All Forum Posts by: Thomas O'Donnell

@Thomas O'Donnell

Hey Thomas I think it truly depends on the type of investment you are looking to acquire... 

If you are looking for more long-term holds I would definitely ask questions about what neighborhoods are best for long-term investing, what are their opinions on the future of the market, and also what appreciation has looked like recently as well as in the past. If you are going to look for shorter-length investments I think the questions are fairly similar but with maybe more focus on the cashflow aspect of the investment. 

When it comes down to specific market questions I think it is good to know:

- % of renters

-Average home price

-Average CoC return

-Average appreciation

-Average Rent to Value ratios

-Top employers

-Population Size

-Average Income

-Property Taxes

-Income Taxes

-Average Monthly Cost incurred by Owner

These are just a start, but I think it is a great place to start with any market. If you would like to learn more about the Memphis Market specifically I would be more than happy to help answer any questions. 

@Thomas O'Donnell

First, a lot of people (who mostly don't live here or know much about our growth) keep saying Austin prices will crash.  If any of these people own property in Austin, please let me take it off your hands.  40 years of straight appreciation.  The largest dip in price in 40 years is 2.9% and we have been through housing crisis, oil crisis, dot com crisis, you name it.  We are the 10th largest city in the nation and even with all this appreciation we are still 23rd in median sales price.  30K new jobs a year, 120 more people each day, demand far exceeds current and future supply, but for some reason people think what goes up has to come down.  Look at the data and not a saying.  

Second, and maybe most importantly, as you said you only live once.  If you are choosing between San Antonio and Austin, go to the city you want to live in the most.  You will do well in either.  But I would much rather live in Austin than San Antonio.  I am sure there are others who feel San Antonio is better. I will say, Austin is constantly voted one of the top 5 cities to live in.  Find out what is important to you and your happiness and how it relates to each city and that really is what should be the deciding factor.  

@Thomas O'Donnell as @David Sandvig stated- hard to find a more appreciating city in the US than Austin.  Cash flow is better in San Antonio and you should find lower price points there as well.  Austin's market probably has a bit more competition as well as demand is still strong with about less than a month of inventory.   San Antonio is obviously a much bigger city as it relates to population but 120 people move to Austin every day and are usually coming for high paying tech jobs.  I don't know much about job growth in Austin but I can tell you Austin and its surrounding suburbs are seeing very strong job growth.  Complications? Probably all has to do with what you qualify for compared to what you want.  

@Thomas O'Donnell Have you ever checked out any of BP's calculators? Their calculators are really self-explanatory and even spit out a fancy looking report once you've finalized your analysis.

I also developed my own excel spreadsheet that is customized a bit to my circumstances. For you, I would recommend using BP's calculators first and then just seeing if there are any other customizations you want to add and if so, create your own. I have my spreadsheet in Google Spreadsheets so I can easily update numbers on the go from my phone to run analysis...you never know when you'll need to :)

I'm new to investing and I'm looking to make a move on my first investment property in the next 5-6 months. I'm currently renting in Austin.

What I'm looking at is either a multifamily in San Antonio around $200k - $250k with a conventional loan or a house hack in Austin around $500k with an FHA loan.

So a few questions id like to get everyone's thoughts on..

1. What is the better starter investment so I continue to grow my portfolio? It looks like San Antonio will cash flow more but Austin will appreciate more.  

2. Is it safer to have a smaller loan if there actually is a correction in market? Or better to have less of my own money in the investment but have a larger loan?

Either way I'd have a good amount of money saved as a cushion so maybe that last part doesn't really matter.

Appreciate any feedback!

Quote from @Thomas O'Donnell:

Hello all, I currently plan on house-hacking my first property within the next year or as soon as I can. I will be moving to either Austin or San Antonio, depending on which is a better fit. I am currently working overtime to try and save up capital needed to move and get started on a FHA loan. I have pretty good credit for my age (740+), and can transfer with my job if needed. The current problem I am facing is having the required capital. At the moment I have a stock portfolio worth $9k, and I have $2k in cash.

Question: Should I sell my stock portfolio when the time comes so I can use that money to put towards a down payment on FHA loan? Or should I keep my portfolio separate and just keep saving up cash?

My fear is I do not want to wait too long to get started, as rates keep rising as well as prices. I've spent the last year educating myself on real estate investing and how to use it to obtain financial freedom. I want more than anything to begin this journey and live the life we all deserve! Any advice or input is greatly appreciated! Thank you all!

My two cents: Define your goals and come up with a strategy on how you plan to accomplish them. Everything else will fall in place. Don't worry about rates or market or what not. Focus on your goals and stay objective. Take your time in making decisions and doing planning upfront as much as possible. No need to rush.

Think in a more holistic way. If real estate is the only asset that you want to focus on as part of your portfolio then sure go ahead and sell your stock portfolio and focus ONLY on real estate. However, if your goals/strategy would entail having a more diversified portfolio including stocks/bonds, real estate then perhaps rethink selling them for a short term gain over long term results. 

You are young...take your time to think on how you want to plan out your life...Good that you are already thinking about this... Good Luck and enjoy the journey ! :--)

@Thomas O'Donnell I had the same mindset as you when I moved to a different city. Ultimately I rented for a year and took that time to drive the neighborhoods and get incredibly familiar with how to spot the best deals. Ultimately I bought a duplex and moved into it when my lease was up. the money that I was theoretically "throwing away" on the rent actually saved me a ton of money by buying a great deal that I would have otherwise never found if I tried buying right away.