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What if I told you there was a way to buy a lake house (or other vacation property), and get someone else to pay for it? Seems crazy, I know, but I've done it. Twice. Let me tell you my story...

First of all, like a lot of people, I've always wished for a lake house near Austin. I've done well in my career, but not to the point that I could plunk down 20% on a decent place *and* afford two mortgages. But in 2019 I stopped wishing and asked myself how I could make it happen.

To make a long story short, my strategy involved two key things:

(1) Partnering with friends whom I enjoy hanging out with, who also have kids around my daughter's age. This cut my down payment obligation down from 20% to 5% and does the same thing for operational expenses.

(2) Putting the property into the short-term-rental pool for much of the year. Generating rental income has allowed us to not put a nickel towards paying our mortgage, insurance, etc. Our best month to date was this past July with over $21,000 in gross rent!

You can take a look at the property...

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I'm sure everyone has heard the news over the last 6 months that the Austin real estate market (and many others around the country) has been extraordinarily hot.

Stories of sellers getting 50 offers on the day they list, and stories of buyers having to offer $100,000 over asking with appraisal and inspection waived are fading into (recent) history.

It is still a sellers' market, though.

Roughly two weeks of inventory in Austin proper, and about 3 weeks in the MSA. For reference, a "balanced market" carries about 6 months of inventory. I say all of this to indicate that if you've been thinking of selling - now may be the perfect time.

The overall market has risen by 40% year-over-year, it is still very much a sellers market, and if you price accurately, you can still count on multiple offers and getting under contract within a few days.

If you've been thinking of selling and would like me to tell you what your home is worth, click the "Get in Touch" tab.

Or just want to chat? I'd be happy to buy you a coffee and meet up!

RR

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I can't tell you how many times I have had this conversation in the past few months with my friends and neighbors here in Austin: 'Man, I would love to sell my house right now, but... where would I go?". It's true! This is a fantastic time to sell - competition is fierce and you can get top dollar and amazing terms. Let me share some ideas with you all, and perhaps we can chat some more if any of these resonate with you.

Move on up: We have some friends who have wanted to move to a larger house with room for a pool for a few years. They finally felt they were ready financially, but they were worried about the problem I just mentioned: they could get top dollar, but how could they compete for a new larger home? Putting in a contingent offer certainly wouldn't be competitive with cash. Here is what they did: listed their current home with a fairly aggressive (low) price. Buyers flocked and within a day they had an offer for cash, 10% over list, appraisal waiver and lease-back for free until September. Now they have cash in the bank and 4 months to shop for a new...

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As the parents of a young daughter, my wife and I started thinking about college expenses before she was out of the womb. We have a 529 set up, and we put money in every month. We're trying to be smart about saving for college, and I hope that any of who you read this are being smart, too.

Having said that, I am still learning! I have known a couple of people who bought homes to house their college-bound children, and it seemed a smart move. After doing some digging, I can say it is a *very* smart move!

Consider this scenario... There are a lot of assumptions in here, and I can certainly walk you through them if you are curious, just email me. I compared on-campus housing through UT Austin, off-campus housing near UT Austin, and buying a condo near UT Austin. As you can see, there is a considerable difference when you have a salable asset at the end of 5 years, compared to simply writing a check to a landlord.

Now consider that you can legally utilize 529 funds to charge your child rent - up to the university says a room costs - while they are in school. See...

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Colorado Weather

There are few good things about this Global Pandemic - I'm definitely OVER IT. However, if you have a mortgage, the last few months have been the best time in history to refinance. All my mortgage broker friends have been SWAMPED (and I know some great ones - hit me up!). But Fannie & Freddie will start charging 0.5% for Refis on September 1st - see this Axios Article for why. However, if you're buying a home, the extra fee won't apply, so these historically low rates still apply to you if you're moving!

Another, possible, long-term benefit of Covid-19 may be the move towards remote work for many information workers. This opens up a world of possibilities for those who can work from anywhere. If you could live anywhere, perhaps a larger home (with TWO home offices??) would be nice? A pool? Bigger lot, lower taxes, better weather? What would make you move, and could you save big money doing it? Maybe so - hit me up if you'd...

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First of all, let me say that these are frightening times. There is a global pandemic that has sickened millions of people, killed hundreds of thousands, destroyed millions of jobs in the USA and the effects will echo around the world for years and years. I'm praying for everyone affected. We are in a recession, officially, in the USA, and with stock market volatility, interest rate confusion and even news of oil prices going negative - all leaves us shocked and confused.

The impact of all of this for Austin real estate, so far at least, has been fairly straightforward: new listings have slowed substantially and some were pulled. However, there are still folks who are looking to buy. When demand is fairly steady, but supply suddenly dips- the result is that prices are rising and "days-on-market" are going down.

If you've been thinking of listing, this is a unique time - especially in the $500K-$2M price range. If you're shopping for investment properties in the less-than $500K price range, my feeling is that prices won't be dropping for a few more months. If you have...

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Vacation Home

If you're like most people, you've had dreams of owning a vacation getaway. Maybe a lake house? Something at the coast, or a condo near a ski resort? For most people it is out of reach because of the large upfront cost, and of course, ongoing payments with a traditional mortgage. Here are some strategies that can bring the dream closer to reality!

One approach is to buy a property and place it on a short-term rental site like VRBO or AirBNB when you're not using it. You need to ensure that there aren't any barriers to this via local law, HOA or Condo Associations. This brings in revenue to help offset costs like debt service, taxes, maintenance, etc. Of course, this has challenges if you're remote - cleaning after guests leave, damage, etc. I recommend using a property manager to assist with these tasks, but of course, that adds a cost.

Another approach, to use in conjunction with the first, is to partner up! If you have some friends who have a dream similar to yours, you can purchase a property together, splitting the upfront costs as well as ongoing ones. For this...

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Check out this story from the Austin Business Journal. Austin expected by many economists to be the top performing real estate market of 2020. If you are interested in investing - it is not too late to grab some appreciation in this market. Additionally, if you are renting, this is a great time to consider buying. There are many loan programs that offer down payments as low as 5%. Reach out to me if you would like to get more information!

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Real Estate Ladder

Use a strategy I call "the ladder" for retirement income.

What if you could make five-figures (or more) per year, tax-free, in your retirement? It's possible using a strategy I call The Ladder. Here's how it works. Each year you purchase one rental property. Between now and your retirement, you have a tenant in your property that covers your mortgage and a reserve. Ideally you also have some cash flow, but for the purposes of this strategy, that isn't necessary. To illustrate, let's assume your properties average $250,000 in current value and you're 15 years away from retiring.

15 years from now, you're property should be worth $378,000, assuming 3% appreciation. If you put 20% ($50,000) down to acquire the property, you would owe approximately $138,000 on your initial 30 year mortgage. That gives you equity of $240,000. At this point, you could do a cash-out refinance at 80% Loan-to-Value, of $190,000. Assuming you include your $138,000 remaining loan balance, you can "withdraw" nearly $60,000 of equity in the form of a loan, which isn't...

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