Texas Realty Blog

Gotcha Guide™: Minimizing Risk in "Spec Builds"

NNOTE: This article is part of the forthcoming book, the Gotcha Guide™ to Buying or Investing in Real Estate. Email us to join the mailing list for the release date.
by DeeinAustin™ 

I am a moderator at REIClub.com, which is a great resource for both beginning and experienced investors. I came across a spec build scenario today that raised a red flag.

"Spec" builds are when you build a house with the intent to sell it as an investment. The builder, you and/or your agent will locate a piece of land, determine what to build and sell it before or shortly after the home is complete. Spec building is very risky, but can be a lucrative strategy.

In a post on REIClub.com, the investor was financing both the land and project using a construction loan. This is normally not an issue, but in this case, the builder was also asking to split profits after the sale.

“Flipping” Houses for Profit, Business District Hour Topic this Sunday

Real estate investing is a hot topic, so it's great news that it will be discussed during the Austin Business District Hour this Sunday, July 15 at 3 p.m. CST on 1370AM. Local and national listeners can stream the broadcast live at www.talk1370.com and can call in to ask questions at (512) 390-1370.

I encourage anyone interested in investing in Texas to call in! Austin Business District has been making waves on the local magazine scene. Another interesting tidbit is their new real estate portal, Real Estate Business District. The publishers of the site encouraging real estate businesses to submit their advice and tips for publication or contact them to form a partnership.

POTENTIAL QUESTIONS TO ASK THIS SUNDAY ON 1370AM (from 3-4pm)

• How can I get started in real estate investing? What are some resources?
• How's the Austin and Central Texas real estate market?
• How can I know if it is feasible in my area to "flip" houses for profit?
• What's the best way to finance properties?
• What about asset protection?

You can listen to previous podcasts from Austin Business District on their website.

Affordable Luxury, Modern Homes Hit Big in Texas

We'd previously discussed the influx of relocation buyers to Texas from California, Arizona, Florida and other hot markets that turned cool this year. While those markets are still struggling, Texas real estate is hotter than ever.

Affordability is one of Texas' main attractors, but some great strides have also been made in the areas of green and modern homes, urban condos and "affordable" luxury properties. Austin, Dallas, Houston and San Antonio have been thriving markets for some wonderful luxury home communities and modern architecture.

THE URBAN AND MODERN LUXURY MARKETS IN TEXAS

The typical target market for builders of urban condos or lofts and affordable luxury homes have been out-of-state or retiring buyers with high-end tastes, but smaller budgets. Characteristics of modern luxury homes in Texas have the following characteristics:

• More contemporary designs with clean lines and natural surfaces.
• Less "overdone" looks with more elegant appeal for the Baby Boomers and Generation X buyers.
• High-tech amenities with smart kitchens, outdoor living areas with flat panel televisions and indoor theaters. Green designs and energy-saving features are especially popular in Austin.
• More affordable prices. Builders have been offering the most sought-after features for less than you'd expect. Price ranges are typically from the $500s (in Houston and San Antonio) to the low millions.

Check out the modern luxury and urban scene for Texas in: LUXE Magazine - The Luxury Home Redefined, which serves Central Texas. Popular national magazines are Dwell and Metropolitan Homes.

SEARCH ALL HOMES In Greater Austin!

Austin Chamber Announces Award Nominees, Copeland Group Makes List

Ok. This is not a thinly-veiled attempt to brag about the Copeland Group's nomination for Customer Service in the Annual Greater Austin Chamber Awards. We are very honored and also recognize many names on the list as excellent companies to do business with.

Austin has many small or local companies who are doing great things, such as Austin Women Magazine, Runtex and Soup Peddler. Each year, over 1000 attendees pack the Greater Austin Chamber Awards in their sold-out event. This year, 150 businesses were nominated in areas of community relations, education, customer service, environment and innovation.

SOME SMALL BUSINESS NOMINEES YOU SHOULD KNOW

1. The Copeland Group at Keller Williams Realty! We specialize in investments, new construction and relocation/second home purchases. Of course, we also help non-investors buy and sell homes in Greater Austin. Customer Service is a great category for a nomination because it shows that we cherish our clients and provide exceptional service.
   
2. Rachel Johnston from Opertuneus virtual tours. Rachel won Ambassador of the Year at the Chamber and was featured here in a story about issues with virtual tour security.
3. Christie Gaderson of Priorities Concierge. Christie is extremely talented and professional. I've known her since I first started in the real estate business. Kudos to her.
4. Another Keller Williams group is Goldwasser Team. It's always good to have fellow Keller Williams agents show excellence in the business.
5. Buffington Mortgage. Buffington calls each week with a mortgage update and provide FREE one-hour sessions with CPAs, lawyers, construction supervisors and financial planners to all of their clients. They're a great group.
6. Ben Finklea, founder of Spydev, who does SEO and is working on a site for our team. Ben is now accepting new SEO clients from anywhere in Texas or the U.S. (hint, hint).

This year's Awards Banquet is on August 29, so you can reserve a seat for the best networking of the year. 

The Copeland Group at Keller Williams Realty is proud to be honored by our Greater Austin friends and colleagues. Read the Copeland Group Mission, Vision, Values and Beliefs and our tips for new real estate agents.

Also read our previous article about Rachel Johnston and home security in virtual tours.

See the full list of nominees: 150 Businesses Nominated for an Austin Business Award.

'Flip This House' Wants YOU

I received an email from Steve Grant, Casting Director for Flip This House on A&E. They're actively looking for next season's cast for their hit reality series and are offering a $500 finder's fee.

As a reminder, Flip This House is not the same show as Flip That House. 'This House' follows two investors from two cities the entire season. Last year, they had groups from San Antonio and Atlanta. 'That House' airs 15-minute segments from different investors each show.

Now that we've cleared that up, if you like the sound of flipping through 500 one-dollar bills, send the casting director the contact information for your lead. If you think you have what it takes, shoot us an email and I'll forward the application. I think you can also visit the 813 Casting website.

Northwest Austin Builder Maravilla Filed Bankruptcy?

I received a blog comment that asked if there was a follow-up on the Maravilla Homes debacle. Maravilla was a heavily-advertised luxury home community development in Northwest Austin. We'd first learned of the problems at the subdivision on the radio. After some digging, we also found a KVUE news story that confirmed our suspicions of Maravilla builders going under.

I need time to verify this, but according to a recent comment on this blog about the story:

"...this guy stuck everyone with his bills; embezzled about 1/2 million; and is now declaring bankruptcy. he built w/o permits; and had his lawyer lie to homeowners."

There hasn't been much reported since the story broke earlier this Spring. Unfortunately, builders can go out of business before, during and after a subdivision development. I feel very sorry for the home owners and investors who have to endure this pain. Once the builder or developer files bankruptcy, financial restitution will be limited.

Read the full previous post on the financial troubles of the Maravilla development.

See the KVUE News Story on YouTube...

Visit the Maravilla Consumer Issues Blog: Living The Dream.

Austin Board Announces 'ListHub' Internet Listing Tool

Here's some exciting news! Well, maybe not, but it's interesting to me and I'll tell you why in a few moments.

The Austin Board of REALTORS® (ABOR) recently announced a new marketing tool for listings. Increasingly, there are more places to market and find properties for sale via the internet. Although  I don't think ListHub is mind-blowing, the fact that ABOR is finally providing us with tools to market our listings elsewhere is a step in the right direction. <<---Reason this is interesting!

Per ABOR, "ListHub allows brokers to take control of their internet marketing by sending their office’s listing inventory to real estate search websites, like Google, Trulia, Vast, and many more. When ListHub posts your listing, the branding and links will all refer back to the broker. Brokers also get click traffic reports to see the results of their marketing efforts. Since ListHub is integrated with Tempo, there is NO data entry required."

"ListHub allows you to send listings to your first destination – Google base – for FREE!  Just go to ListHub and create your account in minutes.  Within 72 hours, your listings will be searchable on Google". 

I may give ListHub a call because I use several tools that already post on these sites. VFlyer and the Keller Williams Listing System (KWLS) are examples. My question is whether Google and others will recognize duplicates. Otherwise, it will be pretty annoying to see the same property listed 2-3 times on each search site.

Read more news from ABoR.com. See our previous post on real estate Web 2.0.

Austin Listings this Week

Here are just a few Austin listings... both on and off-market!

'Unforeseen' Movie Tracks Controversial Development in Austin

PBS ran a story on 'The Unforeseen", a documentary by Laura Dunn about an embattled development near Barton Creek in Austin, Texas. The documentary is a film that tries to walk the line of remaining truthful and honest while opening a unique discussion regarding Austin real estate development.

Laura thought it was important to avoid painting one side as the "hero" versus the "villain". Although George W. Bush supported the developer of Barton Springs, she wanted to stay bipartisan in per depiction of the involved parties.

I wanted to take note of The Unforeseen because it seems wonderfully done and can help both current and future residents or developers understand our city and culture. Laura Dunn understood that Austin is a place where developers see the city as a place to be build lucrative projects while residents view Barton Springs and Austin as unique oasis' in an urban setting where friends, families and neighbors can grow together.

See the City of Austin website on Barton Springs.

Watch the movie now: The Unforeseen and read more about Austin's accolades.

We're back Thursday!

Happy Fourth of July!

We're traveling and will be back after the holiday!

Visit us online anytime at CopelandGroupRealty.com and search all Greater Austin homes AustinMLSonline.com! Call the team 24/7 toll FREE at (888)-346-6389!