All Forum Posts by: Zack Oberlies

We are seeing buildings cash flow just outside of "Austin proper" that will also appreciate at a higher rate as the city expands (primarily north). Round Rock, Hutto, Leander. And probably could spend the same amount of money as an Austin SFR and find a 2-4 flat in those areas, which opens the door to house hacking as well. 

I don't think less people are moving to Austin...it's still avg ~180 people a day if I'm not mistaken. Just a different market and more inventory to @Ryan Kelly's point. 

I recently moved from Chicago, and up there, it seemed like covid wiped out individual room rentals. And I know that's a blanket answer used for most things...but it's also possible with all of the implants coming into Austin, that they're bringing that mindset with them. 

I have a few off market multifamily investment opportunities in the Austin Metro area. Cash or hard money. Send me a dm for details. 

I researched and talked to quite a few PM companies (not as a landlord though) in the Austin area prior to moving to Austin. I spent 3 or 4 days with the owners of Tower Management and their team. Having run a pm/contracting company in Chicago and worked with countless pm companies up there (and seen some real horror stories), I can say that I was impressed with them and the owners are genuinely good guys that care about their team and clients. Again, it was more in a business capacity, not as a landlord, so I'm not sure if that's particularly helpful. I like to think I have a decent eye at this point though, and I was able to see behind the curtain a bit. 

Hope that helps. 

I think it also depends on how much time you're willing/able to invest in oversight. Real estate is the best investment you can make in my opinion, but it can also be extremely time consuming in finding the perfect deals, doing due diligence, overseeing contractors/scope of work, and managing tenants, leases, maintenance, etc. Diversification is always paramount, and I think you have to constantly evaluate your time allotted to certain things vs relinquishing control on certain investments (whether that's a wealth manager/financial planner, property manager, etc.).

Either way, good luck and congrats.

To piggyback on Nathan's comment, if you don't see it getting any better, I would just try to reach an agreement to get her out of there if it's financially feasible. I will say, about 50% of my tenants who were like this would drive me crazy for the first 30-60 days, and then I'd never hear from them again once they're "comfortable." I do think certain people are just wired to need their place to be exactly how they need it to be before they can relax (which I'm not defending, I know how frustrating that is as a landlord). If you don't see it going in that direction and you can withstand a month or two of vacancy, I would amenably say something along the lines of "I don't think I'm going to be able to make you happy in this home and would like to allow you to get out of your lease in 60 days." Sometimes that will put it into perspective for them and they'll dial back the neediness. Otherwise, she may sign the termination and that gives you 2 months to find a new tenant, which is plenty of time in the Chicago summer market. Especially if you're using a leasing agent, it may not be financially ideal, but if you really don't see it moving in the right direction, it's worth the mental relief. 

I don't necessarily want to condone permitted work, but you should be alright. Having run a PM and contracting company in Chicago for the last six years, I can confidently confirm that quite a few investors take the same route. Where you could run into some road blocks is if you're renting any of the units out as Section 8. Then you're having a trained eye inspect the units periodically. Even then, not the end of the world...they may just ask you to fix it and its generally not too comprehensive. Again, not condoning unpermitted work, but I've seen the worst of the worst in Chicago and it really only becomes an issue if something is visibly wrong and reported by a neighbor or angry tenant. At the end of the day, tenant safety and liability is the priority, and if that's not an issue, you should be fine. To your note about the tenant complaints, (usually) the only two times I see tenants get involved in those matters are if their quality of life is affected by a building malfunction or if they're what I would call "professional" tenants. There are plenty of people in Chicago who know how to leverage landlords, withhold rent until the issue is resolved, not pay rent for 6-8 months, and move onto the next place before they can be evicted. Chicago is extremely tenant friendly as I'm sure you know, which makes it impossible to evict tenants quickly through the city. You can avoid the first part by just being an attentive landlord to maintenance issues (whether it's you or a pm company), and the second part can usually be avoided by being diligent in the application process. I personally wouldn't have had the patience myself, but I had a client who owned 150 units, and even after hiring us, chose to do a 30 minute interview with every applicant prior to accepting them. With that being an extreme end of the spectrum, I would just recommend a lease history and landlord verification along with the background check. 

I think this is just something that you have to be willing to continue to take a controlled risk on until you're confident that you've got a great relationship. I'm new to Austin and all of my experience with contractors was in Chicago, but the thing that worked for my company during our busy summer months is that I would start with cleaners/janitors and work backwards. I hired cleaners in the spring to prep for upcoming turns and once there was a good rapport and a trusted relationship, then I would ask them for recommendations for painters, tile guys, carpenters, etc. I may have gotten lucky, but a couple of those recommendations have been with my (old) company for 4 or 5 years now. Just having that one level of referral from someone you already work with helped a lot. And moat people had a family member, spouse, or friend who was in the business. 

I've been in real estate for about 6 years, all of which were in Chicago. I recently moved to Austin, where I know nobody. I've started a job as an investment broker and have access to lots of off market deals in the area and am looking for ways to circulate my name and the deals. Being new to the area and to most social media pages, I think there's a certain level of skepticism that I'm a real person and not a scam. I'm sure it will gradually pick up, but the hard part if from 0 to 1.  

Appfolio is the way to go in my opinion. We sampled Yardi and buildium as well when we started the company years back and Appfolio was by far the most comprehensive and robust. Another benefit was that it becomes more personalized and tailored with growth. We had a couple acquisitions of other companies and with each spike in units, we would get more direct attention from the staff for support but also with the ability to recommend software updates and new IT implementation recommendations. The only downfall in my opinion (and this was something that I often discussed with them) was that it's not great for managing labor if you have in house maintenance/contractors. It's really built for using a 3rd party crew. I've been out of the business for about 8 months now, so it could be something that they're working on though. They're constantly evolving.