Tag Archives: austin

case study on 4800 Spring Meadow Cove, Austin TX 78744

A case study on 4800 Spring Meadow Cove, Austin TX 78744

                        The Spring Meadow Cove property was purchased on April 22, 2003 from HUD for $54,603.   The property was built in 1984.   The house was a 3 bedroom, 2 bathroom, 2 living areas, a dining area, and a 2 car garage.   The house was immediately rehabbed and listed for sale at $115,000.   It was sold for sale for $116,000.   The repairs were complete by Remar Ministries.   It required approximately $7,500 in repairs.   The list of repairs included:  

  Drywall repair, Paint entire interior of house, Carpet, Rebuilding the kitchen countertops, rebuilding the master bathroom tub surround, new window screens, new ceiling fans, new garage door, new door knobs, and new rain gutters.

 The repairs took approximately 2.5 weeks to complete.   The tax appraisal on the home before the repairs was approximately $94,748.   The after repair value per the appraisal dated April 19, 2003 was $113,000.   The initial loan to value, based upon the appraisal value, was 56% (65K/113K).   Below is a financial break down of the transaction.   There were $2,612 in closing costs associated with the purchase of this property.   Also there were holding costs of $975 per month for 5 months.   The  house was purchased using a “hard money” loan.   The interest rate was 18% the total amount borrowed was $65,000


.The Maximum purchase price was determined by using the formula previously outlined   The contingency factor should be added to the profit for this transaction because it is for emergencies or unforeseen repairs.  


            $Maximum Retail Value $                     $115,000

            (subtract the following) 


            – Purchase Costs                      -$1,000

            – Rehab Costs                          -$7,500

            – Holding Costs                        -$5,000

            – Sales Costs                            -$6,500

            – Contingency Factor                -$5,000

            – Profit                                     -$35,000

            $Maximum Purchase Price   =  $55,000



If the house was going to be held as a rental then it would need to be refinanced.   If an 80% loan to value loan was used after closing costs and escrows TSG would have received a check for approximately $20,000 after paying off the hard money loan and closing costs.   This property would probably be held for 5 – 7 years and then sold.   If the market appreciates 3% – 5% per year (very reasonable appreciation rates) then this property will be worth between 132,000 to 144,000.


If this house were put on the Fast Sell Strategy track instead of the Rehab Strategy track it could have been sold to a rehab investor for $5,000 to $10,000 and the rehab investor would have used a similar formula to determine their profit potential.


Pictures before repairs:















 Pictures after the repairs





 We sold the house for 115K to an owner occupant with a 1st and a 2nd to us for 20K.   They ended up losing the house in foreclosure on the 1st and my 20K second was wiped out!   ((That SUCKS)).   We made good profit and learned a good lesson about taking a 2nd behind an institutional 1st.   Don't do it unless the profit that you get from the payoff of the 1st is good and you dont care about the 2nd.   We could have reinstated the 1st but after they were 3k behind then it was not worth our while any longer so we just passed on it and moved on to bigger and better deals.

This was the only deal (1st and last deal) that I ever used hard money on and it was a learning experience as well.   There was a tremendous lesson on who hard money really works in doing the transaction!    For those interested please send me an email and I will lay it out for you.

As an aside the agent who I had worked with to buy the house ended up buying the house from the bank and went out and did the same type of transaction as I did!  Funny how we even recycle houses in Austin!

Post your questions to the REICA board and I will answer some of them if any or send me a private email at Ron@theseaygroup.com.

7404 Arctic for Sale $95,000

7404 Arctic Ct, Austin TX 


Property description

 This property is a 3 bedroom 2 bathroom manufactured home with a 2 car detached garage.   It also has a fenced back yard.   It is in a subdivision of other manufactured homes and comes with the lot.   It is not a lot rental but the price includes the dirt.   It is 1792 square feet according to the Travis Country Appraisal District and has a carport.   It comes with the refrigerator, stove, dishwasher, garbage disposal.    This property is most ideal for a new investor or a family looking for their first home.

 There is a new middle school being built around the corner and it should be open in 2008.   The elementary school is not far away either.   The lot is one of the larger lots in the neighborhood.   There are several new subdivisions being built in the area and this should cause the value to go up as those new properties come online and pull the value of this property up.    

The area has been growing tremendously over the past few years.   Please click the following link for a demographics study.


Property History

 The property was purchased as a foreclosure by the current owner and has been a rental.   It has been kept in decent shape and is now ready to received the attention that it needs to make it a wonderful home.   Now the owners have bigger and better projects to work on and want to find the right person who can love this property the way that they used too.   In the past it has gotten people who have occupied it but never loved it the way it needs to be loved.

 If you are the right person and want to make a cash offer the owners are willing to consider taking a discount on the property in order for you to be able to make it work.   Just submit your cash offer and it can be considered!  


Repair Analysis

 Our back of the envelope analysis included:




















These figures are only estimates and you should hire a professional to fully investigate.

  Many of the figures are very rough and include paying professionals to do some if not all of the work.   It may be possible to get the numbers lower but you would need to investigate that possibility on your own.


Rental Analysis

If the property were purchased and repaired and turned into a rental my analysis indicates that the property would generate a 21% average annual cash on cash return and a 30% total return if held for 5 years and sold for $125K.   The rental rate that was used was on $950 per month.   For a Three bedroom two bath house that is cheap, but the property is a manufactured home and that has to be taken into consideration when factoring the rental amount.   If the sales price could be achieved before the 5 year term the return would rocket skyward!

To see the analysis please click for link for the Property Analysis.    This analysis was done for another property that is very close to this one and very similar in size and layout.


Flip Analysis

If the property was flipped quickly without doing any repairs just remarketing the property the price could probably be bumped up by $10K for a total of $105K.   If the new seller owner financed the property for $10,000 down and payments of $1075 per month and a 10% interest rate then the return on investment would be $1,200/$1,000 = 120% per year!  

But for analysis purposes lets assume that the initial investment is $3K and then the underlying payment on the first note is $750.   The cash flow generated would be $100 per month or $1,200 per year.   The return on investment would equal $1,200/$3,000 = 40% return per year!

If the property was given a cleaning and trash removal then the flip price could easily be pushed upward as the property would appeal to a wider range of potential buyers.  


  If you have any questions about the property please email me from the Contact Us Page.

 Please join our linkedin Network at Linkedin.com www.linkedin.com/in/ronseay


Information Deemed Reliable but not guaranteed and should be verified by personal inspection or with the appropriate professionals.   Please read the Information about Brokerage Services.   The seller is a licensed agent with The Seay Group, LLC.

More Pictures of Arctic

view of kitchen from dining room ( has a refridgerator not shown in picture)

view of living room from entry

picture of main tub

view of dining room from kitchen

view of sink in main bathroom

view of walk in closet in master bedroom


view of master tub

view of shower and toilet in master bedroom

view of vanity in master bath

view of the landry room from the kitchen


below are some misc pictures and the first is a view of our Junior Executives conducting a property analysis.



Summary of Austin 3rd QTR multifamily market

Today Chris Stutzman at Transwestern recently sent me over a copy of their Austin Apartment Report for the 3rd Quarter.

Here are some of the key points:

  • Rents grew 4.8% during the past 12 months
  • Occupancy remains strong for the quarter Absorption outpaces supply again
  • Development pipeline grows – 48 projects totaling 12,560 units under construction
  • The market’s current unemployment figure stands at 5.3%

Continue reading Summary of Austin 3rd QTR multifamily market

New Data available from Texas A&M real estate center

The real estate center at Texas A&M has just updated thier market data for the entire state of texas.   If you need data to back up your investment decisions here is the place to go.


If you dont want to have the vultures sitting on your investment do your home work 1st

Vultures on your Investment

Texas apartment data

Occupancy 93.3%!!!

November was 93.1%

I am full in austin meaning 100% occupancy.   Now I need to get full and paying but being full is a good start.  Check out the write up from ALNsystems.com about the Austin, San Antonio, Dallas, Houston, and Fort Worth markets.   I attached them as a PDF to this post.aln apartment data 1-11-11

Offer on a foreclosure in Austin

This week I made an offer on a foreclosed property this week.  It was listed for 69K but I only wanted to offer 45 to 50K.  Why such a low offer on an already reduced priced house?    The house originally had a loan on it for over 133K and I only wanted to offer 45 to 50K b/c of the foundation issues that will require a foundation repair and will forever impair the salability of the house.   In addition the plumbing will most likely require some repair if not today sometime in the near future b/c of the foundation work that is needed.    Can this house be financed today?    Continue reading Offer on a foreclosure in Austin

Home starts down mean?? Increase in rents!!

an article in the austin business journal outlined the current state of new construction in Austin.   You can find it by clicking the link below

Austin home starts down 26% in 4Q
2011-01-04 12:40 PM CST

Click here to read this article

For the existing housing stock this is good news as it means that builders are not adding to our existing inventory of homes and that as demand continues to build and as those living at home and doubling up move less and less inventory will be available for them to chose from.    Continue reading Home starts down mean?? Increase in rents!!