All Forum Posts by: David Ivy

@Adam Smith

Welcome! The best way to learn is to reach out to others in the Austin investment community. There are some good meetups. Get into the Austin investor Facebook groups. Almost anyone in the community is happy to grab lunch, myself included. Feel free to reach out!

Welcome Gavin!

It looks like you're interested in some version of buy-and-hold. Since you're looking to invest while having a full time job (at least for a while), you're probably going to use a property manager to manage your investments. I recommend reaching out to some established Houston residential property managers that manage the kind of property in which you're interested. Let them know that you're thinking about buying your first property. They can even help you find a niche that works for your goals. Ask them if they can refer you to some investment focused real estate agents. Good property managers and investment focused agents are a great source for leads on income property. They are also happy to hold your hand and answer your questions about investing in Houston, if they think you'll be a good future client.

I'm an investor and agent based in Austin, but I'm happy to help new Texas investors whenever I can.

Yes, you can do exactly what you describe. In fact, you've outlined the basic business model for many hard money lenders. Before doing this, you should speak with a good real estate attorney.

@Ray Gonsalves

Hello Ray! I'm an investor and agent here in Austin. Austin and the surrounding metro area are great places to invest in real estate. Competition for good deals is very high, though, especially for turn-key single family rentals and condos in the sub $300K price range. In that range, you'll very often get into multiple all-cash offer situations. I just had a client in a NINE offer situation in the Wells Branch area of North Austin. The numbers can get quite tight, as investors compete to see who will take the lowest return or lowest cash flow. As with anywhere, the best deals are those you can get before they hit the market or those that require a little work to generate top market rents. So, it's important to have a someone knowledgable on the ground to do the legwork.

If you have any areas of Austin or particular types of property in mind, I can give you more info.

Feel free to get in touch!

Congratulations on your first rental property, Sonny! I assume you own the property yourself, not through an LLC or some other legal entity. Is that right? Either way, if you contact me directly, I'd be happy to put you in touch with some good insurance agents in Austin. I also second @Kelby K.'s suggestion to contact your personal agent first. You can get multi-policy discounts. However, it's always worth shopping around.

Hello Daryl! 

I can't speak to your ARV or rehab estimate without knowing the particulars of the property. However, in analyzing the deal, you should always factor in "quiet costs." When you buy, you should factor in title insurance (if the seller doesn't cover it), survey (if necessary), inspection costs, appraisal (if your lender requires it), and other misc. closing fees. There are also holding costs, such as property taxes, insurance, utilities, and maintenance (e.g., yard service). When you sell, you will pay title insurance (most likely), real estate commission (3% of the final sale price to your agent & another 3% to the buyer's agent), buyer requested repairs, and other misc. closing fees.

You would probably be looking at a hard money loan. Some hard money lenders will lend 100% of acquisition and rehab costs on a deal in this price range. With hard money loans, you're looking at 12-14% interest and 3-6 origination points, with interest-only payments for the term of the loan. With a $6,500 rehab, it appears you're looking at a very quick turnaround. So, be sure your lender will do loans shorter than 6 mo. and/or will not penalize you for paying off the loan early. If you finance the deal, be sure to factor that into your costs.

I hope this helps! I'm in Austin, but I have a fourplex rental in Killeen a few minutes from Ft. Hood.