All Forum Posts by: Timmy Fritz

Wanted to see what everyone's thoughts were on the new proposed land development code for Austin, TX. How do you think this will impact the local economy... Do you think this will impact housing/rental prices significantly? Will there be an even higher uptick in building/contractor costs due to even more demand? Do you agree or disagree with what they're proposing?

I am new to Austin and I just bought my first house hack over in Riverside. But it is interesting to think about how many more potential units the proposed code would allow and what the lasting impacts might be. 

Looking forward to hearing what everyone else thinks as well.

@Michael Ablan thanks for the advice! We have not agreed on a price, as he is more focused on terms. The home is fully occupied currently, and there is nothing that needs fixed immediately. However, there are a couple capex items that'll need replaced within a few years(water heater & roof at least). I plan on tenant proofing it as the tenants move out, but the home is in fine condition for now. I'm really trying to come up with a creative way to structure the deal that would work for both of us. Unfortunately, he is asking for such a high downpayment, I'm really not sure there is a deal to be had.

@Joseph Sims thanks for the reply! Not quite, it is more than just assuming the payments. He is looking for a down payment up front(a little more than I would like), and then to carry a note on the remaining sum of the purchase price. I was thinking about assuming his payments subject-to and then offering him interest payments only or payments amortized over 30yrs without interest. I'm trying to avoid the risk of him missing any payments in doing a mortgage wrap, and then forcing the lender to dig any deeper.

Found a triplex in Louisville, KY that I like and the owner is open to financing the deal. He owes 50k on the property, and it is worth between 110-115k. The property is fully occupied & rents for 1700. He is looking to reduce his debt & invest the income from this into a start up company.

I'm familiar with the strategies of seller financing, but I have no experience in actually constructing one of these deals. I am also aware of the risk of the 'due on sale' clause & would be able to refinance into a conventional loan if the bank does call the loan due.

I'm looking for tips/advice on how someone who has experience with this type of deal would structure it. Also, I'm looking for a good recommendation for a real estate attorney in the area that has experience with doing seller financed contracts.

Any advice, experiences, etc would be greatly appreciated. Thanks!

So, I just graduated from UofL, and I knew out of college I wanted to get into real estate & house hacking was going to be the best way to do it. I just got a 4plex under contract in Louisville, KY which I was planning on house hacking. But out of the blue, just a couple days ago, I heard back from the job I wanted which was in Austin, TX and I am now moving there in June. I have spent the last several months attending local meet up groups, finding my contractor, real estate agent, property manager, and my lender. And now it seems as if I am going back to the drawing board.

I am still looking to house hack in Austin, TX and I'm looking for any recommendations for any of the above(agent, contractors, PMs, and lenders). Although I am looking at doing FHA, I am also looking for banks, HMLs, private lenders, etc. (& agents, contractor, & PMs) who work well with investors as I plan on real estate being my primary investment tool.

As far as properties in Austin, obviously prices are a bit different compared to Louisville (probably an understatement). But I am looking at staying as close to downtown as possible(no more than 5-10miles) as I'll be working on Oracle's campus just south of Lady Bird Lake and I would like to avoid too long of a commute time. I have looked into multi-families, but have also considered the idea of buying a SFR & Airbnb-ing a couple of the extra bedrooms. Any recommendations on good areas to invest, areas that do well with Airbnb, or areas to avoid in general would be great.

Also, curious on what the regulations in Austin, TX are for Airbnb. It looks like so long as it's your primary residence that you can still get licensing for Aribnb. Anyone who is currently doing this and might have any insight on the costs or time frame for getting the proper licenses or what their experience has been like with Airbnb here? Any talks of changing regulations or what the market is like for Airbnb in Austin(over saturated, competitive, etc...?) 

I know in Louisville that foreclosure auctions have become extremely competitive, is it safe to say the same for Austin, TX or are there still deals to be had at these?

I look forward to any advice/recommendations anyone might have!

@Luke Neubauer thanks for the reply!

Yes, that would be awesome if you could tell me where exactly to go to find out if it has been used as a 4plex since before 1985.

Ah, yes the 600 ft rule. I heard about it, but I guess I did not know it had already gone into effect. Where can I go to see the the already approved CUPs?

Also, what was the time-frame and cost like for getting your CUPs approved? 

Thanks,

I just got my first property under contract, which is in the Louisville, KY area. I'm using FHA to buy the property which is a 4-plex(or so I thought) on Southern Pkwy near Churchill Downs. I ran the numbers, and the property was a no brainer (with upside for using it as an AirBnB). I put in an offer quickly knowing there were already other offers on the table. We are supposed to close at the end of May, if the property meets all the contingencies of the offer... one of which was zoning.

The property was advertised (and is fully rented out) as a 4-unit. The house appears as if it is setup as a multi-family, each having own kitchen, br/ba, entry-way/exit, etc. However, after talking to the city, the house is actually zoned Residential, Single Family. So the problem is that 3 of the 4 leases go through into next year(the open one I was planning on occupying obviously).

I like the home and I am looking for ways around this, but with the property being rented out illegally what are my options? 

1.) Would I have to evict the tenants upon buying the home, since it is being rented illegally? What would this look like... 30 days notice & pay for their moving? I read somewhere that the landlord would be expected to pay 6 times the tenants monthly rent to help move... is this accurate? (this would be something I'd rather have the current owner do. Not trying to get wrapped up in a lawsuit on my first property)

2.) There are several similar homes on Southern Pkwy, very close to this house, which are zoned Multi-Family. What would the costs and the time-frame be for applying for a conditional use permit, and the likelihood that I would even get this? Could I even keep the tenants while I was waiting for approval?

Any other ideas???

@Nicholas Aiola Thanks for this awesome thread, a lot of insightful information, and definitely worth the read!

So, I've created an LLC with 2 of my long-time friends, and we are pulling our resources together to kick-start our real estate investing career. The first thing we are doing is each of us are taking out loans for primary residences on houses that we can fix up, build some sweat equity in, and rent out to our buddies with the goal being to have other people pay down our mortgage on each of these 3 properties. The idea is to use these properties and leverage the equity we build up for down payments for future investment properties together.

We currently are writing a contract to buy one of the guys mother's investment property in Louisville, and have come to terms with the purchase price of 100k with her to gift a down payment of 30k of it. 

What are the best ways to structure these homes into the LLC? Does the son she's gifting the property to need to be on the deed of the house since she's gifting equity to a family member, or how do we incorporate this home into our LLC? Do the homes we are taking primary residence loans out on need to be in our name, or can they be in the LLC's name as well? Obviously the goal is to run all of these homes through an LLC in order to protect us from a liability perspective as well as run the profits through one entity. From what I've gathered from talking to another CPA we can take multiple primary residence loans out with the LLC being on the deed of the house, so long as there are as many partners... Is this true, or did I misinterpret something? Any input you could give would be immensely helpful!

Thanks.

@Jaysen Medhurst , right but if my mother gifted me equity then I would own the home since she owns it free and clear. Would i then be able to go to a bank and leverage this home through a new loan or Heloc while making payments to her going forward? Not exactly sure the tax implications of this, or whether this is even an option. 

The neighborhood is odd: within a block radius there's a 3bed 1ba home that sold for as much as $255k within the last few months, it's very nicely renovated but actually slightly smaller than my home although the lot is a bit nicer. Another home that's a 3bed 2ba that sold for 50k within the last year or so that wasnt in great shape. It's a wide range, but the curb appeal of my 4 bed 2ba house isnt great. Exterior needs painted, paint interior, and some other small things and I think it would appraise for around $115k pretty conservatively.

Situation: Looking for the best way to buy an investment property from a parent who has already paid off the mortgage.

Hi, I’m new to BP and I was hoping to get some feedback from you all! I am in the process of talking to my mother about purchasing a property she bought when I started renting throughout college in Louisville, Kentucky. She wants to get rid of it, and I’m interested in getting into real estate. The home is located in the 40215 area of Louisville, and is zoned for multi-family as the upstairs is an apartment with its own entrance. It’s on S 5th St, and a lot of the homes immediately around it have or are undergoing rehabs. My mother purchased it in 2015 and we have been renting it out to my friends over the years while I live there for free during college. I would like to continue renting to college kids, as I have friends lined up for the next few years. There are 4 bedrooms(including the 1bed apartment upstairs) with each renting for $375-400/mo She owns the house free and clear, and I'm trying to figure out the best way to go about giving her a fair deal that gives both of us the best outcome. In trying to figure out the best way to structure a deal for the property, I’ve looked into the idea of her gifting equity and owner financing.

I've partnered up with two other guys who have raised money from investors and we are looking at other investment properties to continue in real estate. The goal of this house would be for me to continue house hacking it and use this house as leverage to purchase other properties. Is there a way that'd allow me to have her owner finance this and pull out equity in a HELOC or cash-out refinance in 6 months after seasoning while continuing to make payments to my mother going forward? Or is there a better way to do this? Also, can I do this through an LLC or would that hinder my ability to get the best outcome since I would only be a one third partner in the LLC. Thanks in advance for any feedback!

Purchase Price - $70k-85k

Cash Flow Per Room - $375

Property Tax - ~$700 & Insurance ~$500

NOI (50% rule) - $750

OR

NOI: $1500- $105(7%vacancy) - $120(8% PM) - $150(10% repairs) - $58(Taxes) - $42(Insurance) - $250(utilities) = $775

Estimated ARV(current w/ ~$4k of work) - $85k

Estimated ARV(w/ ~20k of work) - $115k

--Will most likely wait to do this until later on since it will only be college students renting

Mortgage 30yr & 5% rate(5% Down) - $485/mo(includes PMI)

@Andrew Whitacre @Salvator Migliore