Where to start investing in Austin Texas

Question

Looking to get started investing in the Austin area. Interested in both flips and rentals. Any investor/realtor contacts or people who would be good to work with? Thanks in advanced.

Scott Sutherland · Answer

@Edwin Louie the short answer is no. Long term rentals in town are closer to .7% of purchase price per month. You mentioned ARV which would account for some sweat equity improvement and also perhaps an under-rented property.  Those situations help but Austin is largely an appreciation play at this point. Most entry-level single family homes and duplexes are priced such that they will just cover the monthly payment, repairs, and property management with 25% down. Over time, cash flows should increase but immediate cash flows in Austin typically requires house hacking or short term rental. AKA, additional work.

Jarrod Covey · Answer

Hi Account Closed  - it can be competitive in Austin regardless of your investment strategy. House hacking a duplex can be done if you're willing to sacrifice your location.

Scott Sutherland · Answer

You bet @Edwin Louie

Account Closed  regarding the house hacking. My favorite strategy is the 3.5% down FHA duplex purchase. Live on one side and vacation rent the other side. The city of Austin has stopped issuing type 2 (investor) licenses but will still issue type 1 (owner occupied) so you should be able to operate the other side of the duplex legally as a vacation rental. For additional income you could always take on roomates or rent out rooms on your side of the duplex.

Another tip....look for small duplex pockets surrounded by single family homes. Avoid areas where the entire street or subdivision is duplexes or worse yet....fourplexes. You want to make sure your neighbors are lifting you up, not dragging you down.

Another benefit of duplexes.....in Texas you can convert a duplex into two condos. This allows for an additional exit strategy when you ultimately decide to sell.

Jordan Moorhead · Answer

Account Closed would you consider househacking?

Account Closed · Answer

@Jordan Moorhead to answer your question yes im open to the idea of house hacking. Any info on owner occupied multifamily would be appreciated as well. Thanks.

Steve Rozenberg · Answer

Go to local networking events and any investor meetups are always a good way to meet people and get involved in the local market

Edwin L. · Answer

@Scott Sutherland Thank you for your insight to the Austin market!

Jordan Moorhead · Answer

@Dalton Zwart huge fan of the strategy, what questions do you have?

Jacob Sampson · Answer

I would suggest starting in the areas in which you are most familiar.  Nothing makes success easier than knowing what an area will bring in rent wise or what a home can sell for when remodeled.

Edwin L. · Answer

@Scott Sutherland, are there properties in or near your market where rents are commonly 1.2%+ of the ARV? Thanks!

Where to start investing in Austin Texas

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