All Forum Posts by: Joe Scaparra

Mahalo @Nirvana Mortell.  I lived in Hawaii for 5 years back in the early 90's.  Since you're coming from HI and CA you will still think property values are  reasonable here.  That is probably a good thing for you as us Texas investors are more hesitant to pull the trigger with these prices.  Since you are coming to Austin I think finding a property that you can cashflow somewhat would be a great thing.  Most who know me will tell you I would recommend looking for a small multi-family (duplex works well) would serve you nicely.  

I am neither a real estate agent or mortgage lender.  However, I am a grey hair old fart with a fair amount of real estate experience.  If you get in town and would like to meet, just look me up.  Dripping Springs is an excellent community but has little multi-family to choose from.  I live in Bee Cave just a little bit away from there.  Cheers.  Joe

@Sai Kiran a couple things seem off on this video.  It is produced by Reventure Consulting firm but it is a talking head that says he lives in Austin but never ID's himself.  Could it be you Sai or a friend to get some click.  LOL, just kidding but it came to mind.  Ok so his premiss is rents are lagging behind prices and this is going to cause a crash.   Ok so what if we see a big surge in rents that shore up the gap!  I own or manage 14 rental units in the Austin MSA and just this year I began raising my rents, mostly because I have had a few turnovers that I normally don't have.  I still am below market rents.  But rest assured, rents are rising at a steep incline in Austin.  

When prognosticators start spewing headline grabbing forecasts, remember this:  Even a broken clock is right twice a day!!!

Don't get me wrong, I too think there is going to be a housing correction.  I can't tell you when but rest assured just like rain or shine it will come.  I don't think Austin will be leading the charge but no doubt it will be affected to some degree.  Our monetary policy and nation's debt level will probably be a contributing factor to the downturn.  

So as an investor what are you to do.  Sit on the sideline or look for a better market, or do nothing.  Here is my advice.  Keep learning and probing, and make an investment!  JUST DON"T OVER EXTEND YOURSELF.  Walk before you run, experience is a good teacher.  Slow and steady wins the race, just ask the turtle.  Cheers!

@Nathan Gesner,  I don't mean to be a pain in the ***, but your logic makes no sense.  Your assumption one of the renters brought in the bed bugs.  Ok, I can go with that as we can most likely eliminate the Landlord did not bring them in.  Check!   Ok, BUT which renter brought them in.  Hey by your logic both did because they travel for work.  OH REALLY!  So all tenants who travel for work have bed bugs?  Now even if one of the tenants KNOWS he/she brought them in, unless they confess, where are you going to place the liability.  THE LANDLORD.  The landlord placed the tenant in the room.  If it was just a one room dwelling then YES I am with you the tenant is responsible.  BUT until you can ACCURATELY place blame on which tenant: the LANDLORD is responsible.  I will take this one step further.  Say only one tenant traveled for work.  OH, by your logic YOU got your man, its the one who travels for work.  Hey anyone out there have tenants who got bed bugs but don't travel for work............how does that happen?   You can get bed bugs from an overnight stay at someones house, hotel, or sitting on someones couch.  Again, I can probably buy that one of the tenants most likely brought them in but short of hard evidence of which tenant; the LANDLORD is responsible.  Cheers.

@Ethan Wicks, Possibly.  If it is considered repairs absolutely.  If it is renovations you would want to discuss it with your tenants and get them to buy into the rehab.  You may have to make some concessions if it becomes a big inconvenience to them.    If the repairs/rehab is on the exterior I would think you would have little issues to get that work done.

@David Quinn, good luck with this one.  It is obvious by your post that you don't have much experience with bedbugs.  This one should scare the hell out of you, as bedbugs are very difficult to get rid of.  You just can't treat the individual rooms but the entire home to be effective.  

Your situation is complicated because you rent out by the room.  You are liable to the others tenants for each renter you place in the unit. As you alluded to it is impossible to determine fault so therefore you assume the liability.  I don't rent by the room so it is easy for me.  If they didn't have bedbugs when they move in they own the infestation.  They also pay to get rid of them too.  Like you said the unit is going to get treated when they are gone, but bedbugs are into everything including their belongs that they may take with them.  Even if you get them out of the unit they may bring them right back with their suitcase/clothes when they come back.  Since they are in both bedroom, they probably are in the couch and even in appliances in the house.  Generally you treat the unit with high heat to kill them all and it is not cheap to get the correct treatment.  

@Kole Moore let me pivot slightly with your question and add something that I think you should consider. Since you are getting a Civil Engineer degree you should be able to find a stable, good income job. If that happens to be in Austin, using your VA loan and buying a duplex is a great option to start your investment journey. @Jordan Moorhead mentioned HOUSE HACKING can work in Austin.  You will still be somewhat negative cash flow but you will also be living in Austin cheaper than people renting.  You will also be in the market participating in Austin's appreciation.  If that interest you, Jordan is doing that very thing now!  Pick his brain as I am sure he can give you some good insight and expectations.  

At the moment, some sort of house hacking strategy is in my opinion the best route to take, especially as a new investor in real estate.  Cheers.  

@Stephen Stokes WoW!  Good job! Tell us about the property you are closing on that meets those data points.  Property your closing on is positive cash flow, no money down, not even the closing cost!  I am impressed and anxious to hear the details.  Your first post on this thread tells the investor he has to put down at least 30% to cash flow, yet now you challenge me and basically saying that no the down payment is not that important?  A little confusing here.

The OP is thinking about moving to Austin.  Why?  My guess it because he is hearing about the investment opportunities in Austin.  Sounds like he is flexible and can move anywhere.  I don't know the complete details but sounds like the driving force to move is real estate, not a job or family move.  With that and the parameters he outlined, I would hate to mis-lead him in moving to Austin only to not find what he is looking for.  Just keeping this discussion in focus.  Cheers.

@Stephen Stokes Right on brother, prove me wrong.  In all of the Austin proper do I think that there is a Unicorn out there.  Yeah probably, maybe, ok certainly so.  When absolutes are used they usually are not TOTALLY correct.  If you are going to make your living finding unicorns good luck.  

Again don't miss my message. Long term, short term, mid term is not the discussion from the OP. I will continue to narrow this to the data points given in the 1st post. VA loan, sufficient cash flow, Austin. Go find me that property that fits those data points. Ready set GO!! Cheers.

@Cecile Silver since you lived in the home for 2 years out of the last 5 years you are able to receive tax free gains up to $500,000 since you are married.  It doesn't  matter that you rented the house out for 9 months.  So you now do not have any capital gains to declare.   

@Tyler Harrel  Also living in Florida has no bearing as FL is a state tax free state.

Ok lets call a spade a spade, shall we. Let's begin by answering the OPs question by using the DATA he has given us. Start with two keys in his post. VA LOAN and create sufficient CASH FLOW!

VA LOAN......NO! NOT IN AUSTIN and NO on SUFFICIENT CASH FLOW!!!!!

Why do I say this. The advantage of a VA loan is ZERO downpayment!!!!!! In Austin, zero down gets you VERY NEGATIVE CASH FLOW! Yes, anyone out there want to argue this??????? If you have 20-30% down then you aren't using a VA loan. My bet, a VA loan is being used because there is no 20-30% to put down. No problem....Austin is just not your best bet!

Now don't go changing the data.  Austin may be a GREAT place to invest, just not for Cash Flow at zero down.  Yeah if you have no problem with holding long term, I think Austin will be a good capital appreciation play.  But if everyone has no problem with holding long term then we would never have any foreclosures would we.  Cheers.