All Forum Posts by: Rick Reeder

Interesting development coming in Leander - should drive property values up when it is complete.  https://www.bizjournals.com/au...

Welcome to BP, @Lei Lu!  You have a lot of company - both in terms of folks looking to invest in real estate - AND folks looking specifically at Austin.  I wrote up a summary a few months ago, and the trends are even stronger now - you won't find cash flow unless you find something miraculous off-market.  BUT all of the fundamentals that make Austin a GREAT appreciation play (if your capital can be patient) are still there and growing stronger.  

https://layer3realestate.com/i...

If you're willing to look a bit farther out (Liberty Hill, e.g.) you could find a new home that qualifies for USDA which can be 0% down.  I read "Beat the Street" by Peter Lynch back in the 90s (yes - I'm old), and he recommended home ownership as one of your first investments.  It's the way most Americans build wealth.  I'm a huge believer in buying vs. renting.

I used Aceable for my Legal Update this year (free through ABOR) and the user interface was great.  I got my license a few years ago via the cheapest online place I could find, and I would spend the extra money on something more well-done. :)  Champions School also has a great reputation.

You can still house hack in a SFH if you rent a room or two. An 80-10-10 is 80% primary mortgage, 10% second mortgage (often for a shorter term and slightly higher rate), and 10% cash down. It's a way to maximize leverage and avoid paying Mortgage Insurance. Borrowed money is viewed as leverage and interest can be tax-deductible (depending on your situation) and insurance is viewed as pure cost (unless you become destitute *and* your property is under water).

@Elva S. You're right on that there aren't any 1% deals around Austin right now in MLS. If you can have negative cash flow or put more than 20% down (or move here and house hack), odds are very strong that you will have excellent appreciation and be very happy with your Austin investment. However, if you're looking for a cash-flowing rental with 20% in the near term, you will not find it on MLS (or Zillow, etc). Too many house hunters and investors chasing too few listings. We have about 12 days of supply in the Austin city limits right now.... a balanced market has about 6 months of inventory.

I do believe strongly that Austin will continue to thrive and appreciate- the fundamentals are all still there!

@Jim Piety safe to assume you're planning to move in, since you're throwing out a 3.5% down payment option? House hacking, in other words? The best choice really depends on a number of factors - your goals and personal financial situation. If it were me (and I am making a *lot* of assumptions about you, here) I would put down the minimum I could to get to cash flow neutral with renters. If that were less than 20%, I would do an 80-15-5 or 80-10-10 to avoid PMI and take advantage of the low rates. If you have cash left over, put some in reserve for capital expenditures and deploy the rest to the next investment. In Austin, assuming the hits just keep on coming, you may well find yourself earning double-digit appreciation the next few years and if you can raise rents, pay down your second or start cash flowing.

Hey BP Hive-Mind,

I have a buddy looking for a commercial property for a 1031 he needs to identify by mid-March. He wants it to be in the Austin area.

Budget up to $3M. Connect or message me if you have something worthwhile!

I normally use Nunnallee Inspections.  Quick and thorough.  In my experience none of them "specialize" in plumbing, electrical, etc.  By design, they are generalists.  They will know more than you or me about all of the systems that make up a house, but they don't know as much about plumbing as a plumber or foundations as an engineer, etc.  

@Stephen James - why two inspections?  Second opinion on everything, or something specific like wood-destroying insect inspection that the first inspector wouldn't cover?  You'll pay $400+ for an inspection, so if you're worried about paying for option, I'd say get a great inspector and put some of the $$ you'd use for the second one towards option payment. Rule of thumb around Austin is .1% of purchase price for option and 5-7 days for option.  So if the offer is $500K, I'd likely offer $500 for a 7 day option.  You should be able to schedule an inspection for 1-2 days out, and get the report back the next day.  There are websites (I've heard Punchlist, but haven't used it) where you can upload the whole inspection report and get repair estimates back.  In a market as hot as Austin you need to compensate the seller for taking the home off the market and you want to be competitive, so if you feel like this is the home for you, don't lose it over one or two hundred bucks.