All Forum Posts by: Scott Sutherland

Leverage! Especially with cash flowing investment properties, the risk is minimal and the return improvement (especially at today's rates) is significant. 

Personally, I try to keep all my rentals at 80% LTV. If they appreciate due to market conditions or improvements, I'll tap the equity to bump them back up to 80% to add another property.

Debt is a great thing when you have returns that greatly exceed the project rate of return. You're capturing the spread between the rate you borrow at and the rate of return (cash flow plus appreciation) of the property.

Welcome Brad!

I agree with the rest. Tons of information and great folks on BP.

If you haven't made it out to the Thursday lunch meeting at Big Daddy's in Austin, it's a great group of local investors. Highly recommended.

Message me if you need more info or would like to grab coffee sometime.

Thanks James.

I plan to focus on Vacation Rentals in this month's meeting.

Items we'll cover:

- How to select a property for vacation rental (aka short term rental use)

- How to maximize your rental income

- What your customers expect from your short term rental

- How to streamline the process to make it run as hands off as possible

- City Of Austin regulations related to STR

- Financial performance of our personal holdings

Look forward to seeing everyone there.

I have a client in Lockhart selling something similar. He put 3 double wide homes on an ETJ 10 acre lot. In that county we can have a maximum of 1 structure per acre based on the sanitation limitations. So 10 double wides would be the maximum. We also have deed restrictions limiting the structures to double wide only. so we can't add single wide units. 

His development Costs break out like this:

1. Used Double Wide $25K each

2. Delivery $5K per unit

3. Site prep $2500 per unit

4. Electric Pole $1500 per unit

5. Septic Install (1/2 unit). $4000 (we can use one septic tank for 2 units).

6. Water Lines, water meters, Road access: I think he has about $20K invested for the site.

7. Land Cost $60K for 10 acres

Challenges we've faced:

• Flag lot doesn't allow for subdivide
• Financing is tricky (20 year amortization and 75% LTV are typical

Renting them has been very easy. He's getting $800-$850 per unit and I've seen up to $950 per month in the area. 

78741 is another great pocket. Tons of development in the Riverside corridor and even the area near Montopolis has appreciation potential in the next cycle. 

Chris,

I'm a big fan of 78744 (SE Austin) for buy and hold. SFRs can be had for $120-$150k and will rent for $1200-$1400 per month. Not quite 1%, but just about as good as it gets in the city of Austin. We have a number of SFR and duplexes in that zip code.

Another option is to purchase in an area that is in the early stages of gentrification. Your cash flow would be marginal, but appreciation would be better as the flippers do the work bringing up the comps. $150k is a bit tough, but $180K is still doable in 78745 which is trending well.

Or you could venture out a bit into Round Rock, Kyle, or San Marcos to improve your cash flows.

Looking forward to sharing my experience on Austin rental property and operating real estate investment portfolios.

Hello Fellow Pocketeers,

I have a property for sale in Lockhart TX. Roughly 30 minutes from Austin, TX. Full disclosure, it's owned by a friend of mine and I'm acting as his broker. Please contact me if you have any questions. MLS#9573672. Discount Available for unrepresented buyers.

I'd like to attend as well. Location?

Our specialty is buy and hold single family and duplex and flip properties in the Austin area.

I'm also experienced in the area of short term fully furnished rental preparation and management.

Currently we are looking for assistance finding flip projects. We are looking to expand our relationships with local wholesalers and also looking to work birddogs directly.