Austin Real Estate News

July 31, 2017

Austin real estate exec shifts focus to preserving middle-class housing

austin, texas, real estate, housing, affordable, middle-class, subsidized, market, economyLooking to address the problem of Austin’s diminishing supply of middle-class housing, the head of the area’s lead real estate trade group is rounding up investors more interested in social good than eye-popping returns.

David Steinwedell plans to leave his position as executive director of Urban Land Institute-Austin in September so he can lead Affordable Central Texas, a private equity fund that will purchase and hold multi-unit properties in the middle-class price range, the market for which earns between 60 and 120 percent of Austin’s median income of $55,000.

As Austin grows, those types of developments are attractive to developers who buy, renovate and resell or price units at upper-class or luxury rates. That buying spree has created a shortage of housing for job classes such as teachers, civil servants, tradespeople and artists, who are increasingly having to look outside of Austin for housing options.

What does the plan entail?

Steinwedell told the Austin Monitor he and a small group of investors expect to announce closure on one or two properties with between 150 and 300 units each in the fourth quarter of this year and will use the attention from the purchase to begin recruiting investors to fund more acquisitions.

If the plan is successful and the fund delivers modest but reliable returns to investors looking to solve Austin’s middle-class housing crunch, he said Affordable Central Texas could grow to control more than 12,000 housing units over the next decade.

“It will provide a modest return but the more important thing is doing something that has a larger benefit to Austin,” Steinwedell said. “As opposed to investing in another mutual fund this gives you a benefit that helps nurses, teachers, musicians and bank tellers by preserving their housing options in the city near transit corridors. The buildings we’re looking at are those built in the ’80s or ’90s, that have been there a long time and you drive by but might not even notice until one day when they’re gone so the property can be redeveloped.”

Steinwedell said he became interested in the workforce housing issue in 2015 when the Urban Land Institute completed a study on the growing problem of working-class living options that prescribed many actions for the city of Austin to take but found the private development and real estate sectors had little incentive to target middle-class housing. He said the issue was severe enough to require large-scale attention since nonprofits geared toward cheaper affordable housing demographics didn’t have the resources to fully address middle-class housing on their own.

Who will be involved?

“This is an innovative and somewhat unique approach that takes some explaining when you take it to investors,” Steinwedell said. “The advantage is the risk is very low because demand is strong and the turnover will be low, so the quality and consistency of the revenue is similar to what you see on more typical core investments.”

Steinwedell said individual investors who are open to unorthodox opportunities will make up much of the early money in the fund. If it can deliver reliably, he said, he’ll then be able to present it to pension funds and other groups that can commit larger sums to fund bigger purchases.

Asked about the city’s role in addressing the problem, Steinwedell said he’d like to see middle-class projects fast-tracked for permit approval and given reduced fees to remove some of the burden developers face when building in Austin.

He said the evolution of CodeNEXT will play an important role in where middle-class residential units will be built in Austin over the next 20 years, and that a city land bank that reserves property for workforce housing and potentially reduces property taxes and other carrying costs would help as well.

“Housing is a like a multi-layer cake, and the city has to serve all of the layers,” he said. “To drive more construction of the missing middle, you need to fast-track those projects or eliminate fees and do other things to put them at the front of the line.”

Middle-class job opportunities

Mayor Steve Adler has made workforce affordability a priority since his election, pushing for more training and job opportunities for middle-class workers, with the hope that increasing those workers’ incomes will address one end of the cost-of-living problem. He said Steinwedell’s effort is needed, and he hopes the approach works so more investors become interested in preserving middle-class housing.

“It’s an interesting concept they’re trying to prove up and the effort is critical, because just providing subsidized housing that is affordable is not enough,” he said. “The question will be what scale can you do that at to meet the municipal challenge we face, and will it be sufficient to make a difference and preserve what is special about this city.”

By Chad Swiatecki, AustinMonitor.com

Posted in News
July 24, 2017

What does a real estate agent do all day anyway?

multitasking real estate agentWhat does a real estate agent do? Oh, where to start. Trying to explain to the public how real estate agents spend their time is akin to explaining what a doctor or lawyer does all day. There’s a lot more that goes into “treating patients” or “handling legal matters” and the same goes for “helping people buy, sell or rent property.”

From a consumer’s first thought about making a real estate move to actually taking the leap (whether that means right now, next month or three years from now), the agent is incubator, initiator, action-taker, coordinator, scheduler, personal concierge, resource person, problem-solver, mediator, miracle worker, red-tape cutter, transaction manager and chief make-it-happen officer of everything else that doesn’t fall into the prior categories.

They may delegate some of these roles, but nothing gets completed without their oversight and input into what needs to be done and how.

An agent has a workday like anyone else, but there are typically little to no boundaries to that agent’s day and week. Here’s how an agent’s workday often goes:

Responding 

There are no official days off in real estate. You might have spans without any scheduled appointments, but there are always inquiries, emails and texts to respond to.

Agents are “on” no matter where they are. In our in instant-response society, there really is no waiting until tomorrow.

If a consumer contacts them about a property, they respond. If other agents contact them to ask questions about their listing or want to show one of their properties, they get back to them.

If they receive an offer, they work on it regardless of the day, place and time. There is no stop-and-start in this business.

Despite what people might say, it is nearly impossible to shut off the communication, ever. The workplace is anywhere an agent is and that doesn’t mean agents have to go to an office for the day to start — work happens at home, in the car, during vacations and on the go.

The job often begins early in the morning or the night before managing emails and follow-up communications — phone calls and texts about any number of things from showing feedback on listings, following-up on in-progress transactions and creating to-do lists for assistants and staff.

Reviewing MLS activity

Agents review MLS activity for any pertinent listings and updates on properties of interest to their buyers and sellers (competitive listings, price changes, under contracts, back on the markets, off the markets or solds, etc.) and notify their clients of relevant information.

Keeping up a database

Agents must continually update their contact databases with new customer information, updates to existing customer contact information, birthdays and new-home anniversaries, and more.

what does a real estate agent do all day

Scheduling showings

Agents put together property itineraries for clients who are planning a house hunting trip, which could involve numerous showings in a short period of time.

Scheduling these tours requires a delicate dance that takes into consideration geography and logistics against the backdrop of unknown time constraints that sellers may impose. (“Can you come at 2 p.m. instead of 10 a.m.?” or “Today’s not good, but how about Friday?”)

These impromptu changes in plans wouldn’t be a problem if agents didn’t have anything else to do, buyers had the luxury of time and they were local — but rarely are agents working with that kind of flexibility.

And Murphy’s Law says the property that’s causing the scheduling difficulties will be the one at the top of buyers’ wish list. Agents have to find a way to make it happen.

Making contact

Agents reach out to establish initial contact, discuss real estate needs and provide advice on the market to customers who have just been referred to them.

They conduct in-depth research on possible options for buyers and dive into market comparables to get an idea of what sellers’ homes can realistically sell for.

Setting and attending appointments

Then there are the appointments — meeting buyers and sellers for initial discussions, previewing and touring properties, meeting inspectors, appraisers and a plethora of specialists, contractors, stagers, photographers and repair professionals.

While out on these meetings, business carries on and the emails, calls and texts flood in.

Oftentimes agents will be juggling these meetings with the sellers from six months ago who call and want to meet immediately — or the inactive buyer couple who suddenly found the perfect home that they need to see right this minute.

Negotiating offers and managing the sale

Negotiating offers may go on for days or weeks. Once an offer gets worked out and a property goes under contract, that is just the beginning. There’s no jumping up and down, high-fiving and laughing all the way to the bank. Quite the contrary, this is where it can all go wrong.

At this point, agents have to make sure that everyone involved in this process does their job. From whatever side of the transaction they represent — buyer or seller — agents need to make sure everyone is fulfilling their obligations of the transaction in a timely manner.

If a lender is involved, active and frequent communication is a must to ensure the loan process is on track.

Agents check in with the title company or attorney’s office to make sure the file is being handled and all details and nuances are being attended to. They also address anything unexpected that may arise — a closing that needs to be a mail-away to the seller, or a situation in which a power of attorney needs to be present because one of the buyers will not be.

There are an endless number of tasks that agents must ensure get done from contract to close, from reminding clients about utility transfers to ensuring the seller has everything moved out on the day the buyer legally takes possession.

Problem-solving

Problem-solving and crisis management happens at every turn. This entails educating clients about the realities of what they are trying to accomplish; running down information about a community, association or property; or troubleshooting umpteen potential issues that could derail a property search, transaction or closing.

Unlike many jobs, no two days are the same. One week could be plagued by multiple snags (a buyer’s financing falls apart, home inspection issues, etc.), and on another day, it may all come together in an eerily smooth manner. But never fear; in this business, the other shoe is always about to drop.

Speaking of the other shoe dropping, there is no guarantee that the time spent and the hours put in will result in a paycheck.

Agents can’t bill for the time and effort they’ve expended giving advice and information, showing properties, attending showings, creating and hosting broker and consumer open house events and more.

The buyer may never buy; the seller may never sell, and the agent’s paycheck is affected by other people’s circumstances and decisions.

The enthused buyer could have job transfer fall through. An unexpected medical situation could put a house hunt on hold for someone else. Or a couple of sellers could suddenly decide they love their house more than they did before.

The agent — if he or she is lucky in these cases — will get a “thank you.”

Marketing

Then there is the marketing and business development agents pour into their brand, knowledge and expertise. That website, newsletter, postcard, video or other marketing pieces (social media posts, custom property ads) didn’t appear out of thin air.

Agents devote thought and resources to each marketing piece with an eye toward implementation, execution and tracking results at every turn.

In short, real estate is a profession full of follow-up, follow-up, follow-up; multi-tasking; prioritizing, re-prioritizing; juggling; figuring out how to be in three places at once; evaluating, advising and coaching; hand-holding; researching and problem-solving; and responding.

Despite what reality television portrays, agents don’t simply ride around in expensive cars or have their private driver take them to unlock a door. They don’t show up in designer clothes at some swanky place to negotiate a deal over trendy cocktails.

It might appear glamorous and easy, but showing a customer properties or putting a home on the market happens sometime in the middle of a very involved process.

Marketing, branding and creating top-of-mind presence usually comes first, and those are the things that motivate customers to choose an agent.

Agents are the catalyst for the entire process of buying, selling or renting a property; and, from that perspective, they help keep the economy moving in every sense of the word.

By Cara Ameer, Inman.com

Posted in News
July 12, 2017

Austin Home To Most Expensive ZIP Codes In Texas To Rent An Apartment

Austin, Real Estate, Downtown, Most Expensive, Condos, Rent, Zip Codes, Texas

It’s true what they say: The rents are too damn high. Three of the top five most expensive ZIP codes in which to rent an apartment are in Austin, according to a new study. Researchers at RENTCafé have compiled a list of the top 50 most expensive ZIP codes in the state to rent an apartment, with Austin figuring prominently on the list. Three of the most expensive areas are in Austin, with the other two in Dallas, according to the findings. 

The most expensive ZIP code on the list is 78701 in the city’s central business district. Renting an apartment in trendy downtown will set you back nearly $2,500 a month, according to researchers—more than twice the $1,063 national average. And that’s even after a 3 percent dip in average rental cost from last year, researchers found.

The downtown sector’s average $2,475 rent for ZIP code 78701 may be the priciest in all of Texas, but adjacent ZIP code 78703 isn’t far behind with the state’s second most-expensive average rent costs at $2,393. The region covers Central Austin neighborhoods, including Clarksville and Tarrytown, forming an enclave of affluence with 78701, researchers noted. 

In fourth place, Austin’s 78705 ZIP code covering University Campus and parts of Hancock, has an average rent of $2,102. That’s a 5 percent year-over-year price gain, while inventory remained unchanged at 5,524 units, researchers found. Bounded by the University of Texas at Austin on two sides, 78705 is home to such swanky developments as University Towers, with amenities that include a rooftop pool and sun lounge, media room and walk-in closets, researchers noted. 

Dallas round up the top five list…

Dallas rounded up the top five list with the 75201 ZIP code, where renters shell out an average $1,907 monthly. All told, Austin had nine ZIP codes in the top 50, according to the research.

Some good news from researchers: The state’s biggest cities are still considered to be affordable - especially when compared to other thriving urban hubs around the country - with average rent in Texas at $1,063, well below the national average.

The top 12 most-expensive ZIP codes in Texas are:

  • 78701, Austin, $2,475
  • 78703, Austin, $2,393
  • 75225, Dallas, $2,188
  • 78705, Austin, $2,102
  • 75201, Dallas, $1,907
  • 77006, Houston, $1,889
  • 75205, Dallas, $1,884
  • 77005, Houston, $1,859
  • 77002, Houston, $1,800
  • 77004, Houston, $1,794
  • 77019, Houston, $1,772
  • 78702, Austin, $1,711

Other Austin ZIP codes on the most-expensive list were: 78704 in the 27th position, with average rent at $1,513; 78732 with $1,486 average rents, 78746 at $1,477 and 78751 at $1,461 in the 31st through 33rd slots, respectively; 78735 in the 36th position, with average rental cost at $1,444; and at 38th, 78738, $1,416; To see the full report, click here

As part of its methodology, data compilation, analysis, and mapping done by RENTCafé utilized rent and construction data provided by Yardi Matrix. ZIP codes with less than 200 rental units and less than 3 properties were excluded from the calculations, as were single-family homes and town homes. The average rents were derived by combining all property types, including studio, -one, and -two bedroom apartments. Average rent prices are as of March 2017.

By Tony Cantu, Patch.com

Posted in News
June 20, 2017

Boomers Look to Real Estate to Afford Retirement

Baby Boomer Selfie Austin Texas Real Estate RetirementAs many as 10,000 baby boomers retire daily. Members of this generation are increasingly looking to real estate to diversify their retirement portfolios and boost returns.

Many boomers have realized their retirement plans are not sufficient and have turned to alternative investments, such as real estate, to compensate. About 30% of baby boomers have no retirement savings and one-quarter have less than $50K saved, according to research by GoBankingRates.

These boomers, who were born between 1945 and 1964, survived the Great Recession and were raised by parents who survived the Great Depression. They have been employed in a world where pension funds are growing less common and employer-led 401(k) retirement accounts are increasingly more common.

Paying for Predictability

“The alternative investment world doesn’t become more popular until it’s time for people to retire,” The Entrust Group Director of Professional Development John Paul Ruiz said. Entrust provides services for self-directed individual retirement accounts (IRA), which, unlike typical IRAs, allow for alternative investments like real estate.

Retirees typically want their investments to become more stable before making withdrawals.

“Many of our clients think, ‘What other types of investments can I hold in my IRA that are outside the securities world because I can’t handle another crash?’ Ruiz said.

Residential Versus Commercial Investment

Many turn to commercial real estate because the monthly rent they can collect does not undergo the highs and lows of stocks and bonds. Precious metals, notes and timber have also become more popular. Investors recognize residential real estate in core markets typically increases in value with proper maintenance, and owners can collect rent on the asset.

In the commercial world, leases run several years, allowing the stability of collecting rent to transcend smaller cycles, CBRE Managing Director of Global Industrial and Logistics Jack Fraker said.

Within real estate, single-family homes remain the most popular asset for IRA holders to purchase, according to research from The Entrust Group. In 2016, more than half of the real estate purchases made by Entrust clients were for single-family homes. Last year, more than a quarter of clients purchased multifamily properties, and about one-fifth purchased raw land.

“Within the last 100 years, the best places to put money is in the marketplace and in real estate. One of main reasons [why] is familiarity. You may not ever talk to the money manager of your mutual fund. But with a real estate asset, you can see it; you can meet your tenant,” Ruiz said.

retirement saving moneyInstitutional Versus Individual Investment

Private, individual investors are not the only ones cashing in on real estate holdings. Institutional investors have increased the percentage of their real estate holdings recently, Fraker said.

“It used to be more like 5% of their assets were in real estate, but has certainly doubled over the last 10 years. That’s good for us [in real estate] because it means more of their money is going into our assets and less into stocks and bonds,” Fraker said.

Hard assets’ ability to withstand economic cycles better than Wall Street makes real estate a more attractive and less risk-prone asset for investors.

Looking to Future Generations

When Generation X, the generation following baby boomers (born between 1965 to 1979) begins to retire in greater numbers, The Entrust Group's Ruiz said he is unsure what their investment patterns will look like. Many of the real estate assets bought by boomers will be inherited by Generation X, and there is not enough data yet to know what Generation X will do with those assets, Ruiz said.

“But there is a new generation of people getting more familiar with self-directed IRAs," Ruiz said. "Many have accumulated wealth through them, and those getting involved in self-directed IRAs are younger and younger."

By Julia Bunch, Forbes.com

Posted in News
June 14, 2017

Austin's Housing Boom Makes Way for Quirkier Home Styles

architecture austin texas real estate designJames Bond meets Midcentury Modern. Italianate villa - with a sky bridge. A white stucco and steel home primarily designed for cars. These are some of the luxury home styles you’ll find in Austin, Texas, where the transformation of the city from laid-back college town to high-tech magnet is rapidly reshaping the architectural landscape.

New homes are going up fast. Single-family home permits are up 138% over the past five years, according to census data. The median price for single-family homes has increased 48.2% from $250,000 in April 2012 to $370,600 in April 2017, according to the Austin Board of Realtors.

Meanwhile, city ordinances designed to limit the size and density of new homes have had some unintended consequences. To get around size restrictions, homeowners are adding more carports and screened-in porches, which qualify for a larger exemption than garages. The result: some odd workarounds and construction quirks that add to the eclectic look of many new or renovated homes.

The current landscape in Austin

Right now, the landscape is “fluid,” says Matt Fajkus, principal of Austin firm Matt Fajkus Architecture. “Sometimes, while we are working on a house, the entire neighborhood will change,” he says. “It’s an interesting challenge. Are you designing something for the way the neighborhood is now or how the neighborhood will be?”

architecture austin texas real estate designIn older neighborhoods near downtown, tiny, dilapidated shacks sit across the street from new boxy white contemporaries. Frank Lloyd Wright-inspired mansions are cattycorner to what look like breezy beach bungalows.

Mr. Fajkus, who is also an associate professor of architecture at the University of Texas, recently finished designing a 1,000-square-foot, one-bedroom home in the Bouldin Creek neighborhood that cost about $1 million to build. The modern white stucco and steel house was designed around a couple’s vast vintage-car collection and includes 2,000 square feet of garage and outdoor space. The home’s upper-level cantilevers are 20 feet out from the box-shaped lower level.

The owners, John and Lisa Weinberger, moved from Chicago to Austin in 2014, when many homes in Bouldin Creek were rundown. They bought a new four-bedroom spec house, then bought the lot next door and built their new modern home - mainly used as a place to put their cars.

Is Austin losing its identity?

 “Houses are coming down by the week,” says Mr. Weinberger, 85, an auto-dealership owner and car racer. Just down the block from the Weinberger property, a plain 1,412-square-foot house is listed for sale - with marketing that suggests it is ideal as a teardown or gut renovation. (“What a lot!”) The asking price: $650,000.

The rapid change has some locals fearing that Austin will lose its identity. “It’s not just the streetscape and character we are losing, it’s also visual elements of our city’s past,” says Kathie Tovo, an Austin City Council member and the city’s mayor pro tempore.

Luxury is being redefined

Scott and Cindy Trainer recently custom built a 3,700-square-foot, four-bedroom brick-and-stucco home for over $1 million last year in the Zilker Park neighborhood. Asked to describe the style, Mr. Trainer hesitates: It’s a combination of Midcentury Modern and classic James Bond, he says, pointing out both the long cedar roof overhangs and the floor-to-ceiling steel-framed glass walls.

architecture austin texas real estate designAustin architect Michael Hsu, whose firm designed the Trainers’ house, says “luxury is being redefined here.” The only unifying stylistic theme he sees is what he calls “casual modernism,” which he describes as modernism that is authentic and accessible. His clients are moving to Austin from places like New York, Los Angeles and San Francisco because they want a lifestyle shift; they don’t want the kinds of homes they’ve left behind. “Everyone deserves a place to live of their choosing. There’s not a prescription for Austin for how you should be.”

Mr. Trainer, 57, moved to Austin in 1982 from upstate New York after visiting his brother. He got an environmental-engineering job and moved to the Zilker Park area, first buying a small bungalow for $56,000, renovating it and selling it for $100,000 in 1991. That same year he bought a ¼-acre lot for $50,000 and built a three-story home, selling it in 2011 for $1.3 million because he and his 46-year-old wife, a real-estate agent, wanted a home better suited for their two children.

Their new house replaced a larger, 4,500-square-foot home with a pool they bought for $650,000 that hadn’t been updated since 1959. Mr. Trainer, who became a commercial real-estate developer in 2004, had admired the property for years because it is on a bluff overlooking a large park and part of the Austin skyline.

The house, slightly angled, is designed with minimal windows facing the street. Instead, all-glass walls on the back of the home face the park and expansive skyline. It has concrete floors, soaring ceilings and a splayed back that folds around a courtyard and swimming pool. The master bedroom and bathroom are in a wing that is 4 feet higher than the rest of the house, a way to get separation, since the subdivision doesn’t allow homes with more than one story.

The “McMansion Regulations”

Currently, the City of Austin has what it calls “McMansion regulations” that limit the scale and bulk of new construction, remodels, and additions to make sure homes are compatible with existing neighborhoods.

While the goal of the McMansion ordinance was to preserve the character of neighborhoods and has helped curb size, some detractors say it has also had negative effects. For example, carports don’t count as square footage under the ordinance, but garages do. As a result, more carports have been built, affecting the appearance of the neighborhoods.

CodeNext

Recently, the city has proposed a new land-development code that may further change the face of neighborhoods. Dubbed CodeNext, the goal is to update and consolidate regulations and deal with the issues of neighborhood density, affordability and livability. “The goal is to preserve what we love and improve what we don’t,” says Alina Carnahan, who is working on CodeNext for the city.

architecture austin texas real estate designJamie Chandlee, a 2005 graduate of the University of Texas, moved back to Austin in 2010 to take a job with Facebook, which had just opened an office there. She met her future husband, Blake, who also worked for Facebook, and in 2012 they moved into a five-bedroom, five-bathroom mansion they bought in the Tarrytown neighborhood.

Two years ago, the couple embarked on a $300,000 addition to their 6,000-square-foot home, built in the Italianate style, with a red-tile roof and rounded rooms. They wanted a playroom but couldn’t change the footprint of the house because of limits on “impervious surfaces” - which is any surface like a roof or driveway - that can’t absorb rainwater.

So they asked Hugh Jefferson Randolph - the home’s original architect - to enlarge the space over the garage and link it to the second story of the main house with a sky bridge. The addition gives their Old World-style home some decidedly modern touches.

Variety makes Austin unique

Since they moved to Tarrytown, there has been nonstop construction in the neighborhood, Mrs. Chandlee, 34, says. Around the corner, a modern home sits next to a small bungalow. A few doors down a nondescript two-story, five-bedroom, seven-bathroom home with a three-car garage and a swimming pool is replacing a 2,972-square-foot ranch house built in the 1950s.

“There’s a lot of variety. That’s what makes Austin unique,” says Mrs. Chandlee. “The thing that bothers me the most is just that there are people out there who are just so desperate to sell that they can’t wait to get fair market value on their home,” he said. “I mean, honestly, wholesaling in my opinion has a place in the marketplace.”

By Nancy Keates

Posted in News
June 1, 2017

What's Up With Those Handmade 'We Buy Houses' Signs Around Austin?

Bandit Sign Real Estate AustinYou’ve probably seen them while driving around town – those handwritten signs next to the road with messages like: “We buy houses for cash! Call now!”

In the latest installment of our ATXplained series, Austin resident Jennifer Kolb asked:

“What’s the story behind those homemade real estate signs? Who’s looking to buy up these houses, and what actually happens when someone calls their number?”

Kolb is a graduate student studying social work at UT. Before that, she worked for an affordable housing nonprofit.

“Every day on my way to work, I would pass this hand-lettered, white-with-black-marker sign that just says, ‘We buy houses for cash fast!’” Kolb said. “And I was just like – what is that about? That’s weird.”

She also wondered about the method of advertising.

“It was interesting to me because – why a handmade hand-lettered sign if you have enough money to buy my house outright?” Kolb said. “Why don’t you have a nice fancy sign or a billboard or an ad? You know, it’s very anonymous-seeming.”

Kolb thought about calling the phone number listed on the sign, but she was wary. She thought it might be a scam or a way to profit off Austin homeowners who were having trouble paying rising property taxes.

“I’m very aware and conscious of the crisis of affordability, the ways that I have seen just in the time that I’ve lived here, East Austin change drastically, you know, much more white, much more hip," she said. "I’m very attune to the ways that I see people trying to make money off of that.

Following The Signs

It’s not hard to spot these homemade real estate signs around town. We found one in North Austin at the intersection of 53rd and Duval Streets that read “Compro casas feas,” or “I buy ugly houses.” The man behind that sign is Angel Martinez. He said he’s been in the real estate business for only about a month and things have been fairly slow.

“I’ve gotten pretty much people that are calling, and then they don’t want to follow up, and yeah, it hasn’t been too lucrative yet,” he said.

austin real estate bandit sign wholesaling investorMartinez is part of a team that is buying up houses around Austin and then quickly selling them to investors. He and his partners advertise to people who are looking to sell their homes fast. When someone calls, he’ll ask a series questions to determine the value of the home – whether the owners have a mortgage, whether the home needs any repairs. If he decides the house would be a good investment, he’ll offer to buy it with cash.

Martinez said he typically closes these sales within two days. The tradeoff is that wholesalers like him buy houses for less than the market rate. Martinez said he typically offers at least 70 percent of the home’s market value, and the owners agree to take a loss in exchange for a quick, cash transaction.

“Usually, we mostly work with distressed sellers, people that are having trouble,” he said. “Maybe they fell behind on their payments, that they’re getting a divorce or anything like that, and you know, we offer them an easy and fast way out.”

Then, Martinez will turn around and sell the house to a real estate investor. He said he typically makes a $5,000 or $10,000 profit on those transactions. He’s been putting signs all around the city, not focusing on one particular neighborhood, though he said more and more wholesalers have their eyes on property in East Austin. As for the strategy behind using handwritten signs, Martinez said it’s cheap, and he’s heard that these signs are more effective.

“I’ve heard in a bunch of videos that more people get more feedback from the handwritten ones than the ones that are printed out,” he said. “I guess it makes people feel more like they will be talking to somebody more local, makes people call back a little more than the regular ones that are printed out.”

Kolb was surprised to learn the homemade signs were a marketing strategy to try and make the buyer seem local.

“I hadn’t thought about that component of the transaction seeming more possible and fast if it’s someone down the street from you that you can just run over and check in with,” she said. “I hadn’t thought about that, but I don’t think they’re marketing it at me.”

Catching 'Bandits'

It turns out, many of these signs are illegal. John Hale is an investigator with Austin’s Code Department. He calls these roadside advertisements “bandit signs.” Hale said it’s against city code to post these signs in a right of way or on public property, which, of course, is where you typically see them.

“I mean, it is a Class C misdemeanor so it’s punishable up to a $2,000 fine,” Hale said. “We always like to give people the benefit of the doubt, you know, a new business, they may not have known. We educate them, and then they don’t do it again, but if they continue to violate the city ordinance, then yeah, we would pursue charges.”

Hale said the code department does sign patrol on the weekends, picking up and throwing away these bandit signs. But it’s not long before new ones pop up.

The Wild, Wild West

Barrett Raven, a real estate agent and investor in Austin, has a slight fascination with learning about the wholesale market.

“Wholesaling is kind of like this Wild, Wild West right now of real estate, especially in Texas,” Raven said. “I mean, ask a Realtor right now, like, ‘Hey what’s wholesaling? What’s wholesale investing?’ Most people have no idea what it is, so it’s kind of this super niche subgroup of real estate investors, even, who are using this practice.”

Raven said he’s bound by a different code of ethics, and he wouldn’t try to buy someone’s home for less than fair market value. But when it comes down to it, wholesaling isn’t illegal.

“The thing that bothers me the most is just that there are people out there who are just so desperate to sell that they can’t wait to get fair market value on their home,” he said. “I mean, honestly, wholesaling in my opinion has a place in the marketplace.”

By Syeda Hasan, KUT.org

Posted in News
May 26, 2017

Uber and Lyft return to Austin on Monday

Uber Lyft Return to AustinUber and Lyft will relaunch services in Austin on Monday, now that Texas lawmakers have passed a bill overriding local regulations on ride-hailing companies. 

Texas Gov. Greg Abbott is expected to sign House Bill 100 into law the same day. That measure establishes a statewide framework to regulate ride-hailing companies and undoes local rules that the two companies have argued are overly burdensome for their business models.

"Austin is an incubator for technology and entrepreneurship, and we are excited to be back in the mix," Uber spokesman Travis Considine said. "... We know that we have a lot of work to do in the city, but we couldn’t be more excited for the road ahead." 

"We're excited to return to Austin on Monday. As we've said for months, we will relaunch in the city as soon as Gov. Abbott signs HB 100 into law," Lyft spokeswoman Chelsea Harrison said.

Why did Uber and Lyft take a leave of absence?

Uber and Lyft left Austin after the Austin City Council passed an ordinance in December 2015 requiring ride-hailing companies to perform fingerprint background checks on drivers, a stipulation that already applies to Austin taxi companies.

Uber and Lyft fiercely opposed the rules, gathering petition signatures to force a public vote and spending nearly $9 million on an unsuccessful campaign asking voters to overturn the regulations. Following the vote, both companies halted services in Austin, and the resulting ride-hailing vacuum attracted several start-up ride-hailing apps that agreed to comply with the city's rules.

If HB 100 gets the governor's stamp of approval as expected, it would standardize ride-hailing regulations statewide, requiring companies to have a permit from the Texas Department of Licensing and Regulation, pay an annual fee to operate, and perform local, state and national criminal background checks on drivers annually. It doesn't require companies to fingerprint their drivers.

At a public bill signing for a different bill Thursday, Abbott declined to comment on when he would sign HB 100 into law. "Now, you know I’ll tell you about that when I get ready to sign it," Abbott said.

Following the passage of the bill in both chambers, Austin Mayor Steve Adler issued a statement saying he was "disappointed" the Legislature voted to nullify regulations the city had implemented.

"Our city should be proud of how we filled the gap created when Uber and Lyft left, and we now must hope that they return ready to compete in a way that reflects Austin’s values," Adler wrote.

It's unclear what Uber and Lyft's plans will be in other Texas cities once the bill is law. Uber previously reached an agreement with Houston to stay in the city, which also required fingerprint background checks, through Super Bowl LI, which was held on Feb. 5, 2017. 

By Alex Samuels, TexasTribune.org

Posted in News
May 22, 2017

Austin housing market poised for another hot summer, says new report

Barton Springs Pool, Austin Texas, SummerAustin may have seen a mild spring selling season, but the market is poised for a hot, hot summer, according to the latest monthly report from the Austin Board of Realtors.

"After a slow beginning to the year, increases in single-family home sales, homes on the market, and housing inventory across the region in April 2017 indicate that the Central Texas housing market is ramping up for a strong summer selling season," says ABoR president Brandy Guthrie in a release.

Let’s look at the numbers…

In April 2017, the metro area saw a 3.2 percent increase in home sales compared to April 2016. Overall, 2,640 houses were sold in the Austin-Round Rock metro, with a median price of $305,000 (up about 6 percent from the previous year). Active listings jumped almost 17 percent year-over-year, indicating the potential for a hot

In Austin proper, home sales grew 2 percent in April 2017. Active listings grew significantly here too — almost 15 percent year-over-year. A single-family home in the city will cost you, however. The median home price? A whopping $370,600. 

Those looking for more affordable housing options should note a recent report from Metrostudy, which shows that Central Texas experienced 14,392 new home starts in the first quarter of 2017 alone. Many of these new builds are found in the suburbs of northeast Travis County and throughout Williamson County. 

Why so far from Central Austin?

"Rising development and construction costs, as well as regulatory hurdles, however, are impeding growth in some markets, causing some builders to look outward in attempt to meet buyers' affordability needs," says ?Vaike O'Grady, Austin regional director for Metrostudy.

The submarkets with the most new home starts are Cedar Park/Leander West, Pflugerville, Kyle/Buda, Hutto, and Del Valle.

 By Nicole Raney, CultureMapAustin.com

Posted in News
May 8, 2017

Popular Austin ZIP code ranks among best places for millennials to rent

Austin Millenials

Austin is the dreamiest city in America for millennials, but where should they live? Central Austin, according to a new study from HomeUnion.

The real estate investment firm analyzed 46 metro areas with a population of 1 million or greater to determine the best places for millennials to rent or buy a home. While Austin doesn't make the cut among the best places to buy - no surprise there - Central Austin, specifically 78705, appears at the top of the list of the best places to rent.

What researchers are saying…

"We know that millennials would like to own a home, but we also know that they struggle to find suitable for-sale options near major employment centers due to high home prices and low inventory," says Steve Hovland, director of research, in a release. "To help millennials with their housing predicament, we created a comprehensive list of ZIP codes that are the most affordable with excellent public schools, and also have the shortest commute times to job centers."

The study considered public school ratings, commute times, and affordability. For the best places to buy, the monthly mortgage could not exceed 28 percent of median household income. For the best places to rent, a rent-to-income ratio of 2.5 times was used. 

Where does Central Austin rank?

Central Austin ranks No. 3 on the rental list, coming in just behind submarkets in Milwaukee and Louisville, Kentucky. The 78705 ZIP code boasts a public school rating of 86 and an average commute time of 33 minutes. Monthly rent is $1,904, 39 percent of the median household income of Austin-area millennials. 

Austin is the only Texas metro to appear on either list. Millennials who want to achieve the dream of homeownership should consider submarkets in St. Louis; West Palm Beach, Florida; Pittsburgh, Cleveland; and Oklahoma City, the top five metros on the list. 

By Arden Ward, CultureMapAustin.com

Posted in Leases
May 2, 2017

Temperatures are Rising: 5 Ice Cream Shops to Try this Summer

 Austin Ice Cream Summer Cow Tipping Creamery

Lick Honest Ice Creams (3 locations)

Unique in flavor, Lick guarantees a farm-to-table product that is always fresh and delicious working directly with local farmers and food artisans to source their fine ingredients to make the most ‘honest, ice creams possible.

Cow Tipping Creamery (4715 S. Lamar)  

CTC started as a food truck in 2012, but now it has a brick-and-mortar on S. Lamar as well. They specialize in “stackers:” layers of soft serve and homemade toppings. You’re guaranteed a unique dessert that you’ve never experienced before.

Prohibition Creamery (1407 E. 7th Street)

A boozy ice cream shop with a cool, speakeasy feel to it with leather tufted seats, dark, wood floors, and a copper bar with low hanging lights. The ice cream and milkshakes are infused with alcohol, making for a unique combination of two of the best treats in life: cocktails and ice cream!

The Science Cream (1511 S. Congress Avenue)

The first liquid nitrogen ice cream shop to open in Austin, Texas in November of 2015 by the Vaca family. The Vacas had a vision of creating a fun dessert business that will not only amaze by the flavor but entertain as well.

5. Amy’s Ice Cream (Multiple locations)  

An Austin institution established in 1984 handcrafting artisan super premium ice creams - home of the world famous Mexican Vanilla. You’re sure to get friendly Austin vibes at each location!  

Posted in News