All Forum Posts by: Aaron Gordy

There is no guaranteed absence of downside. One can mitigate that risk via hedging but even then there is risk. More than likely the person who went from 0-150 m in 3 years used high leverage which is very possible in real estate. High leverage equals high risk and hopefully high reward. Real Estate has historically increased in value along with inflation but there are cycles. Its the cycles that bust folks if one isn't prepared for it. The cycles has humbled many a real estate "star" historically.  

Commercial is risky too even if one has Grade A tenants. Due to more folks working from home, the office sector is riskier than it had been a decade ago. For example, Google could buy out their remaining lease or utilize a buyout clause. Then that office building that was low risk and have a low cap rate could become very risky if there aren't any other tenants willing to take that space. 

Personally, I like retail and multifamily. 

@Austin Wolff You are right, sort of. The total expense can't be more than 75% of the market rental income. That scenario is nearly impossible currently. You should have a good chat with a creative mortgage broker that specializes in investment properties as there might be other possibilities for you as there are so many ways to pull off a deal. If you are a veteran then you are golden. 

@Austin Wolff The self sustaining fha rule for fourplexes kills most Austin metro deals, btw. 

@Kelly Stanton Getting a license to run an STR might be tough in Austin. Some folks do it below the radar but executing a business plan based upon the potential to get a license is highly risky. The money potential is there, though and that is why many folks do it anyways. Run your numbers as a str, mtr and ltr just in case. Duplexes will likely cash flow better than townhomes. There are tricks to the trade that can boost ltr income as well. Is there sufficient and increasing rental demand in East Austin? Most definitely!

Keep in mind that the Austin metro is also growing in population tremendously as the job machine keeps cranking out jobs. The unemployment is the lowest in the state at 2.8% The Cumulative labor force has increased month over month by 12k. The folks moving here are either moving into rentals or buying homes to live in. I would expect rents to keep increasing quite a bit. 

As a long time investor I am very grateful that this metro is and has been a job creating machine for decades. Btw, there are submarkets that are in such high demand that prices are still appreciating substantially in spite of the interest rate headwinds.  

@Mike Smith You can dispute an appraisal. I have disputed so many appraisals its not even funny. As long as you provide facts (better comps) and logical reasoning why your comps are better that is well grounded then you have a reasonable chance. Appraisals are by definition an opinion of value. 

Get them to go down to the appraised value or walk. 

@Sarah Davis 60% vs 55% of a typical lot is about the size of an efficiency or an adu. That would relieve some housing pressure. But the biggest change is allowing for up to 11 units. Thanks for posting! Hopefully it will be greenlighted to move through the channels quickly.

I am glad to see that the Mayor runoffs will be between two people that realize the need to change things substantially from the present and that both have State of Texas legislative experience. 

Find a Realtor that works in this investment niche. If you were in the Austin metro area then I would surely like to meet you. Knowledge of the chosen submarket is critical so I think that you should be open to the color/style of the kitchen especially if it sells for top dollar quickly. Just my two cents! 

@Remona Castle Most definitely reach out to the hml and explain the situation. I bet that they would be willing to work with you. It happens with remodels as sometimes one doesn't know what is truly going on until one opens up the walls and really digs into the project. Cut out the GC and do it yourself. Go to the other 2 options lastly.