All Forum Posts by: David Ivy

Austin and Dallas made the initial cut out of 238. If you've been following the Amazon HQ2 news, this probably isn't surprising. However, it's now definitely time for Texas investors to pay extra attention. From CNBC:

@Caitlin Bigelow

As @Mike Walker said, this can differ from market to market. However, I'm interested in this question and have made it a point to ask every Austin area appraiser I've met in the past year or so, "So, how do you handle an ADU's contribution to appraised value?" The answers vary, of course, but they have all independently said that they usually take 1/3 to 1/2 of the "main" home's $/sqft. and apply that to the ADU. This heavily depends on the quality and finish-out.

Also, if it's the only home with an ADU in the neighborhood (or otherwise no comparable sales with an ADU), appraisers can have a hard time proving value. I ran into that with a seller whose home is literally the only home with an ADU in a rather large neighborhood.

@Account Closed's very recent review of the Austin RENC (along with replies) in the thread here.

@Chirag Shah

I second what @Bryan Petrinec says about hiring trade-specific contractors directly when the scope of work is paint, flooring, and general handyman items. When you're on a shorter timeline and trying to get a property/unit on the market as soon as possible, a GC can be a big help. However, since you're going to be moving into the unit needing the most work, you don't have to be in a rush. You could get a couple quotes from GCs who can knock out everything for you in one go and compare that to hiring and coordinating the major items directly.

There are roughly two broad categories of GCs. I think of it in terms of what kind of trucks show up at the job after you've hired the GC. Are they the GC's own vehicles with his own crew(s) or are they the vehicles of other independent contractors/vendors (e.g., with their own logo) that the GC has hired specifically for your job? Almost all GCs are a mix between the two, but some have been going long enough and doing enough business to have at least one tradesperson directly employed in a few of the major trade areas (in addition to the GCs area of expertise, if there is one) and can handle common items like paint, flooring, and light remodeling in-house. I say this because your job is probably too small to warrant the extra expense of hiring a GC who is purely a project coordinator/manager. However, if you can find a local GC who has the crew to do everything you need "internally" with his own people, it could be worthwhile vs. managing & hiring out painting, flooring, and random handyman items separately. Get quotes and compare.

@Account Closed said, demand for contractors is high in Austin and those are the prices that good contractors can get away with, especially for someone who's trying to hit a specific deadline.  Also, good contractors with established businesses have quite a few expenses beyond paying laborers or tradespeople. They have things like insurance, marketing, tool, equipment & supply, vehicle, and administrative support costs. It still hurts to pay these Austin prices though!

@Jason Brown

Thank you for the fantastic review. I have not personally attended any of the Groves' "Big Live Event" seminars. However, I attended one of their regular monthly REIA/RENC meetings here in Austin several years ago, experienced a shortened version of exactly what you describe, and never went back.

@Jason Brown

Thank you for posting and sharing! I'm always fascinated by the paths people take in life and the role that real estate investing can play. I hope you continue contributing.

@Brandon Drayden

Congrats on getting your license! It sounds like you've done some good research already. Keller Williams is by far the best company for brand new agents in terms of training, support, and accountability. The agent culture at the two Austin market centers is totally non-competitive and supportive. Those willing to work extremely hard, take the training material seriously, and listen to coaches and mentors have no trouble doing at least self-sustaining business as a Realtor within the first year. There are also plenty of opportunities to join teams and groups of all sizes. If there's anything I can do for you, just let me know!

Full disclosure: I'm with KW in Austin, but I don't think anyone really disputes that there's no better place for brand new agents as far as training, support, and accountability goes.

@Daniel Taki

Two 3/2.5 units have leased through the MLS in that community over the past 365 days. It looks like rents are currently around $1,650/mo. for your unit, as Rentometer also suggests. One unit has been on the market 31 days asking $1,695/mo.

There are several apartment complexes with 1 bedroom and/or efficiency units for around $900/mo. (utilities not included) within a one mile radius. That will be your competition. So, you'll need to market well enough below those to overcome the objection, "Well, at that price, I might as well pay a little bit more to have my own place and not have to live with two others."

@William Kazenas

Your best bet will be to buy a condo unit and apply for a 'Type 3' STR licence. Austin won't allow you to do STR with single-family or small residential multifamily (e.g., duplex) because you won't be living there at least 51% of the time. Licenses for non-owner occupied STRs (owners live there less than 51% of the time) are only currently being issued in certain commercially zoned areas. There are also some other restrictions, even with Type 3 licenses. However, that sounds like the best fit for you.

You ask, "Will HOAs let you do this?" In short, no. Condo HOAs almost always forbid rentals shorter than 30 days; even a 6 month minimum lease term is pretty common. However, there are a few condo communities in Austin--some well-known, some under the radar--that do not have any lease duration restrictions in their bylaws or else have a history of the condo board deliberately choosing not to enforce those restrictions.

The November 2017 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. For the second month in a row, single-family home sales increased broadly across the Austin-Round Rock Metropolitan Statistical Area. However, single-family sales in the City of Austin were down again in November by 3.3% year-over-year (down 1.7% in October). The normalization trend continues:

Here are the basic stats on single-family home sales for November 2017 for the City of Austin and the greater Austin area:

Signs point to a strong 2018:

The ultimate outcome of the CodeNEXT process are still largely unknown:

Happy Holidays!