All Forum Posts by: David Ivy

@Jacob Pereira @Ethan Anderson

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

Here's the data:

@Jim Robertson

I think I have someone who can help. I'll take this to PM to talk details. However, others might like to know that there's at least one portfolio lending bank in Austin that can do up to 80% LTV on a cash out. They prefer at least a 1.25x debt service coverage ratio (125% of NOI), but look at it on a case-by-case basis, since cap rates are so low in Austin. This is the best I've found. Most banks in Austin will only do around 50% LTV, if they even do these kinds of deals at all.

If anyone ever wants me to put you in contact with a lender, just let me know!

@Sal Zafar

Yes, any of the three commercial lenders I mention will lend for an 8-door (or more) multi-family property.

@Kyla Neill

I kick myself all the time for not house hacking when I first moved to Austin with my wife 11 years ago. I think that, all else being equal, it's among the smartest financial moves someone can make. If the property already has a tenant in place, many lenders will even allow you to use that rental income toward qualifying for a loan, so long as you can provide an operating income statement and current lease. I can put you in touch with a couple local lenders if that sounds interesting.

@Kyla Neill

If you haven't already spoken with a local lender about your investment plans, you should do that immediately. You need to know exactly what you can afford. For non-owner occupied multi-family property, a conventional lender will require 20-25% down on each. In 2016 so far, the median duplex in Austin sold for $316,500. So, if you were buying the middle-market, median duplex in Austin this year, you'd need $63,300 to $79,125 to put down. Of course, there are plenty of duplexes in Austin in the $200s. This is just to give you an idea. Let me know if there's anything I can do to help!

@David Sray

Did you end up buying the home? What did you find out?

@Jim Robertson

In my experience, the best banks for everyday business checking and savings are usually not the best banks for building a commercial lending relationship. We use Frost for our business checking and savings. I agree with @Carrie Hiner that UFCU is a good option too.

However, when it comes to commercial lending, you want a local bank that offers competitive terms, moves very quickly, and takes the time to understand the particular investment or deal you're purchasing. I've found that Frost and other huge regional banks are more risk-averse and, thus, offer less competitive terms. The internal bureaucracy and lending procedures in place at such banks tend to bog everything down on all but the most vanilla and straight forward deals. They also tend to have very rigid and generic underwriting requirements that prevent them from considering many factors you may think relevant to your particular deal or situation. This is what I've found at Frost, though they're still great for my business checking and savings needs. I haven't dealt with UFCU in this capacity. However, they had trouble on a mortgage for my personal home that a smaller local lender handled with ease.

I recommend you meet with a few local commercial lenders. You'll see just how different they can be, even when looking at the same deal. Broadway Bank, Sage Capital Bank, and Southside Bank are all a good start. I can put you in touch with the Austin President of Broadway and the local VP of Commercial Lending at Sage and Southside. Let me know if you'd like an introduction.

@Kelli Thomas

I'm happy to have the team leader at KW Bothell reach out to you. He can help you with any questions. If you're interested, just send me an email. You can find it on my profile page.

@Austin Youmans

The same offer goes to to you, if haven't already reached out to the KW market centers in your area.

@Nicholette Menzel

Welcome to BP! You're right that the Austin buy and hold market is tough at the moment. Things are currently pretty much the same in the suburbs. Click on my profile and read some of my recent posts about the Austin market.

How did you find your current rental?

@Account Closed

Hi Jim! Your assessment of the buy and hold market in Round Rock is spot on. Five years ago, the median SFR in Round Rock sold for $176,950 and rented for $1,300. That's a 0.73% rent-to-value. Now, the median SFR sells for $260,000 and rents for $1,600. That's a 0.61% rent-to-value.

So, over the last five years, the median Round Rock SFR has appreciated 47%, while the median rent has appreciated 23%. The median home price has outpaced median rent by a factor of two. Rent-to-value in Round Rock has decreased 20% in the same period.