It probably won't surprise real estate investors to hear that Austin is the number four city in the nation for gentrification projects. Of these, the one I'm personally most excited about is the Mueller Development that has no less than 11 major projects in the works to completely transform the area, which is three miles from downtown and the Capitol and two miles from the University of Texas.

If there's any place that screams, "Location, location, location" more than that, I don't know what it would be! Let's look at what's going on down there:

●      A 112-room, four-story Residence Inn by Marriott will go up at the southwest corner of 51st Street and Lancaster. With one and two-bedroom suites and studios, the Inn will be built for those who need…

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Hang in there, folks! Just a few more weeks, and we will have done it, survived another Texas summer. The temperature hasn't been the only thing red-hot in this neck of the woods since my last post in May, so let's do some catching up.

In my own business, we closed more transactions in the last six months than we did in all of 2011. The market is benefiting from interest rates sitting at an all-time low, and there are plenty of property bargains to be had. The specific numbers about key market trends calculated in June more than prove my point.

When you compare the June numbers to the same indicators a year ago, everything is trending upward. Sales of single-family homes are up 23% with average sale prices 5% higher than in 2011. The median sale…

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This will come as no surprise to anyone that has been stuck on MoPac in the morning, but Austin was recently recognized as the Second Best Real Estate Investment Market in the country by Realtor.com - Just behind Tucson, Az., and seriously, who wants to live in the desert?  With plenty of open green areas, an influx of high tech jobs (Welcome New Apple Campus!) and no state income tax, it is easy to see why people are flocking to our fair city.  Additionally, Austin's potential for price growth is one of the best in the nation  - and the median list price of $229,500 is about 12 percent higher than just one year ago. 

With all this attention, many investors are taking this opportunity to cash out.  Unfortunately, I'm seeing a lot of sellers making the…

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One of the aspects of Austin living that I am most proud of is the community's focus on green living.  The Mueller project is the perfect example.  Originally conceived of in 1984 as an attempt to increase the sustainability of urban living, it has taken almost thirty years for the dream to come to fruition.  Now green living is red hot and the East Side of 35 is a target for smart investors.  A mixed living development that boasts 1 tree for every 4 parking spots, encourages walking - not driving, built to increase water and energy efficiency and revels in the preservation of green spaces - only a stones throw from downtown?  What's not to love? 

A rising tide lifts all boats and the influx of technology, business and residents in the Mueller area has…

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At his annual economic forecast event held on Thursday February 23 at the Austin Convention Center, Angelos Angelou pointed to a number of really positive indicators for Austin in the coming months. In fact, he used the phrase "fantastic news," which is just exactly what real estate investors want to hear. For instance:

●      Job growth at the rate of 19,000 new positions this year and at least 20,000 in 2013. Why does that look so good? We only picked up 13,000 last year. In fact, we've gained back all the jobs that were lost during the recession and Angelou thinks the local unemployment rate, which is roughly 6 percent right now is headed below 5 percent. Granted, these are not likely to be high-paying jobs, but employment puts purchasing power in…

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Let's talk about taxes. Okay. Let's talk about one tax. The new 3.8% tax on some investment income that will take effect on January 1, 2013. First, let's cut straight to the myth. This tax WILL NOT apply to all real estate transactions. In fact, it's not just a real estate tax, it's a capital gains tax on some investment income.

Who will pay the tax?

- Individuals with an adjusted gross income of more than $200,000.

- Couples who file a joint return with an adjusted gross income of more than $250,000.

What will be taxed? SOME, but NOT all:

- interest

- dividend

- rents (less expenses)

- capital gains (less capital losses.)

And where the heck did this tax originate? That part is interesting, and it's the aspect of the new tax…

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Cap rate, cap rate, cap rate. There is so much focus on cap rates that investors are missing solid opportunities for no other reason than that they aren't familiar with Austin. Let's just put it in plain and simple language. If you are looking for a high cap rate, you are NOT going to be satisfied with the location of the property or the tenant base. Write that down on a sticky note and put it somewhere so that you have to keep reading it.

A mediocre market is a stagnant market with low appreciation. Demand drives appreciation. Stagnant markets have no demand. There is no real reason for the rents to increase except to meet the cost of operation or to adjust for inflation.

The only properties I recommend and personally buy, have to meet that "good…

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Last week we discussed handling your own apprehensions in risk management by seeking the help of a knowledgeable real estate investment professional, and essentially serving an apprenticeship. It's an invaluable model to both learn a new "trade," and to have a wise counselor at the same time. No investment pro worth his salt will tell you he can make risk go away, but he will show you viable techniques to minimize risk.

I like to tell new investors that all investment is a process. If you work the process, you're immediately hedging your risks. This starts with doing your own math. Check out the numbers you're being given. When people start claiming really high rates of return, which you're going to run into right and left, some new investors can't see…

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"Real estate investing is risky." Don't you love it when someone says something that obvious? Of course, what is considerably less obvious is how you manage that, both in terms of the practical business and financial considerations, and your own psychological tolerance for the process. Truthfully? The best way to get "used" to the risk is with help.

Apprenticeship used to be a standard model for learning a new trade. You want to learn to be a silversmith? You go find a silversmith. You want to learn how to invest in real estate and not get eaten alive on your first deal? You go find yourself a seasoned realtor who specializes in investment properties. Not all agents are the same, and it's important to realize that those who deal in investment…

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Let’s take a look at a great key indicator of how real, actual market data shows that the duplex market in particular had clearly turned the corner by the end of 2010.

 

“Probability of Selling” (POS). The probability of selling is arrived at by comparing how many duplexes were actually listed, sold and closed versus how many in total were originally listed for sale (whether they were sold, withdrawn, or expired.)

 

OVERVIEW

3rd Quarter - 2010

3rd Quarter - 2011

% Change Over Prior Year

SOLD Units

46

76

65.22%

WD & Exp

58

31

-46.55%

Probability of Selling

44.23%

71.03%

60.59%

…

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