All Forum Posts by: Curtis H.

@Saberian Younger

Where in the world are you buying properties for $35K in Austin? Or are you in another area? At the numbers you are giving, of course it works because the taxes don't kill your cashflow. The problem is, once the numbers go up to standard SFR in good areas ($200K range) then the percentages start to catch up with you. So once Austin gets to the point where the average home is in the mid 200s, taxes are going to be $10K a year. That's $833 per month just for taxes!

Until that changes, it's almost like you have to invest in the lower end areas to keep those percentages down.

@Jay Hinrichs

You are really starting to talk me out of Austin... :-) 

I love the place, my family is still out there, so there is an emotional attachment, and I know I'll be out there to visit and for work. I am interested in this question about where as well as I have the luxury of traveling the whole west coast for work, so I can look at properties in those markets (Scottsdale, Sacramento, Texas, Oregon, Seattle, etc). Your neck of the woods has rehabbers crawling out of every nook and cranny. My goodness when I went to Portland all I could see were cranes. 

Jay Hinrichs Dem foundations doe!!! Yes yes. I forgot all about the soil issues there. The house I lived in located in Round Rock could not grow a tree in the backyard. I tried multiple spots and they all would die. They knew me by name at Lowes as I kept buying trees every month trying again and again. Then I had a short sale opportunity that would have been a good deal if not for that $10-$15k foundation estimate. I keep reading about Alabama every year and it seems solid I must say.

@Dan Burstain 

@Account Closed

As my teenage son would say in a tweet...

Dem property taxes doe...Ha ha. 

In all seriousness I own a couple rentals in Round Rock from when I lived there and the taxes on that home I bought for $150K are only $1K less than my home in Socal worth over half a million. It just MURDERS cashflow. It does. I understand Round Rock is not Austin, and the appreciation levels in Austin are much better, but I feel like you would be investing on appreciation mainly. I would love to be proven wrong, but I feel like Austin is the baby brother of Socal now. Low cashflow unless you find killer deals, heavy competition from hedge fund money, etc. However, if you can buy when it's hot (like now) at 80% of value, then chances of you making a killing in ten years is very high.  I want to buy probably 2 of every 5 rentals in a market like that, but the other 3 will be based on solid cashflow numbers. 

I do feel like Austin is going to literally explode a second time though. They aren't done.

One other question I have is usually when they have you fill out paperwork they ask your primary address (which would be the same address I'm refinancing) however they will clearly see I have no loan attached to this property. They won't ask questions about that? Will they ask if I'm renting? I assume plenty people have refinanced a Sub2, but it seems if I openly answer "Oh I'm already paying the mortgage, but it's just not in my name right now", that could lead to all kinds of weirdness. If I say I'm paying rent there, not sure they could verify or not or will ask for a landlord name or something.

I just remember when talking with the bank during the whole Sub2 process they kept asking probing questions like "what is your relationship to the owner?" and "Do you know if he is renting out the home?". I would always say "I'm just trying to help him out, I don't know details". But I always got the feeling one wrong answer and I was screwed.

@Wayne Brooks

I wasn't aware of that so thank you for that insight. I was purposely being conservative with my home value so that's ok. Home could easily have $50K more in equity than I stated, as I've added a permitted bathroom to the home since I've been in it, as well as opened the floorplan.

@Jeff B.

That's what I would think,  but I have read that if you claim it, and can prove you paid it, you win. 1099 or not. That could be false, but I have read it more than once. No matter, I'm not doing it. Nope nope nope. Nobody can talk me into it!! I'm on the cusp of greatness. :-)

@Nicole Flakes

Good luck! My first call I was all kinds of excited and terrified at the same time. Now that list that was calling me was a list of people over 55 with 40% equity or better in their home, and had been there longer than 7 years. So these callers were just curious what I would pay them for their house. They all were unmotivated. Some said call them back in 2 years when they retire, etc. 

Then I mailed pre-foreclosures and that was when the funny calls began.

@Nicole Flakes

You didn't miss anything, it was just me rambling and getting off track. I sent yellow letters to people in foreclosure to try and find my first creative deal, and find a home to live in at the same time. It works I'm living proof. The area I live in I could not afford if I had to buy this house through a realtor. But creatively, I made it work by paying the past due amount and stopping the foreclosure, and taking over the home Sub2. Fast forward to today and I now have $200K in equity because the area exploded in value. I am using this to jump start my 10 year plan.

@Joe Splitrock

You bring up some really great points sir. You also happen to have the best last name for anyone living in South Dakota. I just lived in 2 different complexes before moving into this home, and I have to say, the OTHER tenants was my number one motivation to find a home and get the heck out of there. So in a way I thank them. I wouldn't allow my wife to hang a single picture on the wall at that place. We were there almost 4 years. I said, "this place is NOT home, and I don't ever want to get comfortable here". It worked. I had my kids folding hundreds of yellow letters I made on my computer and stuffing them into envelopes. When someone would call they would get so excited and we would play back the angry voicemails over and over and laugh. Good times.