All Forum Posts by: Joseph Weisenbloom

Cashflowing in Austin is tough but can be done. Best strategy I have seen is buy fixer upper single families within proximity of downtown. Rehab everything with your own labor to keep costs down. Then rent out the bedrooms for $700+ per month. Really only way to make money in this town is to hustle. If you were hoping to find duplexes, triplexes and quadplexes you will be sorely disappointed in Austin. We have an outdated land code that outlaws construction of smaller multifamily and favors single family only.

I hear rumblings that commercial real estate loans are in bubble territory right now. If we have a protracted downturn and a commercial loans start defaulting en masse will that spill over into residential real estate? @Lesley Resnick @Chris Mason

@Michael Ablan @Dane Fitch

Thanks for the input guys. At this time it seems like lending is drying up in anticipation of defaults. Any guess how long this may last? Weeks? Months? 

It seems like the FED is doing what it can to grease the gears of the economy but how effective will it be? 

@Eric Bilderback @Chris Mason Thanks for the insight guys. I only see a nationwide downshift in real estate prices if a few things happen at once. 1. With 30% unemployment there will no doubt be a lot of people not paying their mortgage and being foreclosed upon. Not sure if the stimulus package will save them. This will result in more houses coming onto the market. 2. If loans become locked up for a long period that will slow down people from buying houses and also slow down investors from aquiring any distressed houses that come on the market. This will be a downshift in demand. 3. The logistics of home buying usually require folks to visit the property for sale. Currently people are not leaving their house so thats out of the question.

Increased supply and lower demand seem to indicate potential lower prices. Not sure if this will play out more regionally or nationwide. We will see how this unfolds and how it affects real estate.

Any lenders out there have any insights?

@Jay Hinrichs I understand that this is going to be a short term tightening in lending. The question is how long will this go on? I assume the longer lending is cut off the lower housing prices will go. Being that it is real estate it won’t happen overnight. This could take up to a year to truely work its way through to lower prices for investors.

Thoughts?

Been a whirlwind few weeks here with everything going on. I wanted to ask the lenders out there and those investors looking for loans what is the current state of real estate lending? Rates are low but are lenders making loans? Conventional and nonconventional loans?

Real estate runs on loans so if the lending market is drying up that seems to be indicator of less available buyers, lower housing prices and lower demand in many markets.

P.S. Im not looking for a loan just trying to keep my finger on the pulse of the market.

@Paul Koger Just my 2 cents I would buy where you are going to be long term. Austin is a much nicer place to live but is a terrible place to invest. Its just way too expensive. It is possible to cashflow here but it seems to be a herculean effort. you need to be very hands on in ATX to make things work. From an investment persepctive DFW has much more opportunity than Austin. You can also be closer to your properties allowing you to self manage. Why buy an overpriced duplex in Austin when you can buy multiple duplexes in DFW. I’ve invested in both markets and so I am firmiliar with whats out there.

I prefer to have 6 months reserves normally. Luckily I sold off a bunch of dud properties a few months before Covid popped off so I’m sitting on a lot more than that right now. Currently dealing with the very nice dilemma of deciding if I’m going to buy stocks on the low or wait for the next golden real estate opportunity. Or some combination of the 2.

Oh man what a thread this is. The ole pull yourself up by your bootstraps people vs the give infinite patience and free rent people. In a perfect world everyone should have reserves to prepare for an event like this, I know I do. That being said landlords and tenents alike are guilty of being unprepared. No one thinks ahead, its all about instant gratification. 

I had a tenant that complained about the plight of the working class and living paycheck to paycheck. This tenant also had already visited disneyworld 4 times that year.

On the otherside I see landlords that are so concerned about aquiring, aquiring, aquiring that they stretch themselves super thin with no reserves.

Two wrongs don’t make a right. The number one thing missing here is staying humble. Never think you are untouchable.

In these trying times we must be vigilent of our own survival but also aware of reality that not everyone is prepared as we are. Some people are born with superior brains and superior parenting and superior multigenerational momentum. Some people were born with nothing. By nothing I don’t mean no money but no sense. They have been programmed wrong from day 1. I know as a hardworking, self reliant and self made person it is hard to respect that reality.

Don’t be foolish. Get your rent money from your tenants. If you can’t, also realize when you can’t get blood from a stone. Make the best of the situation at hand. Have patience and make arrangements but remain firm. Let this recession be a learning experience. Most of all stay humble. Next cycle you will be prepared.