All Forum Posts by: Andrew W.

@Joe Scaparra 

I generally agree with your thoughts on duplexes.

But why not take this logic further: fourplexes, apartment buildings, etc?  

@Houman Omidifar

All things equal, I would choose duplexes over single family. I bought a duplex in Austin to live in (from MLS) and it has worked out great. However, there are more SFHs available off market at discounted prices.

Cash flow is hard to find anywhere in the Austin MSA. That is what I started to buy off market from wholesalers. Unfortunately they very rarely have duplexes so I am pretty much buying single family in the suburbs such as Cedar park and Leander. Have bought a few - all under $190k and they rent for ~$1550-1650. 

On a side note, I don't understand many of the prices that investors are paying for duplexes in some areas of Austin. For example, like $380k+ for a place with total rents at only $2800. Just speculating that rents will go up I guess? 

This is the Austin, TX forum 

@Robert Eyers I have had similar thoughts. I have been able to find SFH's in the North Austin suburbs under $220k that are just barely cash flow positive with 25% down after all expenses. I would love more cash flow though.

I haven't made the leap yet, but some areas of San Antonio have good numbers. I'm thinking San Antonio is more likely to appreciate than Killeen, Elgin, or these other outlying areas, so I may consider that for my next deal. 

Does anyone know of a tool that will allow my tenant to setup a weekly automatic payment? 

Hello fellow landlords! I have a tenant who tries to pay on time but sometimes struggles to budget correctly. He gets paid every week and asked if he can pay rent weekly instead of monthly. I am ok with that if he can do it automatically since I don't want to deal with checking each week whether he has done it. Any ideas? I checked Cozy and they only support monthly automatic payments. 

My view has always been that rents must remain connected to wages, as people cannot sustainably pay more than x % of their income for rent. 

However, home prices technically do not have to stay connected to employment, as people can bring inherited wealth or wealth earned somewhere else and use it to buy here. For example, in London and Los Angeles overseas investors are buying properties just to stash money somewhere safe and they are ok with very low returns. So this pushes home prices there much higher than wages would suggest. 

I think we are seeing this effect in Austin somewhat as home prices have risen much faster than rents have. Thus buy and hold investing here is getting harder to maintain at least slightly positive cash flow. So what can buy and hold investors do? 

(A) looking to the surrounding areas rather than central Austin

(B) focus on big value add i.e. adding bedrooms bathrooms, etc 

(C) buy cash flow negative deals and hope that appreciation takes care of you (risky and not very scaleable) 

(D) other ideas? 

I am leaning toward (A). 

@Aaron Gordy, I agree with you that some duplexes have positive cash flow. I did not mean for my statement to be taken as a rule. 

@Aaron Gordy, that's great. I agree that many fourplexes will cash flow. Of course off market duplexes may cash flow too. 

What I said was "Austin duplexes on MLS are generally cash flow neutral or negative with ~20% down." which I still think is generally true. I agree that this does not apply 100% of the time and maybe some class C or D duplexes on MLS would be cash flow positive.

Hi @Jordan Moorhead, that's awesome! Does it cover Taxes and insurance too? 

Of course there is always the possibility of finding some insane deal, but I would say that my points above apply 95% of the time. 

@Ben Smith @Jack Sandel, I have been house hacking a duplex in North Austin for 2 years and agree with what is said here. 

1) There is no duplex in Austin where you can "live free" off of rent from 1 side. Maybe this is possible or you can get close with a fourplex? 

2. Austin duplexes on MLS are generally cash flow neutral or negative with ~20% down.

3. Even if #2 is true, it does not mean that house hacking is a bad idea. House hacking should be compared to what your living situation would other wise be. Now that I live in the duplex, I don't live free of course, but my monthly expenses are 30% lower than when I rented an apartment. My duplex also has ~40% more living space, plus a yard and garage so I call that a win. 

I personally would not buy my duplex as an investment property, but to live in it makes a lot of sense.