All Forum Posts by: Daniel Tisdale

@Santi Anso thanks for the quick reply! Can you expand on how you would compare staying put and buying another property or turning my current one into a rental?

Hi all,

I'm currently 29 and I've owned a house in Central Austin for about 2.5 years now. Being in Austin, it's appreciated very well over the last two years and I've just refinanced, which makes my monthly payment lower than what I could reasonably rent the house out for. I've been considering turning this into a rental and purchasing another one with the hopes of doing the same process in a few years.

I'd love to get any feedback or thoughts on this idea and see if anyone has a better idea of what to do with my extra funds.

Thanks!

Also interested in both the real estate book club and the mastermind group! Please send me details if you have them. Thanks!

@Doug Watts Hi Doug! I'm wondering if there is an upcoming event soon or if this is the last one that took place. Thanks!

@Lexi Teifke I'd definitely be interested in participating in the next one and live within walking distance of Radio, so it would be very convenient for me, thanks!

Thanks to everyone for all of the responses to this post and all of the tips and helpful information! To give an update, I am in the process of working on getting long-term individual bedroom rentals for the 3 bedrooms in the home and will likely be able to cashflow a couple hundred dollars a month positively if I go this route, which is really exciting! I am also feeling confident about this deal because of the fact that it is an off-market deal, so I will be coming in with about 50K of equity already built into it. Will keep everyone updated on the progress of this. Thanks again for all of the helpful tips and information that has already been provided!

Thanks for everyone for all of the responses and feedback! A couple points to clarify:

I am luckily fortunate enough to still be able to save a few thousand dollars a month given my current work situation, which greatly offsets this as being a money drag and allows me to still save a decent amount each month to pour into additional cash flowing properties. 

I believe that this property is below market value, which also makes me feel that we could exit if need be in a few years. The other similar properties in the neighborhood are selling for around 50-100K more than this property, so I feel comfortable about getting a below market deal. 

To give some more background on the other 2 co-investors, they are my mother and brother. After doing a little more research into market rents and different options including short term rental, rent each room out, etc. Developers have been swooning over lots in the neighborhood and converting them into $500-600K duplexes very quickly, so even if I have to hold onto it for a few more years, I should be able to weather the storm of a potential downturn with my cash reserves.

I believe that we could get very close to breaking even in the first year and as rents increase, I expect there to be positive cash flow very shortly afterwards.

@Steve B. that might be true of some areas, but definitely not true of Austin overall. We just hit 400K for median home price and my neighborhood especially are seeing homes sell for more than 500K now because of the proximity to downtown.

@Joe Villeneuve thanks for all of the insight and information into that! 

With the area appreciating around 5-8% per year, I feel that I could sell it if it became that large of a financial burden. Not sure if this helps out at all, but there are 3 co-investors on the property, so the financial hit would be minimal. Do you ever see a reason when going for an appreciation play makes sense over strictly cash flow?