New Member from Austin, TX

15 Replies

Hi,

My name is Sujith from Austin, TX. I work in hi-tech sector full-time and would like to start off REI part-time (mostly on weekends) to supplement my income. Would like to start off small and go big is the plan. Planning to get one done in next 6 months. Have some questions. Would be great if seasoned investors can help guide me to start this journey.

a) Are there any REI groups in Austin that meet regularly which I can attend?

b) Would like to start off in San Antonio with buy and hold $100K worth multiplex (at least a duplex). Put a 20% down and finance remaining with 30-yr financing. Chose San Antonio as I could not find any properties in my budget in Austin and San Antonio is closer to Austin. Is this a good first step?

c) How do I find good leads/agents from San Antonio? I spoke with some agents and almost all of them backed out and did not respond when I told them my criteria - $100K, multiplex and positive cash flow. I started to wonder if this is possible at all?

d) Whatever properties I found on MLS(realtor.com) for that price point are in low-income areas(according to city-data.com) and obviously lower rents. If I invest in such areas, will there be any appreciation of the property?

e) Will there be any property management companies that would take up such properties to manage including eviction just in case if any problems arise with tenants?

f) Are tenant occupied multi-plexes recommended for purchase in such low-income areas?

Thanks for the help!

-Sujith

Hello Sujith,

I'd be happy to have a conversation with you about your plans. I'm a Real estate agent and property manager here in the San Antonio market. Send me a PM if you would like to talk.

You have picked a great site to learn from so continue to read up and ask as many questions as you can.

Hi @Sujith C. ,

I'll preface my answers with the fact I'm also a new investor in San Antonio and have yet to close an investment deal.

a) Are there any REI groups in Austin that meet regularly which I can attend?

Try searching meetup.com for REIA in Austin.

b) Would like to start off in San Antonio with buy and hold $100K worth multiplex (at least a duplex). Put a 20% down and finance remaining with 30-yr financing. Chose San Antonio as I could not find any properties in my budget in Austin and San Antonio is closer to Austin. Is this a good first step?

Maybe. MF in SA has seen exponential price appreciation over the past 6-12 months. This makes it difficult to find sound MF investments outside of turnkey properties which will be priced at a premium. This question ultimately boils down to your goals as an investor. Do you want cash flow every month or can you afford negative cash flow in exchange for a higher probability of appreciation?

c) How do I find good leads/agents from San Antonio? I spoke with some agents and almost all of them backed out and did not respond when I told them my criteria - $100K, multiplex and positive cash flow. I started to wonder if this is possible at all?

There are multiple ways to find leads; direct mail, searching MLS listings with an agent, driving for dollars...Best bet is to search the forums and see what best fits your abilities, time and financial positions.

d) Whatever properties I found on MLS(realtor.com) for that price point are in low-income areas(according to city-data.com) and obviously lower rents. If I invest in such areas, will there be any appreciation of the property?

This won't be the first time you hear this but here goes. Appreciation is best left as the "cherry on top" of an otherwise sound investment. You certainly could try an investment that is predicated on appreciation, I'd keep in mind this is closer to speculation than some investors as comfortable with. As far as low income tenants are concerned, there is a ton of info here in the forums on this topic. Try searching for "low income" or "section 8".

e) Will there be any property management companies that would take up such properties to manage including eviction just in case if any problems arise with tenants?

I can't answer this, sorry :(

f) Are tenant occupied multi-plexes recommended for purchase in such low-income areas?

I've heard multiple podcast guests say this is a bad idea, but see what others have to say.

Good luck and welcome :)

Hi Sujith,

What part of Austin do you live in? Have you considered a more rural area that is outside of Austin instead of going to SA? I am a Realtor in Marble Falls about 45min west. There are some some lower prices duplexes in this area. I know Taylor and Hutto are also a little more Rural and less expensive, but not as far as SA (depending on what part of Austin you live in).

Have you considered new construction?

@Sujith C. , you can look outside TX also if you're comfortable.  I invest out of state and have fantastic property management in place that manages my properties.  I have sold a few of my properties as turn key rental properties, and can share more info if you're interested.  I would love to invest locally (I'm near Marble Falls, TX- 55mi from Austin), but I can't find the returns that I can find elsewhere.

@Kale Stephens thanks for the suggestion. I live in North Austin. I have not looked into Taylor/Hutto yet. Are there any colleges or companies there? How is the Marble Falls? Who are the major employers there?

@Paul Williams Thank you! Since this would be my first time, would be more comfortable investing in something that I can drive to occasionally but as you said, returns should also be taken into consideration. Would love to here from you how you do out of state investments.

@James Wise  Thanks!

@Sujith C. I am not as familiar with the economy in Taylor and Hutto, I just know from working with buyers it is north east Austin and much more affordable. Marble Falls is an interesting market. It is a small town that is about 45 min from Austin, but supports several small cities around it. It has a large population of retired people (who I hear make great tenants) and commuters that work in Austin. I'd be happy to show you what is on the market!

@Sujith C. I will be in Austin tomorrow night at Parmer and 35 for a passive business income meeting.  If you'd like, we could visit tomorrow at the event. The meeting is not real estate related, although several of us that will be there are involved in real estate.  If you're interested, let me know and I can give more details.

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