How I Bought a 1 Acre House in Central Austin in my 20s
By Jennifer Carey
The following article was written by one of our awesome Open House Austin agents, Jennifer Carey! To learn more about Jenn, click here. Enjoy this detailed story from an incredible and experienced agent and investor:
In May 2015, I moved into my boyfriend’s rental house in East Austin. We loved the location, but the house needed some updates. The landlord was not interested in doing repairs or willing to sell, so like many of my friends at the time, I decided it was a great time to buy my own home. The Austin market was going crazy, and we were tired of paying large rent amounts and 6–10% increases every year.
At the time, I was working with a friend who had recently become licensed in Real Estate and set me up on the right path of pre-approval so I knew how much home I could afford. Although my boyfriend and I were planning to live together in house and share expenses, he was self-employed with no credit, so it worked out better for me to be on the loan by myself. I was approved for about $275,000 but felt more comfortable with a $250,000 purchase price. Even in 2015, this limited our options with regards to location as we wanted to stay as central as possible (I was working downtown and hated a long commute).
After just a few weeks of searching, I found the perfect house (a 3 bedroom/2 bath with a large yard for our dogs in the neighborhood we already lived in)! I learned through this process that I am a bit more of a risk-taker than my boyfriend, so I was ready to put in an offer the day I saw it. He, however, wanted to take a few days to think about it. That was the end of that. The house sold the next day, and we were devastated. It’s an emotional and dramatic experience buying a home so I’m only slightly exaggerating!
I love this location!
Another week or two passed, and I found another diamond in the rough. This time we were in South East Austin, another up-and-coming area, near my boyfriend’s workshop. It was an older home that had not been updated as much but had beautiful kitchen cabinets and hand-scraped wood floors. What it also had was a lot of foundation issues (it felt like a funhouse when you walked in), but I was optimistic and figured we were getting a deal and could get the foundation fixed no problem. We submitted an offer, got approved, and had our inspection and foundation inspection. This is where things went downhill. Those foundation issues were worse than I thought - it was going to take over $20k and required the floors and cabinets to be removed. So we pulled out of that contract, but we did not lose our earnest money, just our option fee as we were still in our option period. It’s so important to know when to back away from a deal!
This location is still growing now! The house was withdrawn after we took back our offer and has not been back on the market since!
Now at this point we were about 2 months from our lease ending and had to give our landlord an answer if we were going to renew or not. Then one day sitting at my computer at work on my lunch break browsing through the latest list of homes to hit the market, I discovered our house. A 3 bedroom/1 bath home sitting on 1.33 acres of land located just north of the coveted Crestview neighborhood. It was already mostly remodeled and totally our style. And it was only 8 miles from my work/downtown and less than 5 miles from all of my boyfriend’s family (which we learned was important to us).
We ran to see the house that evening with our agent and put an offer in that night! We had no idea what we were going to do with all of that land, but we knew it was better to have it and not know how to use it than to not have it at all!
The property is located in a flood plain which can be a concern to many buyers, so we were able to negotiate the price a bit. We looked in to the cost of flood insurance and the value of the property more than outweighed the additional cost so we decided to move forward!
In addition, there is an easement running through the middle of the property BUT it is zoned SF3, so we plan to add an additional single-family dwelling on the property, as well as an ADU, and a tiny home/airstream trailer in the future. The great thing about having this much property is that our options are kind of unlimited.
We lived in the home for 4 years from Nov 2015 to Sep 2019 and did some additional remodeling (replaced all windows, changed bathroom vanity and lighting, added gutters, painted, and did some landscaping) and in Nov 2019 we rented it to our first tenant and moved to our next investment property, a family-owned home in Lockhart, TX.
Ok now here’s the fun part! Numbers!
Original Listing Price: $275,000
List Price at Time of Offer: $250,000
Negotiated Offer Price: $253,000
Days on Market: 34
Had 2 price drops in 10 days and had gone pending and just come back to market when we put our offer in!
We had an FHA loan and 3.5% down financing $244,145 of the loan at a 4.5% interest rate
Plans are to refinance at a lower interest rate in the next 12 months and remove PMI (private mortgage insurance)
Again, at the time it was only me on the loan with an income of about $60,000/year (averaged over two years, with highly taxed commission-based income, and a 3-month gap in employment when I moved back to Austin from Seattle)
For more info on the real #’s of this home purchase, mini-renovation, and how I am currently cash-flowing the property check out @openhouse_austin Instagram! Want to learn how to do what Jenn did? Click here to schedule a call!
