Buying in Fla - Posted by Rick Hall

Posted by RichV(FL) on February 11, 2009 at 06:38:18:

JT, Sorry about that. :slight_smile:

Its funny…this winter we are seeing more and more people “looking” and some buying properties down here. I’m sure its a combo of low prices and cold weather up north.

Buying in Fla - Posted by Rick Hall

Posted by Rick Hall on February 07, 2009 at 22:34:13:

I am a fulltime RE investor in NW PA, and after the 12 feet of snow we’ve had for last 3 months, I have decided that I want to buy something in FL. I am guessing that the market it low enough where it would be a good time to buy. I would use it as a vacation home, and have family here that would also love to “borrow” it at times. I have been looking at online auctions and zillow and trulia, and have so far seem to be drawn to Cape Coral for some reason (probably the fact that I see houses that sold for 200K+ being offered for 50-70k now!, also I love boating and the canals throughout the town would be great to have in your backyard!) I have a crew here that can handle a pretty substantial rehab if necessary, and would love an expenses paid work-vacation to Fla for a few weeks.
I would like to spend 40-50k for a property and maybe put another 20K into it. If the market hasn’t bottomed, oh well as long as I can have somewhere to get away from snow for awhile! The market has to rebound someday! I have enough property in my market that has next to no appreciation, but cashflows like crazy, so my tenants here will be paying for it anyways. I also would like to diversify to the point of having a property (maybe more) in an area that should actually go up in value, vs. my property here, that I know won’t.

Anyways, just wondering if you could help with some advise, and/or contacts that might be able to help. I am planning on making a trip there in a month or so after a bit more due-diligence, and would like to know who and what I should be looking at when I get there!

I would appreciate any advise and/or contacts that anyone may have that I could use for some research!

Thanks in advance everyone,
Rick Hall

I friend went to Capr Coral looking to buy… - Posted by David Krulac

Posted by David Krulac on February 09, 2009 at 05:22:37:

about a month ago. He reported that houses previously sold for $240,000 were selling for $80,000. He is a sophistictaed long time invetsor and he ended up buying nothing after being there a week. He said that there were blocks of house with 4 out of 10 houses for sale. There were many empty houses. There may be a pool of renters, but he felt that if you rented a house for $900, that there is such a glut on the market that somebody down the street might rent for $800 and steal your tenants, that the market was so despreate and cut-throat.

There other points were:

  1. is $80,000 the bottom or are house going down further?

  2. Insurance costs can be extremely high in areas susceptable to hurricanes and flooding. One place he looked at the insurance was over $11,000 a year.

Be Careful, there may be lots of snow off Lake Erie but the market is stable and not volatile like FL.

Re: Buying in Fla - Posted by thutch fl

Posted by thutch fl on February 08, 2009 at 18:08:52:

If you are not stuck on Cape Coral, which I agree has very little room for appreciation for a long, I would look at Palm Coast. Very near the beach and has been decimated. You can definitely do short term rentals there for some of the winter with greater ease than Cape Cora.

As far as Palm Coast it is right in between Orland, CFRI.net and Jacksonville, Jaxreia.com.

I truely believe it is a better long term hold.

Re: Buying in Fla - Posted by Celeste-fl

Posted by Celeste-fl on February 08, 2009 at 04:38:23:

Hi rick, I invest in the tampa bay area and have friends in the Cape Coral area. It is a nice area, but was hit real hard by the credit crunch and is very seasonal. It is dead in the summer with lots of retired folks in the winter. Like your area, I don,t see much room for any appreciation for a long time in Cape Coral.It will cashflow, but renters are harder to find with rentals everywhere and landlords begging for anyone with a pulse.

Re: I friend went to Capr Coral looking to buy… - Posted by Rick Hall

Posted by Rick Hall on February 09, 2009 at 19:38:20:

Thanks for the insight David, I have always enjoyed your posts, you really know your stuff, and are always more than willing to help, If you don’t hear it enough, you are a truly great asset to this board!

I have definitely included the insurance issue in my due-diligence, as well as the high taxes that come on some of these houses. I’m not sure about being re-assessed for a lower purch price if someone paid 250k in 05, and now I pay 60k and try to get my taxes lowered by 3/4. I’m sure the taxing bodies have issues with that.

This is really more of a speculative investment for me, but mostly a “toy” more than an investment. I have always wanted a vacation home somewhere warm, just now my finances, and the market there match up!

I definitely plan on keeping my main residence here, I already have too many properties making too much money to bail on my hometown now! I like the stability of the market (at least I do now when everywhere else seems to be going down, didn’t so much when everyone was making a killing and my properties were stagnant as far as any appreciation goes) but I now realize how good I have it here with the great cashflow that seems to be as good as, if not better than almost anywhere in the country!

If this isn’t the bottom, and I buy now, I won’t kick myself too hard, as I’m pretty sure if I find a market in FL with good fundamentals, it will go back up again, higher than what I paid at least. Better to buy low, even of not at bottom, that to not buy at all! (well unless they go lower and never go back up, but I really don’t see that happening).

I plan on buying a couple more properties here and let that cashflow pay for the property there, so I’m not so worried about the rental market there, maybe a few 2 week rentals to some vacationers to help offset the costs would be nice, but not necessary, I even have a lot of friends here that would be more than happy to give me a few hundred bucks to borrow the keys for a week, and take their family on a cheap vacation to somewhere sunny and warm. (cheap vacations go over real well in this economy right!)

Again David, thanks for the input, I am leaning toward some other areas in FL than Cape coral, due to mainly what I have heard here, I would like to make my best educated investment even if it only a “toy” property.

Rick Hall

Re: Buying in Fla - Posted by Eric in FL

Posted by Eric in FL on February 09, 2009 at 04:58:40:

Be very careful with Palm Coast at this point. I believe it has another 20% - 30% to go down. It is a very similar situation to Cape Coral about 1 year ago. The amount of LP’s and homes in the process of a short sale is about 65% of all listings. Simple economics tells you what is going to happen there. Homes that sold for 225k in the peak are on the market for 125k and not moving at all. So, you can see when communities like Port St. Lucie and Cape Coral are half that price there is a whole lot more to go (very similar demographics). I personally would look at Port St. Lucie due to the pharmaceutical industry moving in over the next 5 - 10 years. Prices are dirt cheap, great weather, and still a ton of foreclosed inventory. Good luck.

Best Regards,
Eric

Re: Buying in Fla - Posted by Rick Hall

Posted by Rick Hall on February 08, 2009 at 19:11:49:

Thanks Thutch, I appreciate the advise. I am really just looking for the best area to buy that would be a nice vacation home for myself, and would be warmer than 2 degrees during these months! Somewhere that the market has crushed prices, forclosures are high, and should rebound within the next 10 years or so. I have been looking at some forclosure auction sites (bought a 60k house here for 18k, that needed only 4k in work,just finished rehabbing that one, so that got me very interested in forclosure auction idea) and found quite a few homes going up for auction in Cape Coral, thats why I have been researching there. I will definitely take a look at Palm Coast area. I had heard that the East coast was a lot more expensive than the West, and the market was stronger there, so I have been thinking that the East coast would be the best to find a killer deal.

Again, I really appreciate the help, and if you have any contacts I could call in the area, please send them my way.

I promise to reciprocate all the goodwill to anyone who asks about buying in my area! Anyone interested in 16-18% cap rates? I get them all day long in good neighborhoods on 2-4 units!

Rick Hall

Tampa, FL - Posted by Rick Hall

Posted by Rick Hall on February 08, 2009 at 12:46:05:

Thanks Celeste, the Tampa area was actually my first choice, I have a cousin who lives there, and last I know owned 4 or 5 houses there that they rented out, I am waiting for her to call me, but I haven’t spoken to her in about 3 years (time flies, forget to stay in contact with family I guess!)

My main goal is to find something within 30 minutes of the coast, that I could buy for a song, rehab, and sit on until the market comes back. It would be nice to have a house that cold be offered as a vacation home, maybe rent out for 2 weeks or a month at a time to vacationers, just to help offfset the taxes and insurance. I wouldn’t want to rent it year-round, because I don’t want to take my family down to stay with tenants!

I am looking for a good area, that has been hit hard and had its values dropped substantially, then find a deal at 40% FMV or so that could be rehabbed and spend 65% FMV total into the project. Basically, just like most RE investors, I want the crappiest house in a good neighborhood!

Is there a local REIA that I could attend one of the meetings while there? I figure that would be a good place to find what I want, since my experience here is that the best deals rarely come from realtors, or the MLS.

Please let me know if you are a member of a REIA there, and when your meetings are, I could schedule my trip around making sure I get to one of the meetings.

Thanks again,
Rick Hall

Re: I friend went to Capr Coral looking to buy… - Posted by js-Indianapolis

Posted by js-Indianapolis on February 16, 2009 at 15:31:41:

Good attitude! You’ll need to keep it if you’re going
to invest here. I moved from Indy to Treasure Island
(Tampa-St. Pete area) about 9 months ago. It’s a mess
down here.

I can tell you that when I called on rentals it went a
little like this:

Me: How much is the rent, and how long is the lease?

FL Landlords: What do you have, and how long do you
want to stay. Make me an offer. I’ll take whatever.
I’m not covering my mortgage with what I’m asking, but
what will you give? Please, just give me anything,
and get into my house…PLEASE!

There’s so much stock on the market that I had my
pick, and I picked a fine condo on the third story of
a Hotel/Condo for $900 a month. Normal rent is $3000
a month. I woke up looking at the Gulf of Mexico out
the back door, and the inter coastal waters out the
front. Nightly I’d watch tourists from all over the
world take pictures on “Sunset Beach” in front of the
always picturesque sunset.

Living in Paradise, utilities included, for $900 a
month. The constant Jimmy Buffet songs and kettle
drums were free as well.

hit me up at the email if you want to meet up down
here. I’ll show you around a bit. I’m just about to
get started down here.

Eric What About Sarasota - Posted by phil fernandez

Posted by phil fernandez on February 09, 2009 at 06:12:03:

What’s the market like there both for sales and rentals. Thanks. Phil.

Re: Buying in Fla - Posted by matx

Posted by matx on February 08, 2009 at 21:11:16:

We have a rental in PC (we don’t live in FL). The rental market is absolutely brutal there (we’ve had to cut the rent every time we’ve re-rented the last couple of yrs), but if you just do short-term rentals, it might work.

We recently re-rented ours and 30% of the callers said their landlords were being foreclosed on. When I screened one of the applicants, her landlord in NY said he was bailing out from FL–he built 6 duplexes in 04.

Actually, PC is 15-20 min. north of Daytona. The beach in PC is private (well-to-do folks live on the ocean side of 95) and the closest public beach is Flagler, which is much less crowded and quiet than Daytona.

I’m not familiar with S-T rentals, but for that you may have to buy on the east side of 95, closer to the water. Then I’m not sure if you’ll find the kind of price you’re looking for.

PC started as a retirement community and the retirees are still moving from the Northeast. We plan to hold on to our property until the price doubles!

Re: Tampa, FL - Posted by Wayne-NC

Posted by Wayne-NC on February 09, 2009 at 11:59:44:

Rick, just west of Tampa is Largo which is just East of the intercoastal. There are real nice areas off of Walshingham and Indian Rocks road. I’ve got two places there and both rent well on the vacation side and long term. The beach is 5 minutes over the bridge and is called Indian Rocks Beach. You can Google all you want but that is a lead for you. I like it there. St. Augustine is another for me. I spent 15 years in South Florida and you can have it now!

Thanks Celeste and Jack - Posted by Rick Hall

Posted by Rick Hall on February 08, 2009 at 19:26:46:

Thank you both for your help, I really appreciate it.
I promise to reciprocate the RE goodwill to anyone who asks about my area!
Anyone interested in 16-18% cap rates on 2-4 units in good neighborhoods? I get them all day here!

Re: Tampa, FL - Posted by Celeste-fl

Posted by Celeste-fl on February 08, 2009 at 16:14:23:

Sorry I quit going to them years ago. At the present time the best deals are coming from the bank owned on the MLS.

Re: Tampa, FL - Posted by Jack-E

Posted by Jack-E on February 08, 2009 at 15:13:24:

The best reia in the Tampa area is the Sun Coast Realestate Investors Association (SREIA) It meets on the first tuesday of each month. You can find it and plenty of others on the sidebar on this site.

Re: I friend went to Cape Coral looking to buy… - Posted by Rick Hall

Posted by Rick Hall on February 16, 2009 at 21:36:17:

I e-mailed you privately, I guessed at the address since you have that nospam stuff in what you used to post here. I am definitely interested in metting up, I could use any insight into the market that I can get.

If you don’t get my e-mail, send me one directly, I would like to discuss the market (I hope you have started your research already)!

Rick

Re: Eric What About Sarasota - Posted by Eric in FL

Posted by Eric in FL on February 09, 2009 at 08:22:22:

Phil,

I don’t have a handle on what the Sarasota market is doing right now but a friend of mine is buying. Again, it’s back to the glory days of buy and hold in certain areas. Some have not caught up or down I guess I should say. As I always have said, real estate is not a market but a case by case scenario, and I think you can make a deal any where, any time. When people talk about places like Cape Coral and Palm Coast I scratch my head because there are no jobs. The jobs were construction and they are all gone. Again, I think Port St. Lucie is intriguing.

Best Regards,
Eric

Re: Tampa, FL - Posted by Rick Hall

Posted by Rick Hall on February 09, 2009 at 19:52:49:

Wayne,

I can have it? Sweet! Thanks! Want to trade even-up for some properties I have here, it’s cold but they cashflow like crazy!

Seriously, thanks for the heads up, I will look into them also. I’d offer you the free beer when I head to Fl, like I offered Eric-FL, but you probably don’t want to drive from NC to FL for a 6-pack!.. but if you do, let me know!

Re: Thanks Celeste and Jack - Posted by Eric in FL

Posted by Eric in FL on February 09, 2009 at 05:00:58:

Rick,

I dropped you an e-mail but please elaborate or post a couple of deals. Any time I see 16 to 18 I start to tremble.

Thanks,
Eric