Austin investment-frustrated not sure what to do

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Austin investment-frustrated not sure what to do

Prash Manohar
Member since 2020 · 72 posts · 41 votes

Hi all, lost 7 offers in north Austin last 45 days despite going 20-25K over asking..on SFH. My agent is indirectly forcing me to explore south -Buda/Kyle, what do you guys think of long term appreciation and renters? More vacancy rate compared to north Austin? is it equally horrible down south?

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

@Prash Manohar If you don't want to offer more than $20k-$25k over asking in your contracts currently, this is not a good time to try and purchase a property. Austin has the lowest number of active listings in its history, with properties getting 30-90+ offers and going under contract $80k-$150k over the list price on average. Wait until March-April when all these crazy sales close and create new comps for these neighborhoods. The new list prices this spring will better reflect the actual market, many buyers will have to reshift their strategy based on these new prices, and most importantly, many more listings will hit the market because we'll be in the more popular spring months for listing homes. Stay patient, better opportunities will surface at some point.

[email protected]512-674-5478
Ryan Kelly Group - Keller Williams5112 Reviews
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  • Rohan D.
    Member since 2019 · 41 posts · 41 votes
    5y

    Yup, equally bad down south. Your location really depends on your strategy of investment and comfort level. In general heard good things about Kyle/Buda. I wouldn't say vacancy rates are higher in SA. Experts can comment otherwise.

    1Reply
  • Vik J.
    Redmond, WA · Member since 2017 · 134 posts · 65 votes
    5y

    Good day Prash! First off, a hearty welcome to this forum! 


    We are all facing the same challenges, even more so for blokes like me who are OOS investors. The most obvious advice would be "be patient, something will show up" but it is challenging all the same.

    That said, it also goes back to what your criteria is (price point, neighbourhood, amount of time investment). Depending on that, you can still find properties. I've heard of folks buying BRRR properties, for example. Again, depends on how well you're connected and how much time you're willing to give, and something will work out. I am a remote OOS, I was lucky to buy a few years ago when it was this manic, but I have also been frustrated by what I'm seeing.

    Of course, like my dear ol chum @Rohan D. points out, there are several experts on this thread that could offer additional advice.

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

    @Prash Manohar If you don't want to offer more than $20k-$25k over asking in your contracts currently, this is not a good time to try and purchase a property. Austin has the lowest number of active listings in its history, with properties getting 30-90+ offers and going under contract $80k-$150k over the list price on average. Wait until March-April when all these crazy sales close and create new comps for these neighborhoods. The new list prices this spring will better reflect the actual market, many buyers will have to reshift their strategy based on these new prices, and most importantly, many more listings will hit the market because we'll be in the more popular spring months for listing homes. Stay patient, better opportunities will surface at some point.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5112 Reviews
    WebsiteView Page
    6Reply
  • Andrew W.
    Investor · Austin, TX · Member since 2017 · 71 posts · 76 votes
    5y

    It's competitive for sure. I would recommend buying off market to get out of the bidding war. If you are new I would try to buy 1-2 deals in cheaper areas to get experience without tying up so much money (San Antonio to Buda, or Temple, Manor, Elgin, etc). The first couple deals are about learning more than making money. 

    This thread may be helpful:

    https://www.biggerpockets.com/forums/759/topics/880886-what-is-your-ideal-buy-and-hold-deal-in-austin-texas?highlight_post=5156260&page=1#p5156260

    1Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    Off-market would probably be your best bet. Not sure if you are a local or an out of state investor, if you are out of state you might want to look at other markets. Good luck. @Prash Manohar

    [email protected]614-963-3340
    1Reply
  • Kris Wong
    Rental Property Investor · Austin, TX · Member since 2016 · 361 posts · 394 votes
    5y

    Are you buying for a primary residence or as an investment? Buying a SFH out of the MLS in the Austin MSA is almost guaranteed to cash flow negative. Maybe if you find a real fixer-upper that none of the non-investment buyers want to touch you could find something that makes sense, but then you'll probably be competing with the flippers. What's your goal here?

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Ryan Kelly we put an offer on one with 80 the other day, highest I've seen. What most people aren't talking about is that more homes are selling than last year, just more demand now. There are houses to buy guys! Just be ready for a long, tough process and make your offers strong in every way! Low option days, high option money, high earnest, great cover letter, great lender speaking for you and just as high of an offer as you can!

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    1Reply
  • Stephen Stokes
    Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
    5y

    What is it that Warren Buffett likes to say? Greedy when others are fearful and fearful when others are greedy. Sounds like a lot of greed in the market today.

    5Reply
  • Daniel Chappell
    Realtor · Kyle, TX · Member since 2020 · 7 posts · 1 vote
    5y

    @Prash Manohar I am a Realtor down in the Kyle area. We’re seeing similar activity down here. Very little inventory, over priced homes are still going under contract in a matter of days. That being said, you would probably have better luck down here. 20-25k over list would certainly get the job done down here, although I don’t know that you’ll get an appraisal that will justify that. Appreciation rates are still very healthy in this area, 3-6% per year on average. Rentals take around 45-60 days to be occupied, but depending on the amount you’re putting down and the loan type you’re looking to use, rental rates are not exactly keeping up with current home values, so you might not be able to cash flow as much as you could have say, 1-2 years ago. If you’re looking for other places to invest that might offer better cash flow, the further outside of Austin you go, the better your chances.

    Good luck!

    0Reply
  • Prash Manohar
    OP
    Member since 2020 · 72 posts · 41 votes
    5y

    Thanks guys , how is Del Valle wrt crime and schools? I know Tesla is right in there but horrible school district. Is it possible to get tenants there?

    0Reply
  • Matt StricklenPro Member
    Investor · Austin TX · Member since 2020 · 227 posts · 152 votes
    5y

    I have been very happy to live, own and work in South Austin for 20 years. If vacancy has been longer than 2 days, it's because we needed it, not because renters couldn't be found. My duplex has more than doubled in value in less than 10 years. 

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Matt Stricklen awesome man! Let's connect sometime

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    1Reply
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