All Forum Posts by: Victor Steffen

@Oscar Montealegre Anybody competing for multifamily inventory in San Antonio will tell you prices are climbing almost as aggressively in SA as they were in ATX 12 months ago. Different scale of course but San Antonio seems to be at the start of their growth curve while Austin seems to have (as you say) peaked in the short term. I do believe we'll see another price surge in Austin but that's for another post. Compared to other areas in central texas San Antonio has more multifamily inventory so you shouldn't have trouble combing through a deal or two each week. Like anything else- you'll get what you pay for. If you're seeing price points below 75k-100k per door you should tread with caution. best of luck!

Here's a thought I have been working through:

Population is growing, median income is rising, inventory and interest rates are low. These factors point toward a continued boom for Austin real estate values. 

Money supply at an all-time high, ballooning deficit, localized 40% year over year appreciation, rising unemployment and .25-.45% rent/price ratios point toward a market prone to burst.

I personally see values in Austin plateauing here for the next 12 months and find it interesting that we only discuss real estate values in the context of explosions or collapses and ignore the most probable outcome- market neutrality.

As long Austin continues to attract a well paid populous, there will be buyers to absorb inventory as it becomes available, protecting from any sort of pull back in values. We may see price reductions, but a price reduction on an over-priced listing is very different than fair market rates contracting. 

In the last 6 weeks we have seen huge jumps in rental rates and as leases renew in the coming months we'll see rent/price ratios improve closer to .75%.

I think the market over-extended itself this past year and is taking a breather while other market fundamentals needed to fuel growth like income per capita and rental rates catch up. 

Population growth, job growth, income growth and interest rates below 5% are the factors I'll be looking at for signs of another price surge. If any of those 4 fail to materialize, I think Austin found her new baseline. 

If those factors still exist in a year, where do we see the next resistance in median home value? 750k? 999k? 1.2M?

Anyway.. Carry On

Hi Team! CAREM meets again 8/19/2021 6:30 at the towneplace suites in South Austin. Somebody requested donuts at the previous event so I'll raid a krispy kreme prior to our gathering. Also- Shoutout to Albert Thong for connecting us with a great asset-based loan option. Solid solution to Fannie/Freddie's 10 loan limit.

This week we will be talking about syndications and what to look for when analyzing a project from the LP's perspective. How do you identify strong operators? What questions should you ask prior to hitting "send" on the wire? What are the benefits of investing as a LP and what are the risks?

Will be a fun discussion!

Cheers Y'all

Vic

Hey @Austin Cai - can you look into a co-living setup? I know folks there getting 1500 per bedroom. I have no idea what the prices look like in your area or if this is even feasible but i feel 6 beds at 1500 per room should allow a 1M-1.2M purchase price. It will cover your piti anyway.

@Karina Tarasova

I’m liking new Braunfels and San Marcos right now for buy/hold single families. Since you already have a team established in central TX it wouldn’t be difficult to head a bit further south. Though our strategies are a bit different- I like turn key, recently built assets (2013 or later usually). I also like leasing out individual bedrooms in large single family homes to increase gross income.

I feel like the small apartment building inventory is really difficult to compete in right now. Caps are compressed and off-market owners are solicited daily. If you’re seeing good returns with your residential projects, why the pivot?

Sounds fun!

Austin Real Estate investors gather to discuss the current market trends, network with fellow investors and learn what others are working on. There will also be a short 30 minute presentation on buying and managing single family homes via the Rent By The Room model. The group's hosts- Victor Steffen and Mike Walker are seasoned Rent By The Room Investors in Austin. Learn how to run a successful Room Rental operation to increase cash flow, meet fellow investors, and surround yourself with folks looking to grow their real estate portfolios!

We meet on the first and third thursday of each month from 6:30-8:30 at the TownePlace Suites in South Austin off of Little Texas Lane by the Carvana off of I35.

See the meetup.com link here 

The folks at Kangaroof have always done me right 

@Shantan Kajjam

Distance to runway is less important than the property’s orientation to the runways. A plane passing overhead will sound like a freight train and depress property values along those flight lines. Planes passing tangential to the property won’t have as much of an impact on the value. Look at the satellite view of the airport and runways in relation to your target. That should tell the story 👍

@Sarah Lowery

Yup we’ll be there 👍