All Encompassing Mortgage and Real Estate Thread

[Steelhorn 0]

2 minutes ago, gmr548 said:

Selling a house in a HCOL area. Or, hell, at this point, selling a house in central Austin/Dallas.

Maybe, guess I screwed up by being in Tarrant County my whole life so never really got to experience the HCOL return.  

 

[ZB'Tejas 593]

https://www.redfin.com/TX/Austin/908-Juniper-St-78702/home/31048135

 

Whew... and a townhouse close by just went under contract for $515 a sqft!

[hornbri 1396]

21 minutes ago, ZB'Tejas said:

https://www.redfin.com/TX/Austin/908-Juniper-St-78702/home/31048135

 

Whew... and a townhouse close by just went under contract for $515 a sqft!

Saw this one, $1,167 a sq foot closed yesterday. https://www.redfin.com/TX/Austin/1400-Mohle-Dr-78703/home/31236993

[swraith 346]

27 minutes ago, hornbri said:

Saw this one, $1,167 a sq foot closed yesterday. https://www.redfin.com/TX/Austin/1400-Mohle-Dr-78703/home/31236993

Wonder if that gets torn down for a new build on that nice corner lot.  

[jimmyjazz 45898]

  

1 hour ago, Steelhorn said:

How does someone have 800-900k cash?  Is there some secret to this phenomena?  

A significant portion of buyers are investors.  They have the funds.

Edited May 12, 2021 by jimmyjazz

[ZB'Tejas 593]

35 minutes ago, swraith said:

Wonder if that gets torn down for a new build on that nice corner lot.  

I think we know the answer to that...However I will say much of Pemberton is in a Historical Designation area that needs to go before a review board.

Edited May 12, 2021 by ZB'Tejas

[jimmyjazz 45898]

1 hour ago, hornbri said:

Saw this one, $1,167 a sq foot closed yesterday. https://www.redfin.com/TX/Austin/1400-Mohle-Dr-78703/home/31236993

I don't think the $/sf metric works that close to downtown.  I'd look at it as $/acre . . . and in this case, it's $7.4M/acre.

[ZB'Tejas 593]

3 minutes ago, jimmyjazz said:

I don't think the $/sf metric works that close to downtown.  I'd look at it as $/acre . . . and in this case, it's $7.4M/acre.

That's probably not the best metric either... So many lots on the east side are around 5000-6000 sqft but those still sell for more than 1M with an improved home on it.

[jimmyjazz 45898]

17 minutes ago, ZB'Tejas said:

That's probably not the best metric either... So many lots on the east side are around 5000-6000 sqft but those still sell for more than 1M with an improved home on it.

I'm just saying that a lot of buyers that close to downtown are buying the lot, not the house, no matter how "improved" it is.

[CooterBrown 18006]

OSB was $52/sheet at Home Depot this morning. A shit box starter home is gonna cost you $200/sq ft at that rate.

[gmr548 16576]

  
A significant portion of buyers are investors.  They have the funds.

This too, and it’s only going to get worse. Institutional money is coming around to SFR like never before.

[Mother mopar 3318]

OSB was $52/sheet at Home Depot this morning. A shit box starter home is gonna cost you $200/sq ft at that rate.

Holy shit, that's nuts for OSB.

[Okie State 3818]

OSB was $52/sheet at Home Depot this morning. A shit box starter home is gonna cost you $200/sq ft at that rate.

Fire up the stimmy machine!

Figures all of this would happen just as I finally am in a position to upgrade to a different house. Never fails.

[Neonmoon 38129]

5 hours ago, ZB'Tejas said:

https://www.redfin.com/TX/Austin/908-Juniper-St-78702/home/31048135

 

Whew... and a townhouse close by just went under contract for $515 a sqft!

They bought that just to be across the street from Franklin. Nom nom nom

[Gil Bang 25944]

The State of CA just gave the go-ahead for open houses to resume, with a few limitations (capacity, masks, hand sanitizer available, etc).  Of course, in this market, they aren't necessary, but still, it's a welcome return to some form of normalcy. 

[Pato del Muerto 52489]

2 hours ago, CooterBrown said:

OSB was $52/sheet at Home Depot this morning. A shit box starter home is gonna cost you $200/sq ft at that rate.

Already does. Most of the 1700-2100ish sf new homes I looked at from the normal entry leve builders like kB, drh, and highland are priced into the 400s. 
 

couple of weeks ago I was driving in the wolf ranch area of south Georgetown and saw signage for new homes from the low 300s or maybe even 290s from highland, so I pulled in and found the model home and called to see if I could go in. She let me in and said the signage is a few months out of date and their lowest price point is 420k right now- and their wait list is 70 deep. Also said the smaller homes would be more available due to duplication concerns with some of the larger ones. 

Edited May 13, 2021 by Pato del Muerto

[Pato del Muerto 52489]

Shit I just sold my house in Wyoming for $250/sf and it’s your basic 1600 sf 3/2 on 8000 sf. 

[Assman 1830]

On 4/13/2021 at 9:19 AM, SuperSport said:

Just lost out on a house in Plano, we offered 10% over asking price (which was already high) and waived appraisal. 20+ offers, winner was "substantially higher" with "impressive terms." I'm so fucking over this shit...the worst part is I know I'm going to end up overpaying for a house I don't want, just to have a place to live.

I'm a month late here, but was this house off Park Blvd?  Had a pool and backed up to a small creek/greenbelt?

[SuperSport 1333]

6 hours ago, Assman said:

I'm a month late here, but was this house off Park Blvd?  Had a pool and backed up to a small creek/greenbelt?

Ha! Are you the VA loan that snagged it for an extra $50k? If so, congrats and thank you for your service. Helluva house, I wanted it so damn bad...

[Soliver465 404]

Things are crazy everywhere.  We moved from Austin to the suburbs west of St. Louis four years ago and our house had appreciated 25%.

Things will not get back to some semblance of normal until interest rates go back up.

[Assman 1830]

Ha! Are you the VA loan that snagged it for an extra $50k? If so, congrats and thank you for your service. Helluva house, I wanted it so damn bad...

My wife was the realtor for the couple that bought it. That one was tricky because they were VA and competing with cash offers. She had to get very creative with their offer and there was more to it than just more money. They just closed yesterday.

My wife has been pretty successful getting offers accepted lately, but I think it's more her personality and willingness to talk to the listing agent to get a real feel of what the sellers want.

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[SuperSport 1333]

2 hours ago, Assman said:

My wife was the realtor for the couple that bought it. That one was tricky because they were VA and competing with cash offers. She had to get very creative with their offer and there was more to it than just more money. They just closed yesterday.

My wife has been pretty successful getting offers accepted lately, but I think it's more her personality and willingness to talk to the listing agent to get a real feel of what the sellers want.

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A year's worth of handjobs, or what? jk

We could handle a mortgage at the level they closed, but we're cash-limited so the appraisal would've had to hit within 5-10% for closing cost considerations, 80/20, etc....we offered what we could and wife attached a heartfelt letter, but c'est la vie. I've heard stories of people including pizza from their family restaurant for a year, Cowboys season tickets, and random other shit, but unfortunately we're lame and didn't have anything cool to add to our offers.

We ended up with a lesser house (though fully renovated) in a lesser area, but even still only had our bid selected because the flipper was a family guy and liked our letter. Close on Tuesday, ready to be done with this shit...so I can do it again in five years when we outgrow this one. FML.

[Assman 1830]

A year's worth of handjobs, or what? jk
We could handle a mortgage at the level they closed, but we're cash-limited so the appraisal would've had to hit within 5-10% for closing cost considerations, 80/20, etc....we offered what we could and wife attached a heartfelt letter, but c'est la vie. I've heard stories of people including pizza from their family restaurant for a year, Cowboys season tickets, and random other shit, but unfortunately we're lame and didn't have anything cool to add to our offers.
We ended up with a lesser house (though fully renovated) in a lesser area, but even still only had our bid selected because the flipper was a family guy and liked our letter. Close on Tuesday, ready to be done with this shit...so I can do it again in five years when we outgrow this one. FML.

I'd gladly let my wife give HJs for 3% commission.

For the record, the appraisal came in a tad under listing so the buyers had to bring $100K to closing. The VA is notorious for under-valuing properties, even though my wife personally met the appraiser at the house and hand delivered him 17 comps that supported a value well over asking.

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[SuperSport 1333]

1 minute ago, Assman said:

I'd gladly let my wife give HJs for 3% commission.

Yeah, of all the houses we've looked at throughout this process, that was one of the few where I felt reasonably confident about the appraisal...but even still, their last tax assessment was $100k less than listing with no fresh updates, so I held back a bit in the name of self-preservation. Congrats to your wife.

[UT_OB1 2218]

1 hour ago, Assman said:

I'd gladly let my wife give HJs for 3% commission.

For the record, the appraisal came in a tad under listing so the buyers had to bring $100K to closing. The VA is notorious for under-valuing properties, even though my wife personally met the appraiser at the house and hand delivered him 17 comps that supported a value well over asking.

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3% of what?  Tell me how much were talking about here. Are you willing to let it be split?  A time share, if you wi

[South Austin 52463]

I’m here for the handjobs.

[Assman 1830]

9 hours ago, UT_OB1 said:

3% of what?  Tell me how much were talking about here. Are you willing to let it be split?  A time share, if you wi

You don't want to pay 3% of your average home price in DFW for an HJ.  Not from my wife at least.

[Wulaw Horn 19069]

9 minutes ago, Assman said:

You don't want to pay 3% of your average home price in DFW for an HJ.  Not from my wife at least.

If you are on the buyer side that’s the seller paying that for you though to be fair. So it’s a freebie as it were. According to the contract anyway. 

[CooterBrown 18006]

I’m here for the handjobs.

[immamac 42839]

I'm exploring a partnership with a builder for my property in zilker. 

Have a market price on "equity in" as my contribution, the builder builds on his dime and with his crew as his "equity in" on a cost model. 50/50 share of the profits after each party gets made whole on equity in. 

When I started exploring this in January I said 750k equity in (lower than market, but that's the point for both of us because theoretically I get the build at cost not cost +10%). I'm up to 915k now and the builder agreed that was still below market. 

2 tear downs with significantly smaller lots sold for 865 and 849 respectively within the last 30 days. 

Estimated post construction sale price of 2.2-2.4M, meaning if he spent 800k on the build we would both share 500-700k.  Kicker is I said I'd want to 1031 the whole gain into another, builder said he's game. 

Is this my in to residential flipping? Is this a stupid idea? Property cash flows about 700/mo after expenses and PITI for a caprate above 12% right now. 

[Wulaw Horn 19069]

16 minutes ago, immamac said:

I'm exploring a partnership with a builder for my property in zilker. 

Have a market price on "equity in" as my contribution, the builder builds on his dime and with his crew as his "equity in" on a cost model. 50/50 share of the profits after each party gets made whole on equity in. 

When I started exploring this in January I said 750k equity in (lower than market, but that's the point for both of us because theoretically I get the build at cost not cost +10%). I'm up to 915k now and the builder agreed that was still below market. 

2 tear downs with significantly smaller lots sold for 865 and 849 respectively within the last 30 days. 

Estimated post construction sale price of 2.2-2.4M, meaning if he spent 800k on the build we would both share 500-700k.  Kicker is I said I'd want to 1031 the whole gain into another, builder said he's game. 

Is this my in to residential flipping? Is this a stupid idea? Property cash flows about 700/mo after expenses and PITI for a caprate above 12% right now. 

The only way it could be a stupid idea is if the property market tanks between here and there. What’s the total time between starting the project and having it on the market?  What’s your net if you sell now?  How well do you know/trust the builder? 
I honestly don’t think you could possibly do anything wrong with property (on the sale side) in Austin right now. Basically whatever decision you make leaves you falling ass backward into

money- the only question is how big is the pile. 

[immamac 42839]

2 minutes ago, Wulaw Horn said:

The only way it could be a stupid idea is if the property market tanks between here and there. What’s the total time between starting the project and having it on the market?  What’s your net if you sell now?  How well do you know/trust the builder? 
I honestly don’t think you could possibly do anything wrong with property (on the sale side) in Austin right now. Basically whatever decision you make leaves you falling ass backward into

money- the only question is how big is the pile. 

I think the hesitation is more about what if zilker goes multifamily in the next 10 years with highrises and things get to 1200/sq ft type shit (for the lot SQ footage, not the home) that is completely in the realm of possibility. 

[Wulaw Horn 19069]

2 minutes ago, immamac said:

I think the hesitation is more about what if zilker goes multifamily in the next 10 years with highrises and things get to 1200/sq ft type shit (for the lot SQ footage, not the home) that is completely in the realm of possibility. 

Ok.  But then you’ve paid taxes on the land for 10 years and lost out on whatever other opportunities would have come along if you got your 1.4 million dollars working for you in the market. If you play the game right in the next 10 years you ought to be able to beat whatever the payout 10 years from now is, right?  
I’m just a simple unfrozen cave man lawyer but if it was me I’d roll the entire 1.5 million into about 35 or so $180k rent houses in Conroe or somewhere like that- where I could collect $1650 rent on a 180k house with a $140k mortgage interest it - and out 15 year mortgages on it. They should cash flow slightly positive and when you get them paid off in 15 years you have a $400,000 income (after paying taxes and insurance) on assets free and clear that are probably worth $8,000,000. 
And you don’t have to worry about Austin maker crashing for high end and high dollar between now and then. 
Because people will always need affordable rent homes and if you have a slightly below median house you can get close to 1% of value in monthly rent, and it won’t ever stay vacant for long. 
But that’s simple and not glorious and has no real risk or excitement to it. 
I’ve got a friend rolling it into mobile home land and self storage. This shit is recession proof and makes sense and is even less work than my stupid scenario. 
You probably would kill it either way- but dang I’d be nervous about having all my money tied up in a high end area that’s likely to be super elastic in pricing if there is a housing bubble and recession. 
 

[Hornlover 8830]

41 minutes ago, immamac said:

I'm exploring a partnership with a builder for my property in zilker. 

Have a market price on "equity in" as my contribution, the builder builds on his dime and with his crew as his "equity in" on a cost model. 50/50 share of the profits after each party gets made whole on equity in. 

When I started exploring this in January I said 750k equity in (lower than market, but that's the point for both of us because theoretically I get the build at cost not cost +10%). I'm up to 915k now and the builder agreed that was still below market. 

2 tear downs with significantly smaller lots sold for 865 and 849 respectively within the last 30 days. 

Estimated post construction sale price of 2.2-2.4M, meaning if he spent 800k on the build we would both share 500-700k.  Kicker is I said I'd want to 1031 the whole gain into another, builder said he's game. 

Is this my in to residential flipping? Is this a stupid idea? Property cash flows about 700/mo after expenses and PITI for a caprate above 12% right now. 

You need to run more numbers. Your current real gain is actually 700/mo PLUS Principal, since you will get that money back when you sell the house.

If you were to sell the property, as is, what would be your profit?  If it sold for 1.5MM and your current mortgage is $700k, your realized gain would be $800K.

What about if you were to take a construction loan and pay a builder? Assuming $275/sqft cost and a 3000 sqft home (no idea if those numbers work with current labor/material costs) , you're looking at $825,000 loan, and ~$18k interest payments. If your current mortgage is $700k  + $843k construction loan and you sell for $2.4MM, you are looking at $857k in profit.

If your mortgage is $700k, and you decide your equity is $915k, and he spends $800k on the build and the house sells for 2.4MM, you get (2.4MM - (915 + 800)) , you split $685k. You get $215k (difference between equity and mortgage) PLUS $342.5k, for a total of $557k .

So basically, you are giving the builder 50% of the profits for saving you the interest payment on a construction loan (let's say $20k) and his 10%-20%  markup (80k-160k if he thinks his costs will be 800k). 

Not a good deal.

 

Edited May 14, 2021 by Hornlover

[TKthunder2 4988]

34 minutes ago, immamac said:

Is this my in to residential flipping? Is this a stupid idea? Property cash flows about 700/mo after expenses and PITI for a caprate above 12% right now. 

How much do you want out of it?  I’ve had a friend do this who only netted ~30k on his flip and told me it was a bigger pain in the ass than he expected and he think he could have made half of that money simply by listing it as is since many people are looking for flipping opportunities for themselves or for investments.  If you want to get into financing investment flipping you should probably get your real estate license and take some additional cut from buying and selling side (since you know the contractor is going to “pad” his costs unless he’s super trustworthy).

[immamac 42839]

I'm in 425 purchase less than 300 left on the note. 

[Hornlover 8830]

2 minutes ago, immamac said:

I'm in 425 purchase less than 300 left on the note. 

 No idea what the numbers are for your current income on the house, so those I just left at wild-ass guesses. I would bet though, that in the end, selling the house as-is today is the biggest payoff with the least amount of hassle.

If rent payments are $3500/mo and P&I is $1800/mo and taxes are $12k/year , then it's probably closer to 10 years to pay off the note (that's when the interest payments start going directly to you). In that case, though, you're making less than $30k/year off the rental property, which means it will take 30 years to get you the $1MM in profit that might otherwise be available (although you would still have the property to sell at that later date).  

 

[Hornlover 8830]

Oh, and all of these are way simplified. You will need to pay some or all of the following (unless the builder is paying out of his cost).

Architect - anywhere from $10k -> $100k . Probably $20k for a decent one that doesn't need to spec every single finishing in the house

Permits - $5k

Survey/Soil Samples/Engineering/Landscaping - $5k

Realtor (6% commission on $2.4MM) - $144k 

Appliances - $20k

[CooterBrown 18006]

I’ve got a friend rolling it into mobile home land and self storage. This shit is recession proof and makes sense and is even less work than my stupid scenario. 

I used to know a guy that does self storage in suburban and exburb towns around Austin. Makes an absolute killing. His entire philosophy is that hoarders are gonna hoard regardless of the state of the economy.

[Neonmoon 38129]

I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities

[jimmyjazz 45898]

9 hours ago, immamac said:

2 tear downs with significantly smaller lots sold for 865 and 849 respectively within the last 30 days. 

How big were those lots, if you don't mind me asking?

[Gil Bang 25944]

55 minutes ago, CooterBrown said:

 

I used to know a guy that does self storage in suburban and exburb towns around Austin. Makes an absolute killing. His entire philosophy is that hoarders are gonna hoard regardless of the state of the economy.

 

I've seen a lot of those on the lending side.  They are terrific cash cows.  Great income and low expenses and maintenance. 

[CooterBrown 18006]

I've seen a lot of those on the lending side.  They are terrific cash cows.  Great income and low expenses and maintenance. 

Yep. He went cheap initially and after dealing with people for a year, he spent money to set up the online sign up process, online CC payments, auto payments, etc. No phone number to call just a contact us form. He just logs on to set up a new gate code for any new customers and deletes gate codes for declined payments that are past the grace period to submit payment. He has one employee that visits each location every few days to pick up any trash and visually inspect anything that may need maintenance.

Really a smart investment from the way he talked about it.

[Gil Bang 25944]

18 minutes ago, CooterBrown said:

Yep. He went cheap initially and after dealing with people for a year, he spent money to set up the online sign up process, online CC payments, auto payments, etc. No phone number to call just a contact us form. He just logs on to set up a new gate code for any new customers and deletes gate codes for declined payments that are past the grace period to submit payment. He has one employee that visits each location every few days to pick up any trash and visually inspect anything that may need maintenance.

Really a smart investment from the way he talked about it.

Sounds good.  
 

Most of the bigger ones out here have resident managers.  There's a big one under construction nearby, and it's obviously getting a house on the site (main structure is CMU, house is wood framing).   But yeah, the smaller ones are pretty automated these days. 

[CHIEF 5079]

One of my uncles had a 220 unit storage complex. He said he seldom saw anything in a unit that was worth one month of rent. He filled it up, ran it for a few of years, then cashed out. Tripled his investment in three years.

CHIEF

[jimmyjazz 45898]

8 minutes ago, CHIEF said:

One of my uncles had a 220 unit storage complex. He said he seldom saw anything in a unit that was worth one month of rent.

That was my conclusion on the last storage unit I rented.  "Why am I paying $100 a month to store $70 worth of crap?"

[Mother mopar 3318]

I'm in the wrong business.

[CHIEF 5079]

7 minutes ago, jimmyjazz said:

That was my conclusion on the last storage unit I rented.  "Why am I paying $100 a month to store $70 worth of crap?"

His favorite saying was "its nothing but shit, but it's their shit."

CHIEF

[Okie State 3818]

I had a family member who spent thousands of dollars storing shit all over town for years. They eventually got behind on bills and all of the units were auctioned off.

[CHIEF 5079]

I'm convinced that RV parks is where it's at. I have my eye on some acreage at a rural intersection on the outskirts of Ft. Worth. City sewer and water comes to the back of the property. I can buy the property and put in about 100 hookups, with sub-meters for about $1mil. At 60% occupancy that is still $24k/month. In ten years when the city grows out there I can close shop and sell the land by the square foot.

CHIEF