All Forum Posts by: David Shapiro

On Another note, you could cash-out refi and put some of the equity to work. That would likely increase your ROE (return on equity) on the property.

@Jeremy Clarke I'm in a similar situation and I've made the decision to hold. I have a long-term outlook and the time and energy it would take to replace that investment in a similarly hot and appreciating market (Austin) is not worth it in my opinion. Because of when I purchased that property (around when you did) and because it was owner occupied, I have a 3.25% 30-year fixed-rate mortgage which i certainly won't be able to get again now.

I've thought about selling at times but then bring myself back to stay the course of my original plan which is working. I hope that helps.

Hi All, I have a 13 year old rental property in Austin that needs 4 lbs. of R22 refrigerant. I'm being told by the HVAC contractor that because of the phase-out R22 is $125/lb. If I'd like to find the leak that will cost another $275, and likely the coil in the air handler will need to be replaced. They're saying $1900 - $2500 to repair. A new system with R-410A is $5780. I could probably get that price down a bit, but this is a vendor that's been fair with me and services all of my properties so I'm not concerned about the $5780 (unless someone in central Texas has a vendor that can handle for under $4k :)

If R22 wasn't so expensive it would be an easier decision as I have other systems that are 20+ years old... I'm just concerned about needing to add more refrigerant down the road especially if R22 gets even more expensive. The repair has a 1 year warranty vs 10 year parts/5 year labor warranty on the replacement.

Has anybody else faced this decision?

Any thoughts or feedback would be appreciated. Thanks!

@Christopher Thompson as you can see there are many neighborhoods in town that people love living in and are bullish on. East Side is hip and constantly changing.

Zilker, Barton Hills, Bouldin, and Spyglass are some of the most desirable neighborhoods in town. They are all in the same general area. You can walk/bike to the greenbelt (hiking and swimming), barton springs, downtown, and tons of restaurants. If are willing to afford to be in that location it's hard to beat the lifestyle. They have seen great appreciation and I think because they are so desirable will continue to appreciate, especially as people DT want to start families, get a house, but still be a bike-ride away from their old stomping grounds.

Let me know if you have any questions on that or if I can be of service.

@Account Closed I agree with Aaron and Jacob. In addition, renovated duplexes are going for around 124 GRM in Austin. With 25% down, even with high taxes they cash flow. After taking into account all future expenses (vacancy, maintenance, capex) the numbers are tight but if you forecast out some modest appreciation your IRR is above 10%. I just submitted an offer for a client that with very conservative estimates has an IRR of 12.5%.

If you have cash above the 25% down payment and can buy one that needs work you have the added benefit of some forced appreciation.

@Account Closed Are you investing out of state because you're trying to get higher returns than locally? Diversifying? Amount of startup capital you have fits better with price points in Leander?

If it's higher returns, then what types of returns are you projecting locally?

Isaac Huerta if you're able to it's best to buy the property owner occupied so you get the best terms. Are either of the tenants' leases coming to an end in the next 90 days or currently month-to-month? Side benefit- it would make managing easier if you're living there. I think that's especially nice for a first rental.

@Garth Hamilton

I'm an investor and Realtor. I have a good pipeline of that product off-market. I have a selling system that takes into account price elasticity and persona target marketing to get the rehabbed houses sold quickly for top dollar.

I'm also not afraid to hustle :)

I'm open to grabbing coffee with you or any other investors out there that want to chat.

Let's say 3 houses at 250k + 50k in repairs = 900k total needed

You need to come up with 400k of other money

Traditional mortgage - in addition to what you have, they are going to require somebody with an income source and required DTI (Debt-to-income ratio). Do you have an income currently?

Line of Credit - if you can get an unsecured line of credit at a reasonable interest rate I think that's a good option for a portion of the funds you'll need.

Private Money and then Hard Money are your two next best options.

If you are confident in your renovation skills and ability to price right to sell quickly then you could get two flips going with what you have plus some credit cards and the line of credit. Better not go over budget though if you don't have any reserve funds. That's probably not smart for most. Better off leveraging with Hard Money so you have plenty of reserves.

Hi @Account Closed

MySmartMove by Transunion is a very reliable screening tool. In addition I would recommend calling their past 1-2 landlords and ask how they were as tenants. Did they pay on time? Did they leave the place in good condition? Did they lose any of their security deposit? Would they rent to them again?

Look in their car to see if it's a mess, likely their house will be the same.

Be wary of people looking last minute.

Yes, the app fee should at a minimum cover the credit check.

I've learned it's better to wait an extra month (although sometimes can be painful sitting on an empty property) to get a more qualified tenant than to take a chance on a tenant you know really isn't qualified. An eviction, or even just damage and them not paying their last month or two of rent, is more costly.