown and your office that sell for $250k SFR and $350k duplex. (78741, 78744, 78745,) I'm a big fan of the FHA duplex/Airbnb strategy. That's how my wife and I got started in 2011. We still own that duplex (and a few more) today.

The Airbnb returns are still solid in Austin. Occupancy is high year round. There's always something happening in Austin that drives folks to visit.  Regarding regulations......the city is still planning to eliminate all Type 2 (investor) licenses in 2022 which will drive some folks out of the market and cause others to go underground. Currently 70% of the Airbnb's operating in Austin are unlicensed since the city is no longer offering Type 2 licenses. 

However, I'm not aware of any plans to eliminate the Type 1 (owner occupied) licenses so that should be an advantage for those owners if/when the remaining Type 2 licenses are eliminated.  Personally, we plan to shift our properties more to 30+ day rental which does not require a license. 

I'm a residential broker focused on investors and could refer you to some lenders and contractors as well. 

@Mike Murphy I used mysolo401k.com to setup our company's self directed 401k account  

I also setup a self directed roth IRA through iraservices.com

I was also with Quest for awhile

I've been very pleased with mysolo401k and iraservices

Quest didn't work well for me since they held onto the funds and didn't allow checkbook control. Not flexible enough for my needs (paying contractors quickly and courthouse steps purchases). Also, I felt more comfortable with the money in Wells Fargo as opposed to having Quest hold it. 

I did one courthouse step deal with the roth and purchased a duplex with the 401k.  The duplex was banged up and wouldn't qualify for financing. Purchased cash for $147k. Invested $16k into rehab. Today (4 years later) it's worth $300k. 

You bet @Edwin L.

@Dalton Zwart regarding the house hacking. My favorite strategy is the 3.5% down FHA duplex purchase. Live on one side and vacation rent the other side. The city of Austin has stopped issuing type 2 (investor) licenses but will still issue type 1 (owner occupied) so you should be able to operate the other side of the duplex legally as a vacation rental. For additional income you could always take on roomates or rent out rooms on your side of the duplex.

Another tip....look for small duplex pockets surrounded by single family homes. Avoid areas where the entire street or subdivision is duplexes or worse yet....fourplexes. You want to make sure your neighbors are lifting you up, not dragging you down.

Another benefit of duplexes.....in Texas you can convert a duplex into two condos. This allows for an additional exit strategy when you ultimately decide to sell. 

@Edwin L. the short answer is no. Long term rentals in town are closer to .7% of purchase price per month. You mentioned ARV which would account for some sweat equity improvement and also perhaps an under-rented property. Those situations help but Austin is largely an appreciation play at this point. Most entry-level single family homes and duplexes are priced such that they will just cover the monthly payment, repairs, and property management with 25% down. Over time, cash flows should increase but immediate cash flows in Austin typically requires house hacking or short term rental. AKA, additional work.

You should be able to find a duplex near the domain for $400kish and short term rent the other side. We're getting roughly $40k per side in gross rents for 2 bedroom STRs and $45k per side for 3 bedroom STRs in similar Austin neighborhoods. Most of ours are duplexes as well. You need to account for utilities, cleaning and furnishings but it still should be more profitable than a traditional 12 month (long term) lease. We've also had good luck with mid-term (30 day+) rentals from corporate renters, snowbirds, etc. 

@Mark Nolan, isn't the loan already non-recourse to the buyer (ira) since it's in the name of the seller? I wanted to clarify your comment that the loan "needs to be converted" since I was thinking of doing something similar.

We have 7 residential lots for sale near Braker and I-35 in Austin. Each lot approximately 1/4 acre. City utilities available. No flood plain. 5 SF3 lots in a row. 2 more SF2 lot across the street. Great opportunity to build houses or duplexes. $95K each. Or buy them all at a discounted price. Email for details. [email protected]

My partners and I have 16 lots near Braker Lane along the southbound I-35 service road. 9 commercial lots appx 2.5 acres and 7 residential lots appx 2 acres. We're looking for a cash buyer willing to pick up as many of the commercial lots (zoned LR) as possible and double close with us. We're interested in holding the residential lots for future sale/development, but for the right price we'd let them all go. Commercial lots are priced below market at roughly $95K per .3 acre lot for volume purchase (7 units or more). The buyer we select will be a cash buyer with interest in purchasing the most lots to minimize our cash outlay for the remaining lots. Email me directly if you'd like more details. [email protected]

Scott Sutherland, Broker

RealtyStake LLC