All Forum Posts by: Zachary Barton

@Renee Burke thank you for your consideration. I would never want to solicit you away from your agent. I hope they do a wonderful job for you. Always happy to answer questions.

That’s all you can do. Keep running the numbers on everything that comes on the market in your area and move fast when you find the right one. Best of luck! 

@Renee Burke Have you started analyzing properties in the areas your mentioned? There are only a handful of MF properties, on market, in the area you're looking at. Have you seen all of them and ran the numbers on the ones you think have potential? There are about 120 SFR in the same area on the market right now. It would take you a little longer to sift through those but I'm sure a few of them will peak your interest.

Sounds like you have an understanding of the expected returns and potential for an investment in Austin. And usually if its within your means, it's almost always better to own your residence and capture equity, instead of renting. So, weather you end up going SFR or MF, justlook at the long-term debt pay down, the potential cash flow, and the potential appreciation of the subject property and determine if it's a worthwhile investment for you. Do that for every property that catches your attention, that meets the criteria you laid out above, and when the right one surfaces don't hesitate to make a move.

@Renee Burke it’s good that you have narrowed your criteria down to the class of property your interested in purchasing.

How much do you intend to put down and what is your budget? If your goal is to house hack rentals but you don't want to move every year, then a MF is your only option. SFRs by definition won’t work as a "rental house hack" if you don't move out of it and place a renter in the property asap (usually a year for lending eligibility reasons). It usually takes 25-35% down to break even on a 1-2 unit rental property right now. Fully rented. So, if you live in one side of the duplex it’s unlikely you will make money. Instead you will be collecting market rate rent from your tenant and will likely need to pay out of pocket the remaining mortgage balance each month. Assuming you put down 25-35%, your portion of the mortgage would be somewhere around the going rental rate of a unit comparable to yours. You could still receive the other 3 befits of RE investing, tax benefits, debt paydown, and hopefully appreciation.

As far as quality areas go, I recommend searching for property by school districts and your budget only. There are only 20 active MLS MF listing in Leander, Round Rock, and Lake Travis ISD right now. Those are the 3 best ISD's in the area and all three have relatively low crime rates.

ADU's cans be added to certain lots in the Austin area and of course they can provide you with an additional stream of income from the property. The prices and of these things vary widely (40k-120k) but something around 300-600 square feet could rent for $800-1100/month.

Theoretically you can make one of these things meet the 1% rule. It won’t turn a money pit into a great rental, but it could add some extra cashflow to a decent deal.

Hey @Steven McPherson We look forward to having you down here!

It’s a very competitive market at that price range but there are certainly deals to be found. Cedar Park and Round Rock are two of the best school districts in the central Texas area. And they still consistently have homes priced under 200k. Solid 3/2's in the right part of those towns would be a good place to start.

Sounds like you’re looking for buy and hold investments, right? What kind of returns are you looking for? Do you plan to buy with cash? 

@Costin I. looks like we would just need to keep an eye on the meeting updates on their website. Then decide if you want to be a member of their group...

Are you talking about the total amount of condos sold each month? Over the past several quarters it looks like we there has been an average of 250-350 sold a month with no major decline in sold units yet. 

Stats for the post above. 

@Costin I. @Lexi Teifke Do you know if Shenoah publishes the condo market report anywhere or do you have to attend their meetings to receive a live review? I can’t find any clear studies of the condo market in Austin, but I did a little digging myself. 

My stats are definitely imperfect and incomplete because of the way I gathered the data. Anyone who chooses to review them will see some flaws. But I just wanted to get a general idea of what the condo market looked like over the past three years and I do think the data is good enough for that. Over the past 12 quarters (to date) the average sales prices where as follows; in order, 287k, 319k, 287k, 299k, 315k, 330k, 318k, 317k, 328k, 332k, 328k, 317k. The pattern seems to show price jumps in the busy seasons with small backslides during the slow season. So basically, the condo market is following your typical real estate trends with steady appreciation. It does appear to be kind of flat for the past year though. We’ll have to see if we see a price jump above 330-335k this summer that’s what would signify continued appreciation. If it hovers at or below that number, then we could be seeing over a year’s worth of stagnation.

It’s also worth noting that the average days on market has been between 45-60 days with no significant changes over the past 3 years. 

The good news is there’s enough equity in the property to do a cash out Refi and pull out the 110k you would need to close on the new home. 110k = 20% + 10k CC.

The bad news is that would put the total mortgage amount at around 285k with a PITI of roughly $2250/month.

But here are a couple important questions that could change the equation.

Does he currently live in the home?

Does he have to purchase the property for his daughter or can it be in her name?

Is $1800 his PITI or does that include any landlord fees like repairs, capex, or managment?

Its a very cut and dry explanations for how to apply for, and run a, STR. Defiantly a good listen for beginners.