Rookie BRRRR in Austin/SA TX area

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Rookie BRRRR in Austin/SA TX area

Tanner Woolley
Accountant · Austin, TX · Member since 2019 · 11 posts · 7 votes

We're in the Austin TX area. Just moved here from Salt Lake. My wife and I just had our second child and bought our first family home. We've paid off my student loans after only two years and want to start generating some passive income! We've been interested in RE for a while now and are very interested in the BRRRR method as we don't have a lot of cash down right now due to paying off the loans and buying our home. We're thinking of out of state investments but that seems too tough for a first deal, so we're hoping to find a deal we can BRRRR in the Austin/San Antonio markets. Does anyone have any thoughts or recommendations? We would love to talk with investors, agents, or lenders in the area to get a feel!

Another thought I had... has anyone ever gotten a “second residence/vacation home” as an investment and don’t short term rentals with it? Only have a 10% down requirement and only need to stay there 10% of the time it’s rented.

Looking forward to connecting with people! Wife and I are excited.

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Caleb Robertson
Real Estate Agent · Austin, TX · Member since 2020 · 366 posts · 54 votes
5y

Hey @Tanner Woolley I'm an investment agent here in Austin and i'd love to help you in your first purchase. Austin has a great market to get into and you can reap the rewards with a quick flip and or even a good rental. If your price point is a little low I would recommend looking into East Austin in a up coming neighborhood. Or even in North Austin like Round Rock and or Leander. All catching the massive appreciation wave that Austin is causing. I'd love to connect and help you out. 

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  • Danny Webber
    Real Estate Broker · Austin, TX · Member since 2016 · 834 posts · 449 votes
    5y

    If you have 10% down you can possibly get into a NQLA- Non Qual Loan Assumption or maybe a BRRRR

    But, keep in mind you will still probably need closings costs/dn pmt money on the closing and on the refinance. Most PM lenders will not fund 100% of a deal (cost/rehab) to a new investor unless the LTV is awesome. They will want skin in the game of some sort.

    If you do a second home it will have to be a decent distance from Austin to get through underwriting. You will also need reserve funds of some sort for the underwriters when you refi.

    Doable but will require some zig-zags

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  • Kate Cavanaugh
    Real Estate Agent · New Braunfels, TX · Member since 2020 · 3 posts · 4 votes
    5y

    The Austin/San Antonio markets are great. With these markets being local I would take full advantage of them before looking out of state. Austin is growing like crazy and because of that, so are the surrounding areas. Round Rock and Leander are great areas with rapid growth and great rental opportunity if you are looking to buy and hold. There are also BRRRR opportunities there with some older homes. If you are looking to buy further South I would look into New Braunfels and Seguin. One thing to be aware of though is how the prices of the homes were decided on and ask if they were appraised.

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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Tanner Woolley First of all, welcome to Austin! We own several investments in the market and it's a great place for buy-and-hold. Regarding BRRRR, there are great opportunities to remodel aging properties in the metro area, but I do caution you not to expect to get ALL your money back out. I more commonly see people able to get the original purchase price out, but the remodel budget ends up staying in the property once appraised. You will definitely want some solid cash and cash reserves to start building a portfolio here, but the economic outlook could not be stronger.

    [email protected]512-674-5478
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  • Jay C.
    Seattle, WA · Member since 2014 · 307 posts · 170 votes
    5y

    Save yourself the headache. Buy dividend paying stocks and reap the rewards immediately. Let the proceeds purchase more shares/units. The end returns wont even be close. We are moving more and more into regulation for landlords that will linger long after CoV. 

    I am ringing the register on many of my properties and can currently do 4 times the returns in what I described above. 

    0Reply
  • Caleb Robertson
    Real Estate Agent · Austin, TX · Member since 2020 · 366 posts · 54 votes
    5y

    Hey @Tanner Woolley I'm an investment agent here in Austin and i'd love to help you in your first purchase. Austin has a great market to get into and you can reap the rewards with a quick flip and or even a good rental. If your price point is a little low I would recommend looking into East Austin in a up coming neighborhood. Or even in North Austin like Round Rock and or Leander. All catching the massive appreciation wave that Austin is causing. I'd love to connect and help you out. 

    2Reply
  • Bryan Noth
    Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Tanner Woolley Welcome to BiggerPockets and congratulations on the baby and having that student debt paid off!

    Buying a second home in the area might be a challenge as a pure investment due to the down payment required for conventional loans on an investment property.  The second home / vacation home is not a bad option, I would connect with your lender and inquire more about that route as they know the regulations surrounding that particular process best.    

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  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y

    Welcome aboard Tanner and best of luck investing!

    Podcast Guest on Show #121
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  • Tanner Woolley
    OP
    Accountant · Austin, TX · Member since 2019 · 11 posts · 7 votes
    5y

    @Ryan Kelly thank you! When you say solid cash what would you recommend for someone to get involved here?

    0Reply
  • Tanner Woolley
    OP
    Accountant · Austin, TX · Member since 2019 · 11 posts · 7 votes
    5y

    @Bryan Noth thank you! That’s very helpful. I need to find a good lender around here to ask then!

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