Exits on projects we're developing are getting crazy right now. I am honestly considering stopping development and shifting to something else soon given the lunacy.
It will be fun while it lasts ;-)
Can you expand on this a bit? Also, what are you thinking of shifting too?
I've been looking at rental homes in the Houston area because I cant the the numbers to work here (Austin)
I am not sure what we'd shift to just yet, but larger development projects with lower per-door prices that we can cash flow may be in the cards. There is a logical ceiling to what people migrating to Austin can afford to pay based on their income and given the pricing of late I am not sure how long the appreciation is sustainable.
Things are certainly going quite well right now, but 78702 lot prices are a lunatic level pricing right now on the open market. Stuff we could buy for $70k/door a few years ago is now going for double that easily now. I am not sure how developers can profit from this new pricing and owner-occupants with little idea what they're doing are driving out risk mitigation strategies on the buy side.
We're still finding deals, but it is definitely a lot harder than it was a year ago. I have piles of investor cash looking for projects and it is taking longer to source them now. That is a pretty good sign that it is time to shift strategies somewhat.
I am not sure what we'd shift to just yet, but larger development projects with lower per-door prices that we can cash flow may be in the cards. There is a logical ceiling to what people migrating to Austin can afford to pay based on their income and given the pricing of late I am not sure how long the appreciation is sustainable.
Things are certainly going quite well right now, but 78702 lot prices are a lunatic level pricing right now on the open market. Stuff we could buy for $70k/door a few years ago is now going for double that easily now. I am not sure how developers can profit from this new pricing and owner-occupants with little idea what they're doing are driving out risk mitigation strategies on the buy side.
We're still finding deals, but it is definitely a lot harder than it was a year ago. I have piles of investor cash looking for projects and it is taking longer to source them now. That is a pretty good sign that it is time to shift strategies somewhat.
Austin leads the nation in gross metro product, and is predicted to keep the number one spot through 2020. Unemployment has dropped below 5%. I just heard that apartments at Lamar and 51st that were renting for $650/mo 5 years ago, are at $1200/mo now.
Fastest growing metro economy and projected to keep up the pace for years to come. Austin leads the nation in gross metro product, and is predicted to keep the number one spot through 2020. Unemployment has dropped below 5%. I just heard that apartments at Lamar and 51st that were renting for $650/mo 5 years ago, are at $1200/mo now.
My friend's condo (800sq) @ enfield is renting $1500/mo right now.
Involved In Real Estate · Austin, TX · Member since 2014 · 46 posts · 12 votes
12y
I have pocket listing, investor special... good bones in 78745
needs cosmetic overhaul/updating
1699 sq feet, largest lot in subdivision at 104 x 122
huge old oak trees, high rents in area too.. that go quickly
owner will let me show to investors pre-MLS as I'll reduce listing commission from 6% to 4% if I bring a buyer.. can show to investors on Weds, let me know if there is interest. This is my first post like this, so mods, if I'm wrong for posting here, please correct me, do I post things like this in marketplace?
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
12y
78745 is up and coming. The dirt is still relatively attractive in terms of price if you can find stuff near 71. We are considering doing some new projects over there, but haven't started any yet.
Real Estate Investor · San Antonio, TX · Member since 2014 · 785 posts · 190 votes
11y
my first deal that I bought here - $51,000 cash, owner financed, makes 16% ROI, no repairs or maintanence by me. It's now worth $125k. 605 West Hollywood, 78210 I think the zip is in San Antonio. It is on my site (I am leery of posting direct links to my site here, mods may not like it). thanks.
Rental Property Investor · Austin, TX · Member since 2015 · 49 posts · 21 votes
11y
This is great information. I live in Austin and partner with a colleague who lives in Houston. I WISH WISH WISH I would have found my passion 5 years ago. I lived Cameron/51st area and have watched property prices skyrocket all over the city. North Burnet (north of 45th) is gaining popularity, too.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
11y
That's what everyone in their 40-50's who attended UT says. Yep, Punk rock and the Continential Club are gone. And a lot of the hair on your head is gone. ;-) Austin: Less weird, more wired and lots more $$$.
Austin, TX · Member since 2015 · 13 posts · 2 votes
11y
@Jon Klaus , I live in Austin, and that map is almost completely true! Although, I think rich students should now include the west campus area as well since we have several new high rises added to the campus area every year.
Real Estate Investor · San Antonio, TX · Member since 2014 · 785 posts · 190 votes
11y
In my city, first deal was in 2013. I have only been in this town in for 2.5 years. I invested for 6 years in Virginia. I work with a 13 year expert investor in town now.
Real Estate Broker · Charleston, SC · Member since 2015 · 106 posts · 39 votes
11y
I plan on house hacking my first home this year in Austin (hopefully "east side") and this forum is scaring me! Love that the city is doing so well but slow down for a second so I can buy a home!
Real Estate Investor · San Antonio, TX · Member since 2014 · 785 posts · 190 votes
11y
Market will keep getting hotter I think :). I am in San Antonio and our stuff has gone way up in value in the last year as well, peanuts compared to austin but still!
Just don't speculate when buying (ie buying based on projected appreciation)...instead, the numbers must work from the get go.
I remember clearly those investors who in 2006 thought the good times would never end and they paid a heavy financial price. Optimism is good...blind optimism is very bad.
Just look at what happened recently to oil prices and the resulting layoffs. Think those layoffs impacted communities across Texas? Who predicted those layoffs? The people who study the oil markets on a daily basis? No! My point it this Kristina. Past performance does not equal future performance...fundamentals still matter and you should move forward with eyes wide open and not depend on a frenzy mentality.
Just don't speculate when buying (ie buying based on projected appreciation)...instead, the numbers must work from the get go.
I remember clearly those investors who in 2006 thought the good times would never end and they paid a heavy financial price. Optimism is good...blind optimism is very bad.
Just look at what happened recently to oil prices and the resulting layoffs. Think those layoffs impacted communities across Texas? Who predicted those layoffs? The people who study the oil markets on a daily basis? No! My point it this Kristina. Past performance does not equal future performance...fundamentals still matter and you should move forward with eyes wide open and not depend on a frenzy mentality.
Yes I thought it would never end in 2006, how wrong I was, and many others were. I have learned to buy assets much more carefully, steady cash flow is what I care about now with minimal risk, even if it's not a home run return.