I receive regular inquiries from prospective investors about investing in real estate in Austin. At the outset I try to determine the objective of the investor by asking some questions. Usually it will be an open ended question like “Why do you want to own investment property in Austin TX?“.
Then I just listen.
It’s amazing how many prospective Austin real estate investors cannot articulate a coherent reason for their interest in investing in real estate. The responses vary from wholly uninformed dream seekers, kicking tires and “researching” on a whim (which is fine!), to incredibly informed wealth builders who really do know their numbers and what they hope to accomplish with a real estate investment over time.
It’s the latter we seek to help, though I like to think I’m always helpful and friendly to the ones with unreasonable hopes and expectations by discussing it a bit, or directing them to our Investing in Austin Real Estate page.
The most striking disagreement I have when talking to prospective investors comes about with the ones focused solely on “cash flow”. They want to buy a “property that cash flows at least a couple of hundred a month“.
I don’t personally care about cash flow, so I’m unsympathetic to this requirement. I’m not tuned in to it, because it’s not how I think about wealth building. Cash Flow is meaningless to me. Many are confused when I say this.
I just think it’s the wrong thing to focus on because that’s not what ultimately determines the success or failure of a real estate “buy and hold” investment, over time. I’ll explain further below with an actual real life example of a property I actually own.
What I do want from my real estate investment is that it produce a slow, steady, reliable increase in Net Worth over time. That’s it. I’m patient, as this is something that happens over decades, not a quick flip. Sylvia and I are “Buy and Hold” real estate investors, and that’s who we specialize in helping as well. We help people seeking wealth accumulation, not income. Read more …