All Forum Posts by: Joe Scaparra

@Nathan Gesner,  I don't mean to be a pain in the ***, but your logic makes no sense.  Your assumption one of the renters brought in the bed bugs.  Ok, I can go with that as we can most likely eliminate the Landlord did not bring them in.  Check!   Ok, BUT which renter brought them in.  Hey by your logic both did because they travel for work.  OH REALLY!  So all tenants who travel for work have bed bugs?  Now even if one of the tenants KNOWS he/she brought them in, unless they confess, where are you going to place the liability.  THE LANDLORD.  The landlord placed the tenant in the room.  If it was just a one room dwelling then YES I am with you the tenant is responsible.  BUT until you can ACCURATELY place blame on which tenant: the LANDLORD is responsible.  I will take this one step further.  Say only one tenant traveled for work.  OH, by your logic YOU got your man, its the one who travels for work.  Hey anyone out there have tenants who got bed bugs but don't travel for work............how does that happen?   You can get bed bugs from an overnight stay at someones house, hotel, or sitting on someones couch.  Again, I can probably buy that one of the tenants most likely brought them in but short of hard evidence of which tenant; the LANDLORD is responsible.  Cheers.

@Ethan Wicks, Possibly.  If it is considered repairs absolutely.  If it is renovations you would want to discuss it with your tenants and get them to buy into the rehab.  You may have to make some concessions if it becomes a big inconvenience to them.    If the repairs/rehab is on the exterior I would think you would have little issues to get that work done.

@David Quinn, good luck with this one.  It is obvious by your post that you don't have much experience with bedbugs.  This one should scare the hell out of you, as bedbugs are very difficult to get rid of.  You just can't treat the individual rooms but the entire home to be effective.  

Your situation is complicated because you rent out by the room.  You are liable to the others tenants for each renter you place in the unit. As you alluded to it is impossible to determine fault so therefore you assume the liability.  I don't rent by the room so it is easy for me.  If they didn't have bedbugs when they move in they own the infestation.  They also pay to get rid of them too.  Like you said the unit is going to get treated when they are gone, but bedbugs are into everything including their belongs that they may take with them.  Even if you get them out of the unit they may bring them right back with their suitcase/clothes when they come back.  Since they are in both bedroom, they probably are in the couch and even in appliances in the house.  Generally you treat the unit with high heat to kill them all and it is not cheap to get the correct treatment.  

@Kole Moore let me pivot slightly with your question and add something that I think you should consider. Since you are getting a Civil Engineer degree you should be able to find a stable, good income job. If that happens to be in Austin, using your VA loan and buying a duplex is a great option to start your investment journey. @Jordan Moorhead mentioned HOUSE HACKING can work in Austin.  You will still be somewhat negative cash flow but you will also be living in Austin cheaper than people renting.  You will also be in the market participating in Austin's appreciation.  If that interest you, Jordan is doing that very thing now!  Pick his brain as I am sure he can give you some good insight and expectations.  

At the moment, some sort of house hacking strategy is in my opinion the best route to take, especially as a new investor in real estate.  Cheers.  

@Stephen Stokes WoW!  Good job! Tell us about the property you are closing on that meets those data points.  Property your closing on is positive cash flow, no money down, not even the closing cost!  I am impressed and anxious to hear the details.  Your first post on this thread tells the investor he has to put down at least 30% to cash flow, yet now you challenge me and basically saying that no the down payment is not that important?  A little confusing here.

The OP is thinking about moving to Austin.  Why?  My guess it because he is hearing about the investment opportunities in Austin.  Sounds like he is flexible and can move anywhere.  I don't know the complete details but sounds like the driving force to move is real estate, not a job or family move.  With that and the parameters he outlined, I would hate to mis-lead him in moving to Austin only to not find what he is looking for.  Just keeping this discussion in focus.  Cheers.

@Stephen Stokes Right on brother, prove me wrong.  In all of the Austin proper do I think that there is a Unicorn out there.  Yeah probably, maybe, ok certainly so.  When absolutes are used they usually are not TOTALLY correct.  If you are going to make your living finding unicorns good luck.  

Again don't miss my message. Long term, short term, mid term is not the discussion from the OP. I will continue to narrow this to the data points given in the 1st post. VA loan, sufficient cash flow, Austin. Go find me that property that fits those data points. Ready set GO!! Cheers.

@Cecile Silver since you lived in the home for 2 years out of the last 5 years you are able to receive tax free gains up to $500,000 since you are married.  It doesn't  matter that you rented the house out for 9 months.  So you now do not have any capital gains to declare.   

@Tyler Harrel  Also living in Florida has no bearing as FL is a state tax free state.

Ok lets call a spade a spade, shall we. Let's begin by answering the OPs question by using the DATA he has given us. Start with two keys in his post. VA LOAN and create sufficient CASH FLOW!

VA LOAN......NO! NOT IN AUSTIN and NO on SUFFICIENT CASH FLOW!!!!!

Why do I say this. The advantage of a VA loan is ZERO downpayment!!!!!! In Austin, zero down gets you VERY NEGATIVE CASH FLOW! Yes, anyone out there want to argue this??????? If you have 20-30% down then you aren't using a VA loan. My bet, a VA loan is being used because there is no 20-30% to put down. No problem....Austin is just not your best bet!

Now don't go changing the data.  Austin may be a GREAT place to invest, just not for Cash Flow at zero down.  Yeah if you have no problem with holding long term, I think Austin will be a good capital appreciation play.  But if everyone has no problem with holding long term then we would never have any foreclosures would we.  Cheers.

Our tax office assess each property each year.  Your's probably does too.  But if not, then look at what a home in the neighbored recently sold for and see what they assess the land.  If you have a CPA do your taxes or know a realtor, I am sure you can get the answer you need.  

@Vivek Sapre  Austin has been annexed by CA, no longer in Texas.  As far as sad style living, can't be worse than what everyone is fleeing in CA, LOL.   Austin is like CA as you can't cash flow positive unless you put a lot of $$$$$$ down.    If you are hell bent on investing in Austin, don't expect a positive cash flow!!!  1% has come and GONE!!!  

Best place to invest in Austin.........really?  The best place to invest is where you find the best numbers.  Forget specific locations, school districts or how the neighborhood looks.  Why?  Because ALL AREAS in Austin are improving in quality and tenants.  POPULATION and JOBS are INCREASING causing increase housing prices and rents!    What that means is that marginal tenants are moving out of Austin because they cannot afford the increases.    Why do schools not matter?  Because tenants could give a rats *** about them.   Neighborhoods don't matter because investors are coming in buying the cheapest run down pieces of sh** and tearing down and rebuilding new multi-family if possible.  That in of itself raises the value on the entire hood. The best type property for any investor that priorities cash flow will be looking at multi-family.  The millennium's due to college debt and society trends are delaying house buying, marriage, and child rearing!  So they need/afford small units......duplexes are the hottest commodity in Austin for a reason.  I have 10 units in the Austin MSA and NONE OF MY TENATS EVER ASK ABOUT SCHOOLS.  List a property for rent and watch the circus!  I just had two turnovers this month, one in Round Rock and one in East Austin.  I jumped rents from 1200 to 1500 and 1325 to 1500 and I am still under market.  50 inquires each in less than a week.  

Now back to Austin real estate investing.  More and more investors especially those from Texas are reluctantly resigning to the fact that appreciation has to be more of a strategy than in the past.  CA investors are used to this and is no big deal.  Right now all boats are floating as the tide is coming in big time.  Lower quality homes will hold their value better when the down turn comes but I am not forecasting that in the near future.  SHFs selling north of $600k probably have the greatest risk if a downturn happens but I think we are at least 2 years away from that happening in Austin.  

The latest trend is investor's buying duplexes and rehabbing them and converting them to condos; selling each side individually.  Forced Appreciation is a real viability strategy right now.  That is why duplexes are so strong right now.  The renter's market is ON FIRE as well.  Lots of Apartments being built, but the homes subdivisions are favoring mid to large homes, ignoring the starter homes sector.  Thus favoring those who own rentals!!!!!   Just one man's opinion, Cheers!