Investing FAQs
The Austin Real Estate Investors Association helps local Austin real estate investors get the tools and advice they need to maximize their return on investment and avoid investing errors. If you are new to Austin real estate investing, we hope you find our Frequently Asked Questions page helpful. Of course the best place to get info is at our live, in-person meetings which happen regularly – sign up here!
Residential real estate or Commercial real estate?
Many of our members are residential investors but we also have a large group of commercial investors and developers. We are “Asset Class Agnostic” meaning if the deal makes money we want in. Most people start with residential and then grow to commercial. At the REIA we have education, training and mentoring on both asset classes.
Who can I go to for questions?
We answer your questions at our live REIA events and our weekend training classes. That allows us to run our own investing business while still helping others as they are getting started.
Where do I get started?
Most investors start by attending a local REIA meeting to get the education they need to start their business and the vendors they need so they are not trying to do everything and figure it out on their own. We also give you a customized blueprint at www.TexasStarterKit.com which is a perfect way to figure out the exactly what to do next.
How Do I Become a Real Estate Investor in Austin?
What Is the Difference Between a Real Estate Agent and a Real Estate Investor?
The biggest difference between real estate agents and real estate investors is that real estate agents earn commissions by working FOR their clients. However, real estate investors profit directly from the purchase and then resale (or wholesale) of property by buying (taking title to that property), fixing it and reselling it – as one strategy.
Real estate investors have many options. They could make money by selling houses for a profit, cultivating a steady stream of rental income, or applying the many possible value-add strategies. We use 12 different strategies to buy and sell houses. These are strategies we’ve built up from over 20 years of investing that are tried and true and allow you to make money every time the phone rings.
Do You Need a License to Become a Real Estate Investor in San Antonio?
You do not have to be a licensed realtor before investing in real estate.
Can I Become a Real Estate Investor with Little or No Money?
Cash is always helpful for real estate investors. However, there are ways for San Antonio real estate investors to make money even when starting small.
Buying properties subject-to (sub-to) is our favorite way to “make a dollar holler”. Using this strategy you can take over payment on someone else’s mortgage. Think of it as a form of owner financing. The details can get complicated but we’ve been using this strategy for over 20 years to buy fix and flips, rentals and more.
If you have a good deal, you can also get money from a private or hard money lender. We have several of those as part of the REIA. Some finance the purchase only but other finance the purchase and the renovation.
Alternatively, a lot of new investors with little or no money start by either wholesaling or partnering with experienced investors.
Lots of options here, but the key is to focus on the deal. If you have a good deal and a good network, the money will follow.
What is owner financing?
Owner financing means having the seller lend you money instead of borrowing from the bank. This option can reduce costs and help you buy a home even if you don’t have a great credit score. A form of owner financing can be subject-to (sub-to) or a wrap-around mortgage. We teach this strategy in detail at our meetings
What is real estate wholesaling?
In real estate wholesaling, the wholesaler signs a contract to buy the house at a particular price. The wholesaler then sells the contract to another investor at a higher price and keeps the difference. Wholesaling in Texas has gotten more complex over the years. You have to be careful in terms of how you describe what you are doing. For example, never say you are selling or wholesaling the property. Instead say you are selling your contract or to be more exact, you are selling your “equitable interest in a property”.
It’s nuanced, but that 2 millimeter shift will keep you out of a lot of trouble with the Texas Real Estate Commission. They fine non-licensed investors who are selling property all the time.
To keep the transaction legal, you’ll need to disclose the nature of the transaction up front to both the seller and the end buyer. The disclosure must be in writing and signed by all parties.
Wholesaling is simple, but not easy. At the REIA, we’ll teach you how to do it without getting into trouble.
Is wholesaling real estate legal in Texas?
Wholesaling is legal in Texas as long as you follow the rules and do not misrepresent the contract terms. Make sure you understand the process before signing any wholesale real estate contract. To keep the transaction legal, you’ll need to disclose the nature of the transaction up front to both the seller and the end buyer. The disclosure must be in writing and signed by all parties.
Wholesaling is simple, but not easy. The REIA teaches the right way to wholesale in Texas.
Do I Need a Real Estate License to Flip Houses in Austin?
No. You don’t need a license to flip houses anywhere in Texas. However, some of the renovations you’ll complete will typically require permits and inspections and many of the work will need to be completed by licensed tradespeople.
What Is a “Subject To” Real Estate Transaction?
A “subject to” or sub-to real estate sale is a good option for any purchase of real estate.
If a seller agrees to a “subject to” sale, they will give the title to the buyer. However, they will keep the mortgage in their name on the understanding that the buyer will make the future payments on the mortgage after purchasing the home. Most attorney’s will recommend a Wrap-around mortgage to complete the paperwork property.
Buying sub-to It allows you to keep your powder dry – ie keep money in your pocket as a real estate investor. In many instances the interest rate on a sub-to deal is lower than the interest rate that a private or hard money lender may give you.
At the REIA trainings we explain the do’s and don’ts of buying sub-to in Texas.
Are “Subject To” Deals Legal in Austin, Texas?
Laws do not prevent subject-to sales in Texas. Mortgage companies typically will not object as long as you pay the mortgage on time. However, most mortgages have what’s called a due on sale clause that gives mortgage companies the right to foreclose on the property if the property is sold and the underlying loan is not paid off. As scary as that sounds, it is a rare occurrence and there are also some sophisticated work arounds that will stop the bank from foreclosing and give you time to pay off the note, refinance the property or resell the property.
Where Can I Go to Learn to Become a Real Estate Investor in Austin?
Do you offer real estate coaching or mentoring?
Club Disclaimer: Your personal level of success in attaining the results from using our information and strategies discussed at our events totally depends upon your own individual circumstances, the effort you devote to your own financial success, the ideas and techniques used, your finances, the various strategies that your financial, legal, and other advisors may have suggested that you implement, your knowledge, and various other skills. Since these factors differ among each individual, we cannot guarantee your success or income level, nor are we responsible for any of your actions.
Code of Conduct Policy: While Networking with others at the Club is encouraged, we strongly recommend you perform your due diligence prior to entering into any real estate agreement. For more information, please refer to our Club Members Code of Conduct Policy
