Trying Anything in Austin!

16 Replies

I am absolutely in love with Austin and do not plan on leaving anytime soon. I also am a soon to be real estate agent and am looking into buying my first property within the year. The only problem is that I want to purchase in the 78702 zip code (yikes). Everybody is talking about the craziness of Austin's market and I have read on the BP forums that it wouldn't be a good investment to buy super central but I moved to Austin to be close to the city and I plan on living in this home and house hacking for as long as I need to. I currently work for Keller Williams and looking on the MLS is super stressful…I was wondering what peoples thoughts were on sending personal letters or even going door to door and letting people know that I want to buy their home and it's my first purchase and I would plan on living there myself…all of that jazz. It may seem like a stretch but I think a lot of people in that zip code feel that they are being pushed out by investors and such and I may appeal to them. I could put down 20-30 cash. Thoughts? Anybody tried this? What should I say to actually make this work? Is this just a waste of time?

it is super competitive in that neighborhood, but good deals are still getting done.  I have marketed heavily to 78702 over the past few years, but have backed off some because it is bloodsport.  Generally, you can buy a falling down shack for 200K to 350K, or something in decent shape for 250K to 400K, or new construction (not condo) for 400K+,  Yes, there are exceptions.

As far as talking to the owners who might work with you, they hear from many investors, so you have to differentiate yourself.  

I have built several properties there, and I own several there now, so I'd be happy to try to answer any more specific questions.

Thank you @Jon Klaus! I will definitely have a few questions for you soon. 

Originally posted by @Jon Klaus :

it is super competitive in that neighborhood, but good deals are still getting done.  I have marketed heavily to 78702 over the past few years, but have backed off some because it is bloodsport.  Generally, you can buy a falling down shack for 200K to 350K, or something in decent shape for 250K to 400K, or new construction (not condo) for 400K+,  Yes, there are exceptions.

As far as talking to the owners who might work with you, they hear from many investors, so you have to differentiate yourself.  

I have built several properties there, and I own several there now, so I'd be happy to try to answer any more specific questions.

 I figured that the home owners are probably so fed up of getting approached...I wasn't sure if asking would even get me anywhere with them at this point. Did you find any of your properties this way? 

@Kristina Modares,

The worst thing that can happen is they say "No, they aren't interested in selling."  You will probably run into a few disgruntled people if they are targeted as heavily as you say that they are, but remember you're only looking for that 1 deal. 

In the grand scheme of things, if they don't bite, they wont remember you the next day anyways. So don't take it personal.

If I were to do it, I would try the door to door approach, simply for the fact of being able to gauge the neighborhood and putting a face with the name. While you will stumble on houses that aren't interested in selling, neighbors talk, and they may know of someone a few houses down who is contemplating it.

I have to agree with @Chris Harkins   You really don't have anything to lose other than your time and I would just consider that an investment into learning the neighborhood and people.  All it takes is that one person to say yes and you make all the effort worth it.

In a Market full of competition, one should consider outside the box plays like networking with BK Attorneys, Estate Attorneys, Short Sale Consultant Firms, local Bank VPs, etc.

As a licensed Agent, your game just got more difficult as now you have to disclose 2 things: Investor and Agent

So if they didn't like the Investor side of you, how will they feel about the Agent side of you? This can help your Agent Business or it could hurt both businesses if you try to do them in tandem.

On a Macro level, you may want to play the TX Market with extreme care. Since the Oil Markets are seeing a pull back in jobs in those industries, you want to make sure the other sectors are growing and not flat-lined. My guess is you will start to see some resistance by other Investors in the market, prices will stabilize or start a slight decline and then it's up to the Micro Economics to determine if the "Hot Zones" will continue on or if the population makes a shift towards non-oil markets. This could be great news for your Agency Business but not so much for your Investor Business.

Investor Business...buy a patch of land and build a Tiny Home Community :)

TX could be an interesting landscape between this year and 2018...fingers crossed!/

Here is how I've found properties in Austin. 

1 Yellow Letters

2 MLS

3 Partners

4 Wholesalers

5 Referrals

6 Agents

I also use websites and signs but haven't bought Austin properties that way.  Yet.

78702?  East Austin?  Why would you want to live there?...  a lttle rough around the edges for me.  I agree the proximinty to downtown makes for a sound investment.   Maybe it is safer than it looks, but there are streets with people standing around on corners and they are not waiting for the bus.

Originally posted by @Marian Smith :

78702?  East Austin?  Why would you want to live there?...  a lttle rough around the edges for me.  I agree the proximinty to downtown makes for a sound investment.   Maybe it is safer than it looks, but there are streets with people standing around on corners and they are not waiting for the bus.

 That's 12th and Chicon, most of the zip has vastly improved over the past few years, including there.  I just sold a duplex for 900k 3 blocks away. Central East Austin is well into gentrification. 

Even tho I live 1200 miles away Im interested in Austin myself. My first call when I actually do make the move to invest there is going to be to @Jon Klaus  . So you have the right guy answering your questions.

We have gone door to door in our city to ask old ladies if they want to sell their home. It works sometimes. Don't know how it would work in Austin, very different market from the cheap and steady market here. 

@Chris Adams  Glad to here that! @Jon Klaus  Thank you for the advice. My lease is up in November but I am starting this process now because I remember looking casually this summer and it was an overwhelming and frustrating process, ha. @Marian Smith  you would be surprised how fast that area is changing...great houses, restaurants and stores pop up every month.  

Originally posted by @Fred T. :

In a Market full of competition, one should consider outside the box plays like networking with BK Attorneys, Estate Attorneys, Short Sale Consultant Firms, local Bank VPs, etc.

As a licensed Agent, your game just got more difficult as now you have to disclose 2 things: Investor and Agent

So if they didn't like the Investor side of you, how will they feel about the Agent side of you? This can help your Agent Business or it could hurt both businesses if you try to do them in tandem.

On a Macro level, you may want to play the TX Market with extreme care. Since the Oil Markets are seeing a pull back in jobs in those industries, you want to make sure the other sectors are growing and not flat-lined. My guess is you will start to see some resistance by other Investors in the market, prices will stabilize or start a slight decline and then it's up to the Micro Economics to determine if the "Hot Zones" will continue on or if the population makes a shift towards non-oil markets. This could be great news for your Agency Business but not so much for your Investor Business.

Investor Business...buy a patch of land and build a Tiny Home Community :)

TX could be an interesting landscape between this year and 2018...fingers crossed!/

Thanks Fred. I have thought about the Tiny Home Community. I haven't dug too much into it but from what I have heard it may be more money than one would think...but who knows! 

I think we probably have more projects going in 78702 than anyone out there right now.  The zip code is over bought IMO and we haven't bought anything in the last 12 or so months in 02.  The smart investors are exiting the zip code too from what I can see.  

Other zip codes nearby like 21, 22, 23, and 45 are better investment areas right now IMO.  

@Bryan Hancock  Thanks Bryan, yeah..I think I will have to keep my options open and look into those zip codes. If you know of streets I should stay away from in terms of safety, let me know. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.