All Forum Posts by: Stephen Stokes

@Jim Piety glad it worked out. It is a normal occurrence that home inspectors and others will recommend a structural engineer when what you really need is a good foundation guy to take readings and determine if shoring up is necessary.  

 Agreed, exactly why I referred him to my foundation guy!

How many doors did you knock on in addition to the one that led to the aforementioned deal? Also, do you mind sharing the bullets of your pitch to the seller on financing?

I will ping you with a recommendation as I don’t think BP likes when we post references here.

@Lexi Teifke sorry but your husband is not my cup of tea

look forward to it!

Sorry for the long post but I am 32 years old and looking for some advice on next moves. 

I currently have 6 doors; 5 rental 1 primary:

-$280K single family home in North East Austin with $177K loan balance, cash flow $250/mo acquired in 2011. This was my first home and house hacked with 3 roommates. Current rate is 3.875% on 20 year amortization. Property has been rented out since 2016 so could sell this year and avoid capital gains (lived in as primary residence 2 of last 5 years). I could make a few cosmetic improvements and sell for $300k. The area is seeing high appreciation rates so may not be the best strategy to sell. Home is also relatively new as it was built in 2010.

- $400K duplex in South Austin with $365K loan balance, cash flow neutral acquired in 2018 (FHA loan) which would cash flow about $250 / month if I paid down the note and refinanced to avoid PMI and lower the loan amount. Current rate is 4.25% on 30 year amortization. There are some cosmetic improvements I can also make next year to raise the rents further.

-$420K duplex in South Austin with $231K loan balance, cash flow $800/mo acquired in 2017 (originally HML but refi to investment loan) which I did an extensive remodel inside and out. Current rate is 4.375% on 20 year amortization. Only remaining improvement is new HVAC on one side ($4K) and waiting until current system causes an issue to replace (10+ years old).

-$500K condo in Downtown Austin with $344K loan balance would cash flow -$400 if rented but currently used as primary residence. Acquired in 2016, current rate is 3.875% with conventional 30 year amortization. The property suits my lifestyle perfectly and is just right size and location for me despite the high monthly expense. 

Looking forward, I do not have capital at the moment to purchase another property but want to focus on acquiring more duplexes in Austin area. I will now need at least 25% down payment or find another screaming hot deal and go in with HML or private money. However, finding deals has become very difficult with the hot market of Austin, especially duplexes. I do have a good cash reserve of ~$80K and have other retirement accounts but do not want to tap into any of them to avoid taking on too much risk. I am currently full time corporate employee making good salary and contributing maximums to retirement accounts. My goal is to grow the rental business so I do not have to rely on the W-2 income in the near future (3-5 years out).

For the seasoned pros out there, what advice do you have to provide as to next steps for my rental business endeavors?

@Robert Tinker

I am a buy and gold investor in Austin. Finding cash flow opportunities requires value add opportunity. Don’t expect to get cash flow without putting some work into the property.

“Rents for one-bedroom apartments averaged $1,128 a month, while two-bedroom units averaged $1,421 a month, Heimsath said”

That right there is a great stat to keep up with as benchmark! 

 Struggle is finding someone that is reliable, knowledgeable with competitive costs.