All Forum Posts by: David Ivy

Thanks @Matthew Teifke! I've been following the news and rumors that Nimes Capital is planning to develop 79 acres of mixed-use near Oracle's new campus off of E. Riverside. Nimes purchased four contiguous apartment complexes off of E. Riverside a few years ago, which you can see on the map as "Catalyst One." This recent article has a great summary of "Project Catalyst." Have you heard anything about it that's not covered in the article?

@Phillip Battaglia

The Cedar Park Real Estate Investment Group meets tomorrow (10/5). It looks like you have interest in single family. So, it's good idea to learn about NW Austin/Cedar Park/Leander.

@Hunter Peterson

Congrats on the new position! I'd need to know much more about you and your situation to give detailed answers. However, here are some initial thoughts on your questions:

1. I second @Marian Smith and @Paul B. about your primary residence. In Austin, you need to be as close to your work as you can be while staying within your budget and living in an area that you like. Your future co-workers will be the best source on that. Ask where they live and what the commute to the office is like. For multifamily, you need to know your budget, the numbers that you're seeking, and the kinds of properties/projects you're willing to take on as a landlord. Once you have that, an investor agent like me can tell you what your options look like in the Austin area.

2. Owner-occupying or "house hacking" is the strategy I have seen most often among my first-time investor clients this year in Austin. Flipping activity here is still high and competition for deals is fierce. I wrote an offer on a flippable single family property in South Austin last week that had 30+ offers by the end. Straightforward residential buy and hold investing for immediate cash flow is almost non-existent, especially for single family homes. Currently, you almost always have to purchase at negative cash flow and have a solid plan to value-add and raise rent(s) ASAP after purchase. Lots of investors are still speculating on appreciation, and out-of-state buyers are still very active in Austin. Most of those who are still making buy and hold work are hustling doing their own direct marketing, driving for dollars, knocking on doors, talking to neighbors, cold calling, etc.

3. Property taxes are high in Texas, especially in the Austin area, but there's no state income tax. Check out the Texas A&M Real Estate Center and the Austin Board of Realtors for more information on the Texas and Austin area housing markets. Overall, the Austin area has been in an extreme seller's market for roughly the past 5 years, with less than 3 months of inventory in many price ranges, especially under $500k.

I hope this helps. Good luck!

@Jacob Pereira

You're right that, if @Andrew Parker rented a single family home, he could claim it as his primary residence if he lives there the majority of the year. However, the property still wouldn't count as owner-occupied. As I understand it, Austin issues Type 1 STR permits only if the rental is owner-occupied or "associated" with an owner occupied-property (e.g., an ADU, back house, garage apartment, duplex/fourplex unit w/ owner in another unit, etc.) So, I don't think that this is a loophole. Does that sound right?

@Andrew Parker

The city of Austin is no longer issuing permits for the short-term rental of non-owner-occupied single family homes. As @Greg H. said, the property owner could face serious fines for violating the ordinance. You can find out more about Austin's STR regulations here.

Is your employment history your only major hurdle? Have you had a lender (or preferably two or more) tell you specifically that it's a problem?

The August 2017 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. According to the report, the Central Texas summer selling season was the strongest on record:

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

However, there are signs of normalization on the distant horizon:

@Alissa Rodman

Just going on what I've read here, it sounds like signing the 5 month lease makes sense over paying $150/mo. extra for M2M. I strongly recommend that everyone have at least 3 months of expenses set aside as savings in addition to whatever is used for a down payment, closing costs, moving expenses, etc. Signing the lease will allow you to save more and continue to improve your credit. No matter what loan option you choose, don't count on any seller in the Austin area paying a *single cent* toward your closing costs (I've only had one this year). Why not? In short, it's a seller's market and they don't have to. In fact, in a very competitive multiple offer situation (pretty common), sellers often request that a buyer pay for the title policy, which is most traditionally a seller closing cost. 

Your only real reason I see for wanting to jump into the market now, as opposed to waiting to save more and improve your credit, is that you're worried that you'll miss out on a deal in the off-season. You're right that the Austin area market is seasonal and that you're more likely to find a good opportunity in the fall/winter than you are in the high summer season (see below). Sellers are usually more motivated, and there are fewer buyers in the market to compete with. However, whatever you'd find in the off-season may be more than made up for in waiting for a bit and qualifying for a better interest rate (lower payment and/or able to qualify for higher purchase price), being able to put more down (lower payment + better LTV and/or able to qualify for higher purchase price), and writing more attractive offers (pay your own closing costs).

I hope this helps! Feel free to reach out if there's anything I can do for you.

P.S. Here's some info. on seasonality in the Austin market. As an example, this is a chart of SFR sales volume by month over the past 5 years in Austin:

Here's the raw data for the above chart:

Here is the monthly median SFR sales price over the past 5 years:

Here's the raw data:

@Jack Henry

Congrats! Can you share who you used to refi out of the HML? Feel free to PM me or send an email to the address below.

@Brendon K.

This is right up my alley. What's your price range? Feel free to reach out directly.

@Chirag Shah

I agree with @Joe Scaparra. In Austin, I would focus on multifamily if my primary goal were to augment my monthly income with $10k/mo. in rental income over the next 10 years starting with zero properties. Is there a particular reason you want to start with single family?