All Forum Posts by: Curtis W. Sutherland

I have a friend that owns hundreds if not thousands of billboards.  Now he is building $500,000 double sided electronic billboards.  I asked him a few months ago how long it took him to get his investment back on those.  He said if sales go well, 12 months, although he anticipates that it will take him 20 to 24 months to fully recoup his investment in each billboard.  The return was too variable on the smaller, more affordable billboards for him to give me an answer.  He said it depended on how much he had to pay for the existing billboard, if it was a new land lease or not, and that his labor, insurance and materials cost continue to increase, etc. He did mention that he made tens of millions annually in gross profit.

I just received a $20M verbal offer from a well known commercial Realtor to lease one of my properties for 50 years. It's higher and longer than their last offer of $15M over 25 years. They are bringing their client into Austin to meet with me next week to present a formal offer. It sounds like a lot of money, but somehow, I feel like I'm going to end up with the short end of the stick...I have to live to be almost 107 years old before I could do anything with the property...that's not very likely. My kids would be in their mid 80's by the end of the lease, so I guess SCORE for our grandkids!  Today the property is worth around $7M, so it seems like the ground lease should be higher to me.  It's a decent amount of income, so I'd like to not screw this deal up.  Any advise would sincerely be appreciated.

...incurable, I'm afraid :)

Yes, I'm glad too, James...on this one, one of my realtors found it for me. He texted me first thing in the a.m. and said we needed to be there at noon to see it.  Another way that I've found some opportunities to purchase in our area is by searching Facebook for groups with off market or pocket listings for real estate. 

Check out "Investor Underground- Austin" on Facebook...it seems to be one of the most active sites in our area for real estate deals prior to being listed on the MLS.

I have found several deals that were worth the money...they just sell super-fast.  There are plenty of hard money lenders on there as well.  This group has monthly meetings where they present their latest off market listings and you can buy right there or go see it the following day.  There are folks that offer courses on wholesaling, as well as property attorneys, etc.  Last month they had a very lively debate on Fix and Flip vs. Buy and Hold. 

I've always done a little of both, but since I have a decent amount of long term buy and holds in my portfolio, now it's time for me to fix and flip again.

Brushy Creek neighborhood, I believe. It looked to me like it was a KB built home. Cute neighborhood. This should be the easiest flip I've ever done.  

We ran a pawn business in Austin, TX for 34 years...my wife and I decided to sell our business (but we retain our building so we collect another $1.05M in rent from the buyer of our business over the next nine years)...so I guess we are now "retired'ish".  Anyway, we bought a nice flip today, so we are finally back to buying and selling properties...it's what we love and what has made us the most wealth by far! Listed for $230,000 and everyone had a one-hour window to preview the property and another hour to come up with a $5,000 down payment cashiers check.  There were about 30 or so investors and potential home buyers that previewed the property in that hour.  They received five offers in the first five minutes.  We were the highest bidder at $242,000.  This property will take $30,000 to cosmetically update with granite, tile, hardwood, paint, etc.  An easy flip.  Houses in this neighborhood sell in 1 to 5 days...nothing has taken any longer.  We will list it for $320,000 when completed.  It should only take two weeks to complete. It was a nice little find and we should net over $15,000 after paying their closing cost and all the commissions for both sides.  Nice green kitchen...granite and tile get ordered tomorrow :)   I can't wait to find our next flip!  

My wife and I were married when we were just barely 19.  We bought our first property less than a year later for $52,000. We lived there for seven-months (until I was transferred out of state).  We sold the property and netted $7,000 after commissions. We were both sold after that. 

Michael, I am a serial entrepreneur...I am extremely blessed to have a wife that supports my dreams.  We currently own several businesses and numerous residential and commercial properties in and around Austin and central Texas.  Starting a business is full of risk and ways to fail.  Buying real estate has many associated risks as well.  After owning a successful business since 1981, I can tell you that buying the building we are in after being in business for ten years has been the best move we have ever made. The business, while started with $30,000 is only worth $500,000 on its best day, after 33-years.  The property, while it has been owned for ten years less time was purchased for $350,000.  Using a 10% down SBA loan, we put down $35,000...that property is worth $6,000,000, after 23-years.  Over the years we have borrowed against the property to buy out three sets of partners, to buy other investment properties, and to live on in the lean economic years. We currently owe $1,200,000 on that particular property...it is a small strip center and our tenants make the mortgage payment for us. We are able to stay in the majority of the space for the cost of the annual taxes.  For me, the best part of owning a business in a property that we own is that you are paying it off as the value increases...at some point, there will be no mortgage payment.  When that happens in a few years, we get a $five-figure monthly raise.  I guess the bottom line for me is, buy a building, start a business, let the business pay off the building for you.   We have sold two of our businesses and received a 10-year and a 15-year lease on our buildings from the company that we sold our businesses to. That was enough of a lease to pay those notes down to just a few thousand dollars each. Now that the tenant has moved out of one building after the 10-year lease was over, we were free to sell it. We listed it and rapidly received a contract and expected to close in the next forty-days. We put $13,000 down when we bought the building when we used an SBA loan to buy it.The business made all the of the payments. We sold the business for a huge profit ten-years ago and now we are selling our $13,000 property investment for $600,000.  Start a business and let your business pay off your property. Owning a business can be fun and give you something to do with your time, but owning real estate can make you wealthy and give you free time.

It is difficult to find a good price-to-rent ratio investment property in Austin, like Ali said, butthere are still some investment/rental deals in Austin.  I found one a few months ago for $95K. I put $40K into rehab and once the rehab was completed, sold it in 72 hours for $230K. I would have kept it as a rental but it was a pier and beam foundation and I'm just not a big fan. The property would have cash flowed well for me, but if you were buying at $230K and renting it out, you would have had a monthly negative cash flow of about $300 to $350.

The local appreciation has been great, but it seems to be slowing down just a little...still gaining, just not as rapidly.  Historically, at least since the 1970's, property values in Austin double every ten years, so 100% increase every ten years.  I own several properties here that have increased 400% to 700% in the past 14 years, and some that have increased in value 1400% in the past 23 years.  If you are into long-term holds and appreciation, Austin has been a steady investment.  The current rent prices have continued to increase (60-100% higher than ten years ago in most local areas) with strong demand and steady increases.  

While residential units rents are increasing, I have noticed a slower demand for my commercial spaces, even after lowering the rents from their all-time highs a few years ago. Commercial property values are still increasing, but the rental demand just doesn't seem to be as strong as the demand for residential units.

If I were investing today, I would invest in the smaller towns just outside of Austin, like Hutto, Kyle, Buda, Cedar Park, etc...they are rapidly becoming part of Austin. Austin's housing prices are driving everyone to the smaller, more affordable (for now) communities where folks can still drive to Austin to work in 30 minutes or less. 

Well done, Shane! You are on the right track to great success!  

My wife and I bought out first property when we were 20.  We had to save up for a year, get our credit started with a Sears credit card, pay off all our debts, and use both our incomes to buy our first property.  I think the advice that you have been given here is very sound. 

You may want to find a realtor in your area that you can work with and that is willing to help get you into your first property. A good realtor will help you do anything necessary to help you buy, especially if they believe that you will be a repeat buyer. When you are the buyer, realtors work for you (at no charge). A good realtor will write letters on your behalf to help you establish credit, get you pre-qualified so you are ready to buy, find unique deals that you can afford, etc.  Good luck!