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Asked by Surf760, 78748 Sat Mar 27, 2010

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Answers

16
Tim Hunke, , 78746
Mon Mar 29, 2010
BEST ANSWER
Surf:
Your CPA should be brought into this question also. I am a mortgage banker and believe that our market is stronger than many of the other cities in the country. However, being an absentee owner is very difficult. I know this from experience. If you can sell the property and make a profit, that sounds good. As this property gets older then the maintainance increases and that is where your problems increase.

Owning real estate is a hedge against inflation and your CPA is in a better position to give you good advice. If you don't have one that you can contact, I have several here in Austin that I can refer you to if they are needed.
1 vote
Dan Chase, Home Buyer, Texas City, TX
Mon Mar 29, 2010
You can do whatever you want to. I would take a guaranteed profit over a hopeful refinance and maybe profit later. No matter if you make or lose more money the peace of mind you seek will pay for itself. Why continue with something you do not really want to do? You have a better alternative now. I would take it.

Consider the site below.
http://www.housingpredictor.com/texas.html
A younger upwardly mobile job market boosted home sales in Austin as first time buyers took advantage of the government tax incentive. But with the tax credit expansion sales slowed. However, sales should improve by spring time in Austin, aiding a market that has remained one of the stronger in the nation. Austin is still forecast to experience average housing inflation in 2010 of 3.1%.
1 vote
Steven Nusin…, Agent, Austin, TX
Sat Mar 27, 2010
This definitely is a nice situation. I have several out of town investors wondering the same thing. For the last several years, I have steered them to 78748 and 78745...and there has been nice steady price appreciation.

It is always nice to take a profit(especially with the reduction in your closing costs), but I feel the area still has some of the best potential in town.
1 vote
Charles Whee…, Agent, Austin, TX
Tue Mar 30, 2010
A bird in hand is worth two in the bush. Austin is a big city and some areas are appreciating while others depreciate. It is tough to follow trends when you aren't local, but Austin is one of the better markets to be in. We have some built in factors that stabalize our economy (UT and Govt).
0 votes
Randy Stevens, , Austin, TX
Tue Mar 30, 2010
I'll cut to the chase...the best thing to do is to let me free you of your headache by allowing me to buy it from you. :). Visit the link below for the quickest response.
0 votes
Randy Rehler, , Austin, TX
Tue Mar 30, 2010
You have a fair profit and negative cash flow. Your decision in my estimation is what is your expected appreciation and cash flow projections over the 5 - 7 year holding period. If your rate of return is acceptable to alternate investments then hold, if not cash out.
0 votes
Don Groff, Agent, Austin, TX
Tue Mar 30, 2010
Selling the property sounds like it makes sense, especially if you do not like being an out of state landlord. Here is a market report you can request to pull comparable sales and sold homes in your neighborhood. You can use this information when talking to your Realtor about a fair market price for your home.

The information can be requested at http://myhomesvalue.austinrealestatescene.com and it will provide you a detailed report with information pulled directly out of the Austin MLS. This report will consist of all homes currently listed and homes that have recently sold in your neighborhood. It also gives data like average time on the market and even average asking price as compared to average selling price.

Wish you the best of luck in whatever decision you decide to make.
0 votes
John A. Hay…, , Austin, TX
Mon Mar 29, 2010
Good evening,

You have received many great answers. As a Real Estate Attorney in Austin I work with many investors just like you. We handle all their legal needs as well as the title closing for their sale. If I or my firm can be of assistance please do not hesitate to contact me. Below is the link to our website and additional information.

Best of luck in your decision!

John Hay
512-467-6060
http://www.haycompere.com
0 votes
1st Zero-Emi…, , Austin, TX
Mon Mar 29, 2010
crystal ball for Austin 78748 in 5-7rs is awesome!

You said it yourself though, you don't enjoy managing this liability from afar. And yes, if it is not cash flowing for you, it is a liability. It becomes an asset to you once it cash flows.
Its common to see people "investing in real estate" backwards.

Anyhow, that's a whole other conversation. But, you are where you are with this one, so if you can continue to stand the weight on your mind, then yes, I'd hold out for 5-7 yrs.

If its just not that fun for you, then I know San Diego is the time right now, so go ahead and pull out here while it's easy and move your funds to a closer investment (of which you should be buying at a distressed market price.

Sounds like you did a 3/1 arm (or 5/1 arm) here on this property in Austin, and maybe even with zero down?
For the home not to cash flow yet, the fundamentals simply weren't in place to call it an "investment". This home you bought here is the type of home you hang on to for 20/30 years in order to make it a real investment.

in the future, I recommend flipping homes if you prefer short scheduled returns. Do your homework on flips to though, so you know exactly how to buy the home "right", how to fix the home for profit "right", and how to sell the home "right". Otherwise, a flip house can eat your lunch too!

Good luck out there!
Oh, and my recommendation....
Go ahead and cash out and enjoy your life out there in San Diego. Yo ucan find the same low cash flow/long term investment out there in SD. (even though I recommmend changing your strategy)
0 votes
Surf760, Home Seller, 78748
Mon Mar 29, 2010
Thanks so much everyone for the perspectives! Back in '06 when I purchased in Austin it didn't seem likely I could every buy here in San Diego (my how things changed). Considering this may be my best shot at picking up another house locally here in SD, I'm going to go for it. Need to find out more on the 1031 exchange and luckily my brother is a tax guy.

Many Thanks,
David
0 votes
Betina Forem…, Agent, Austin, TX
Sat Mar 27, 2010
Dear David /Surf760,
Selling would lessen your headaches of long distance property management. 78749 is the hottest selling zip code in the country, being so close in 78748 is an asset. Selling to your current renters is a good bet in my opinion. If they have been good tennants that pay on time, they will most likely be good solid buyers. You should contact your tax professional to discuss the tax ramifications of a sale now versus later. I suggest speaking with your agent, they may have insight into your best course of action since they know you so well. I wish you the best of luck!
Sincerely,
Betina
0 votes
Richard Leci…, , Tucson, AZ
Sat Mar 27, 2010
I see higher captial gain taxes in the future. Talk with your accountant and maybe do a 1031 exchange
0 votes
., , Austin, TX
Sat Mar 27, 2010
Dear David:

Without knowing the exact address it is difficult to advise you. Zip 78748 lies in 10S and in SWE. 10S, near Wm Cannon and the end of Mopac, is one of the hottest selling zips in town for first time buyers. Get your realtor to do a broker price opinion (BPO) for you. It's all about the numbers, David. My gut instinct is to sell. Do not leverage your property! Get out, and buy in San Jose. SJ should be an extremely good buy right now. Your purchase or sell experience should not be stressful in either state; if so, change realtors. Your buyer in Texas should be pre-approved for a mortgage loan. After the sale, you need to get pre-approved to purchase from a California lender. Attach the pre-app letter to any offers you make in SJ and insist the same be done on your Austin sale.

Good luck,

Mary Strickler
Prudential
0 votes
Cara Collier, , Austin, TX
Sat Mar 27, 2010
How long have you owned the home? If more than 2 years for tax purposes, then take the offer from the renter/buyer and buy another SW Austin home. Or, as the last agent suggested, do a 1031-tax exchange and roll into another home. Texas is a great place and our economy is bouncing back and thriving. Plus it is a low cost of entry (Hello $200K or less on a 4 bed home!). I see a shortage of housing coming in Austin, TX. Area 10 is the hottest area with only 2 mo. inventory. Also areas, SWE and 11 are hot. More and more people move here to Austin everyday and home builders are going to be behind. (See Dallas & Houston post biggest population gains, followed by Austin! 3/23/10 See Yahoo Real Estate Article) I say sell to the buyers, if they are qualified and you agree to a good offer, and turn around and find a short sale which will cash flow on the rent somewhere in SW Austin. Happy to help! I know SW Austin homes for investment purposes.
0 votes
Bill Austin, Agent, Austin, TX
Sat Mar 27, 2010
Surf,
Overall from your remarks you are in a good position by having options that are positive.
78749 is a good zip code overall. Some areas are less attractive.
Austin is still having population growth.
Austin is having job growth.
Austin like most areas has very few "new construction projects" happening.
Many believe we will have a housing shortage here in the future. (supply & demand)
I have limited knowledge of San Deigo but do know an agent out there Marci Klientob if you need a local agent's
prospective. (Klinetob@ampf.com )

Bill Austin ~ 512-709-6343 ~ baustin.realtor@gmail.com
0 votes
George Mora, , Austin, TX
Sat Mar 27, 2010
Sell and buy locally. Look into doing a 1031 to minimize your tax impact. Austin is going to do well in any case, but how is San Diego doing? And how will it feel to know you are a drive away from the property you own. IMHO.
0 votes
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