All Forum Posts by: David Ivy

@Bo S.

I know at least one mortgage lender in Austin who can do 15% down on non-owner-occupied single family. I'll send the information in a colleague request.

@Sal Zafar

I'll have one of my contractor contacts reach out. I'll send you a direct message with his info.

@Daniel Taki

I saw that you have long-term capital gains in your calculation. This is for a primary residence, correct? If so, then the IRS allows you to take $250,000 ($500,000 if married) in tax-free gains when you sell a home so long as, during the 5-year period ending on the date of the sale, you've (1) owned the home for at least two years and (2) lived in the home as your primary residence for at least two years. You can find more info. here.

I haven't really looked over much else. That's just the first thing the jumped out.

@Prasanna C.

I agree with @Cody Cook that, all else being equal, a traditional single family home will appreciate more than the most closely comparable condo. If I'm recalling correctly, Scofield Farms Meadows are completely detached homes within a condo regime. In this arrangement, you are usually responsible for the exterior of your home, just like a regular single family home. However, the association will usually take care of common grounds maintenance/landscaping and limited common elements like fencing and some porches or patios. So long as the condo association is run well, the homes should act on the retail market much the same as a regular single family home with a small yard and an HOA. I can pull the Scofield Farms Meadows condo documents if you'd like to take a look. Just send me a message or email.

@Diane G.

Check out my very recent posts here and here. I hope they help with your question!

@Taylor Patterson

My thoughts on residential multifamily investing in Killeen are somewhere between @Joe Scaparra and @Brian Adams. As I think you know, I have a fouplex there that is doing pretty well. I purchased for under $150k and am grossing $2,300/mo. in rent. All my other properties are in the immediate Austin area. I wanted to get something outside of Austin to have a little diversification and am continuing to look beyond Austin. The multifamily numbers in the Killeen area in general are much better than anything you can currently find in the Austin area. However, for the number of properties that I have, I'm not currently comfortable owning anything more than one multifamily property in Killeen.

@Bryan Petrinec

Welcome to BP! You're not missing anything. Almost every residential single and multifamily property being sold in the immediate Austin area is cash flow negative if purchased with a conventional loan at 20% down. It has been this way for at least a couple years. Rents have not kept pace with the incredible appreciation. Also, there are plenty of people speculating on the upward trajectory of the Austin market who don't care much about cash flow so long as the property doesn't hemorrhage cash. You'll also find competition from 100% cash buyers all the way into the $300k price range. The rare quality (for Austin) deals that do appear on the retail market (e.g., Austin MLS) will get multiple offers the same day.

Yes, there are opportunities to cash flow on a conventional mortgage, but even then, the numbers are usually so thin (e.g., $50-100/mo.) that tenant trouble, a large maintenance item, or unplanned capital expense will put you into the red for the year. And again, if those "thin-but-positive" opportunities are on the retail market, everyone else will be jumping on them too.

The investors I know having the most success right now source their own off-market deals by deploying some pretty sophisticated and very expensive marketing techniques--we're talking multiple thousands a month on a consistent monthly basis. It's also their full-time job/career, and some even have a small team in place. Other people making it work include house hackers or investors who work the suburbs and even far out (e.g., Killeen, Temple-Belton, Taylor, Elgin, Buda, and Kyle).

I've been investing in Austin for the past 6 years. I used to buy turn-key right off the MLS. Then I started having to do some rehab/upgrading before the rental numbers made sense, but still on the MLS. My last few deals have either been outside of Austin (e.g., a fourplex in Killeen) or brought to me off/pre-MLS by a fellow Realtor. I've also had to go all cash to compete in the sub-$200k price point.

I look at wholesale deals on a daily basis. Every now and then, there's something pretty good. Unfortunately, the majority of wholesale deals are not much better than retail.

You're not being too picky. This is the current reality of the Austin market. You have to know exactly what you want and be disciplined enough to be patient. However, don't wait for an opportunity to come to you. Get active! Meet and network with as many people in the industry as possible, including Realtors, other investors, lenders, contractors, and insurance agents.

@Kristal Pecherski

I'll send you a PM or email with some contacts that can help. However, before you move forward, I wanted to be sure you've looked into whether your property meets the latest regulations on Accessory Dwelling Units enacted by Austin City Council in November 2015. For example, your lot has to be at least 5,750 sqft. (or roughly 0.132 acres). You can see more info here. The full ordinance is here.

*The post's title is a mistake. This is the June 2017 report.*

The June 2017 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. As I pointed out in an earlier BiggerPockets thread here, the Austin market slowed in the first half of 2017 and is showing signs of normalization:

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

Affordability is applying downward pressure on the market, as more and more buyers are priced out by Austin's rising prices. Homes are still appreciating, just not at the same rate as we've seen over the previous years:

According to the Federal Reserve, the Austin area's job and economic growth is slowing (see here). At the same time, increasing housing costs have actually created a net loss in income for Austin area residents (see here). Guthrie concluded:

You can see the complete report from ABoR here.

@Josue Vargas

I have some great Realtor contacts in SA. I'll send you an email.