Retiring soon, cash flow investing

12 Replies

Originally posted by @Almaz Hayet :

I have a rental in CA with negative cash flow, will do 1031 exchange and have about 100k to invest. Thinking to invest in Austin as I plan to move there. Any advice/suggestions?

 Not Austin, but maybe San Antonio or Ft Worth.

Originally posted by @Almaz Hayet :

I have a rental in CA with negative cash flow, will do 1031 exchange and have about 100k to invest. Thinking to invest in Austin as I plan to move there. Any advice/suggestions?

 San Antonio has a grear market!  Shoot me a PM so we can discuss this further!

@Almaz Hayet Austin is a great market to invest in, especially for the buy and hold investor. Although average market prices in Austin are higher then San Antonio/Houston/Dallas, we are growing at a much higher rate. With Apple building a 133 acre campus in North Austin that will bring more jobs to Austin which will bring more renters also. Not to mention Amazon, Oracle, and Google who have created new jobs in Austin in the last 5 years. 

@Almaz Hayet , One thing you've stumbled on (probably on purpose) is that you're moving to a tax free state. By deferring the tax on your CA sale you're moving it into TX with no state income tax. So immediately your NOI will get a boost. However, any tax free state will accomplish that since you're moving to one yourself. So if you want to you can also look at TN, NV, FL. These are probably the three most active cash flow real estate states that have no state tax. As long as you continue owning your property or as long as you do a 1031 again when and if you ever sell you'll continue to avoid the tax. And CA can't use the clawback provision to get their hands on the gain. It's a mine field getting things out of CA but if you know the ground rules you'll do just fine.

@Almaz Hayet first have to recommend 

@Dave Foster he is awesome and has helped a lot of my investors. If you are looking for high cashflow, you will have a harder time finding it in Austin. I personally think you have missed the boat on this market. It is now more of a "growth" market than a cashflow market. Sure you can get some cashflow, but not as much as it was a few years ago. Also property taxes are higher here- so you give up some of your cashflow there. (I prefer Dallas over Austin right now). If you want more cashflow than growth, consider markets in the South or midwest. You will get much more cashflow than Texas- more bang for your buck. This is generally speaking- you can always find a golden unicorn,  but depends on how hard you want to look and how much you want to compete and you will be fighting very experienced buyers in Austin, w/lots of bidding wars.  

Ask yourself this question; what is the most important strategy for YOU? Cashflow, or Growth (appreciation)? what is your long term plans?  

Then go to the market that suits YOUR needs, instead of getting caught up in the hype of some markets. 

@Almaz Hayet   I lived in San Antonio for many years, then spent a decade in Austin.  I think you'll be hard pressed to find anything that will cash flow in Austin.  If you want to stay local, certain areas of SA can be good for buy/hold rentals, and you'll only be 1.5 hours drive away.

I like Austin because I live here and know it very well. Austin is harder to cash flow than other parts of the state but to say that there aren't properties that cash flow is not accurate. Its a sellers market to be sure and some sellers are asking for top dollar. But some sellers are more realistic. Sfr's are more likely to cash flow in the suburbs. One can find multi's in the city that will cash flow.