All Forum Posts by: Scott Pollard

@Aysia Lopez I would inspect the heck out of the homes in that area as most are in severe disrepair and many have a lot of additions/garage conversions that are not properly permitted that could cause serious issues in the future. If I was going for a long term buy hold in that area I might even consider building a new home and an ADU and renting those out so you have a fresh start and know the condition of the home is A+. Not ideal if you're trying to get in as cheap as possible but I would have serious concerns of the longevity of homes in that area.

I would agree with @Kris Wong on this one. It's close in proximity to downtown which will only continue to build out. It's still a run-down area as of right now but that may mean there is an opportunity to buy lower and take in a healthy amount of appreciation. @Aysia Lopez As for a buy and hold, would you be looking to buy a newly developed home and hold it, or buy and older existing home and repair? Sellers in this area are wise to the Austin market and are asking higher than market values.

@Nicolaas W. The means in which you buy it doesn't matter. The price at which you buy does. The strategies you're talking about are just options for individuals with limited COH to help them get into an investment. I don't see how those would be considered more cash flow friendly. 

@Nicolaas W.

@Nicolaas W. 

The Austin market is the one that dictates that. If you can buy something that will cash flow enough to make it a viable option then by all means do. I would urge you to re-evaluate your numbers as I haven't seen much, if anything in this town that would allow you to cover a 1% much less the touted 2% rule here. I think the buy/hold strategy in this moment in this town is buying at the higher end of the market. Speculating here but I think short term investments are better while you can get high prices while there are buyers and when the correction comes, you can buy low, rent to those who cant buy and at this point, cash flow.

There are of course exceptions to what I have seen but I believe that they're just that. Exceptions.

It's a great opportunity if you buy them at the right price. Otherwise you're overpaying... I know, it sounds dumb and self explanatory but if you overpay for the acquisition you're going to get hurt when the market turns or if you don't account for cap-ex which will occur. If your contact is truly an investor, they should understand where another investor will need to buy the assets. 

I would expect a relatively sizable discount to buy the entire portfolio. If she wants the top end price, she should sell the retail route. Think of it as you're providing her a service by making it quick and easy.

Hopefully this will help you gain some negotiating power

@Kevin Kelliher, The existing house is worth $203K? I'll take it if this is true and feasible to move. If you're planning on tearing it down, to me the home is worth a negative value as you'll be paying to tear it down/ permitting and holding costs to get started building something new. FYI, depending on the age of the home and if there is any historic districts nearby, COA is going to be a beast to go through to obtain permitting to move or tear-down the home as it will likely sent to the historic review board which is notorious for postponing decisions for month on end for no apparent reason (this happened to me). Also, even if your zoning complies with city regulations you should check your schedule B docs/ deed restrictions on title commitment  to see if the allow a duplex to be built.

This is a large undertaking for a #1 project but if the numbers work then go for it. Just make sure you're confident in the process.

Best of luck!

I think you have to determine what your expectations are. Do you just want the properties listed, or do you want to have the agent hold open houses for each? There are plenty of agents that will give you a discount for multiple properties but If it came down to it, wouldn't cut corners trying to save 1% on properties that need a lot of assistance. However, if you're confident in the properties selling themselves without much help, I would look for someone that would list it at a discount.

One of my partners would be able to list this at a discount for you if you need someone but he would be relatively hands off. Feel free to reach out if you're interested. 

Best of luck,

That's very subjective. I would say that you find a market that interests you and learn that market inside and out. Within each of those markets is a hyper-local sub-market that can differ from the general area. I believe it's too broad to say one entire city over another vs. specific areas in each. Either learn as much as you can about one or if you have time, multiple, or set yourself up with people in each that are very familiar with each area and sub-markets that can identify opportunities. 

I'm in Austin and would say if you're looking to cash flow, this would not be the right place.

I don't see it being overvalued. Sure some areas are having price drops consistently but I think it's due more to unrealistic expectations of sellers and ignorance on the agents part to understand the property's true value. Most agents here will list 20k+ over what the property is worth hoping someone will bite.

If you fully understand your strategy there should be minimal risk. It doesn't matter the market, there are always deals and always someone killing it. You just have to be willing to put in the time and effort.