All Forum Posts by: Celine Crestin

Hi Thomas!

In response to your questions:

which market has the most competition right now? Both are strong markets, seeing multiple offers and offer asking price offers. Just at different price ranges.

which market has the better cash flow/appreciation? This depends on a number of factors. Austin generally has higher appreciation at the moment. Cash flow can be negative or positive in both markets depending on how, where and what you buy. There is not a one-size-fits-all answer.

Is one market due to outgrow the other? Austin is a stronger and faster growing market IMO - we have more job growth and overall desirability compared to San Antonio based on my deals in both markets. However, that equates to a much higher price tag in Austin.

What are some complications I might face when starting out in either of these markets? I plan on doing small multifamily, is this better in one market vs. the other? You'll be competing to win in both markets - I have numerous strategies that have proven successful when competing, but there are no guarantees. Be prepared to try and fail several times before winning an offer. Do your best to set yourself up for success with a strong credit profile and cash funds (to the best of your ability). 

Hope this helps. :)

You'll have to look at the overall data an current numbers to make that determination.

I know of some new build duplexes that may work your budget near Austin. Your assessment about cash flow vs appreciation for the 2 markets is accurate. Where would you rather be? Either will make you money in the long run.

Unless you go new construction, you may have a more difficult time getting an offer accepted using FHA vs conventional in this market.

Feel free to message me if you'd like to discuss more details. Good luck!

The value add of the ADU will vary based on a number of factors, including location, if it's permitted, size, features (bathroom? no bathroom? kitchen? etc) among other things. Typically I see the ADUs marketed along with the house as additional, separate square footage (eg - home is 2000/sqft, additional casita 400/sqft).

What I would consider more so than long term appraisal value add, would be what present day value will you get out of the ADU based on how you will use it. Are you going to STR it? If so, what do your projected numbers look like for that? Will you make your money spent back in the first 1-2 years and do you plan to keep the property longer than that? Are you using it as a home office, or gym, or guest house and if so, is the usage of that space worth the cost to build?

You will certainly add value if done correctly. Hope this helps!

Quote from @Agraj Sobti:

Hello Bigger Pockets fam,

I am a newbie out of state investor based off of San Jose, CA. I am looking to buy investment rental property in the Austin area. I am looking for an agent who has experience in the investment RE market (experience helping out of state clients is a plus), who is responsive, and has extensive knowledge of the area. Any recommendations are highly appreciated :) 

Hi! I'm a local Realtor and investor myself in the area. I have helped multiple remote clients buy investment properties in the area - some from BP such as yourself. Would be happy to connect and see if I could be the right fit for you on your investment journey. 

I agree with the other posters - we would need more details to truly provide a valid opinion. However, rents are much higher in Austin than previously and I also wonder if you could be getting higher rent, which may in turn allow for cash flow. If not, there is a need for mid-term rentals which could work better for you. Many options at play besides just holding at current rental rate or selling. 

Great question Brian! 

Since you don't need to sell to buy, I would look at what your overall goals are. You mentioned repurposing the funds from the sale into syndication or a turn-key rental. Why not just make you home the rental? That's the shortest path to cash flow now with as little effort as possible IMO. It costs to buy and to sell, so you'd be saving financially there and a time savings as well. Not to mention being in Austin, your appreciation gains will be strong if you hold. 

You can always watch and assess if you can cash out refi and use that equity towards additional properties as you go (based on your finances and the market rental rates)...or possibly sell later. 

Congrats on having some great options thanks to your smart real estate investment! I'm sure whichever path you choose will work out well. :)

I respectfully disagree with the above comments that it's always a red flag. You will 100% want to do standard tenant screening to verify credit score, income, employment, background check, etc. However, there are many jobs where income is variable (such as real estate) and some renters may feel a peace of mind and stability paying up front while they have the cash readily available. I personally know 2 different Realtors who have requested to do this for their landlords. They have excellent tenant criteria and references, etc - you would be thrilled to have them as a tenant. However, many landlords viewed them paying a year up front as a red flag as well and would not rent to them. In one situation, the Realtor had just gotten divorced and sold their home so he had a large lump sum and wanted to just pay for an entire year of rent so he could focus on getting back on his feet and have one less thing to worry about. It's not because he couldn't just manage that cash himself and pay it monthly. It was just a simpler solution for him personally. 

If the tenant passes all the standard screening checks with flying colors and can show POF, I would personally consider accepting a year up front.

I would recommend holding this money in a separate account for your property.

Best of luck with whatever you decide. Just hoping to share a different viewpoint on the situation. :)

Quote from @Zander Deckinga:

Quote from @Jordan Moorhead:

@Zander Deckinga have you gotten started househacking here yet? It's a great way to accumulate rental properties and reduce your expenses! It's also a great way to buy rentals for very low down payments.

 Absolutely, I plan on using house hacking to get started building this portfolio. Planning to buy my first unit this year and move to a new house hack every year after as my main way of building up multiple properties. 

 I absolutely LOVE your ambition and drive. That's a solid plan and I wish I had know about RE Investing at your age. I can only imagine the tremendous success you will have in this industry starting at a young age. Massive props to you!! 

Depending on where you want to be located, there are some solid househacking opportunities coming available in the next few months in the greater Austin area. Feel free to PM me if you want to chat. :)

From what I hear and read, CA is not as landlord friendly as TX is. Based on the numbers above, I believe we could get you at least the same (and most likely better) numbers here - less the OOS landlord fee. I would definitely self manage your TX investments yourself. I provide my landlord investors resources on how to do this as simply and stress-free as possible. I personally prefer the SFR rental market for long term appreciation gains and overall ease. That being said, I know of some solid duplex opportunities that are worth looking at. It really depends on what area you want to purchase in and your overall goals.

For myself, I would want to see rental comps, sale comps and as much data as possible to support whatever my plan for the property would be (LTR, STR, Fix and Flip). I'd also love to see the agent have a solid reputation and be a valuable resource to go to for anything I will need - especially a solid list of trade vendors I can call if something needs repair or cleaning. :)

If the agent can also show me their own track record and/or some successful client stories/deals that would lend itself to provide me with a higher confidence in where I was investing and the agent I was using.