Austin, Texas and Round Rock,Texas Multifamily search

6 Replies

Hello all!

There is a good chance that I could be relocating to Austin Texas area for work and I have made the commitment that I will be buying my first multi family on my next move. I have done lots of research and reading/listening to many different resources and have a good understanding of what I want to do. My largest set back has been the market that I want to start in. I currently live in Miami and feel it is very inflated and overall don't like what I am seeing that I would get for 300k-350k. 

I know Austin is one of the fastest growing markets over the last few years but also know the market isn't anything near what California/New York areas are at. I also was researching in nearby suburbs such as Round Rock, that seems has some really nice areas for reasonable prices. I would love to hear from anyone in the area that could offer any advice. Ultimately if the transfer does happen I would need to find a place relatively fast.

I would be looking for a duplex (possibly triplex) for around $350k. I would like to do a FHA loan with 3.5 down as I would be living in one side and "house hacking". If this could be a prosperous area i think i would be ok to settle down for a good amount of years and grow my business there. It is a desirable area, no state income tax, ive heard lower taxes overall etc.

Any thoughts and help is appreciated!

Daniel

You could probably find a duplex in that price range up in Round Rock. Just make sure you understand your numbers and don't just buy to buy. If you need to airbnb for a while until you figure out where you want to live. Property taxes can be killer in certain parts of town.

I'm currently looking for the same thing.

Reach out if you want to talk further @Daniel Jodrey !

It's getting hard to house hack with Austin area multifamily. The sales price of Multi-family properties is largely dictated by potential market rate rents. If both sides are not rented at full market rate rents, the numbers often don't work out, especially if you are using FHA and paying mortgage insurance. I recommend buying a value-add single family home. Something in the $200k range that needs updating. Something you can improve and build equity.

I agree with @Carrie Hiner, Austin/Round Rock has gotten really expensive.  I live and invest in Round Rock in Single Families, have had a tough time finding anything bigger in which the numbers work.  There are some duplexes off of Green Lawn/Gaits School Road in Round Rock that may be of interest.  Started with value add single families and those have provided decent returns.  For MF, may need to move even further out of Austin area (further North of Round Rock or East (Manor, Elgin or Hutto) to find good returns. 

@Carrie Hiner What would be the strategy for that? Live in the SFH and while living make some improvements and then move out and rent or move out and sell? From what I have learned I believe I want to Buy and Hold and everything seems to point back to house hacking a multi family is a great way to get started. However from what i am seeing i dont know of any markets where the "numbers work" with this strategy. Ultimately I understand that I will not be cash flowing while I am living in one side but by hopefully living almost free, I can save with my W2 job and fund the next downpayment on the next property. What do you think? I see on basic searches in Round Rock seemingly nice SFRs around the 200k price range.

You're on the right track. You're motivated and have goals. I'm conservative and think it's best to start small. The Austin market is tough - limited inventory, a ton of interest, cash etc. Most duplex's sell with multiple offers, often with cash and conventional loans. It's tough to get a seller to accept an FHA loan when they have offers backed with more money. And you're exposing yourself to a ton of risk: two kitchens, four bathrooms. If all you have is 3.5% down... buy a small home, get a roommate, fix it up. You will gain equity.

What has been said above contains some good input. The numbers on cash-flow can be a little tight around here--especially of you are buying at retail prices. I own both SFR and multi in Round Rock and Hutto. All my properties cash flow and I'm capturing appreciation. I know there is some debate about whether you factor in appreciation, but personally I'm investing more for long-term gains (appreciation) than income (although I would never buy a property that isn't going to be cash-positive). Anyway, let me know if there is a way I can help on this end.

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