BiggerPockets

REO SW Florida Duplexes as Income Property

Tuesday, December 14

In the last 12 months, we have sold over 60 duplexes in Lee County.  Most SW Florida duplexes for sale and those sold are in Lehigh Acres, with a small amount in Cape Coral.  About 15 months ago, we are believed to be the first investors to go into the banks and purchase their portfolio of duplexes.  We did this for many reasons.  Victims of foreclosure, which were in the millions it seemed in SW FL were migrating to rentals in areas closer to the interstate, and putting themselves in a more central location to 3 big industry centers, Ft. Myers, Naples, Estero/Bonita. 

 Once rental rates stabilized, duplex inventory shrunk as investors are looking for insane cash flow.  During our webinars, I preach going back to the old-school fundamentals of investing in real estate.  Long gone are the days when we should use speculation as the leading reason to buy.  If you can generate good cash flow and put yourself in a "positive potential" housing micro market, your cash flow will make you rich and the future long term value gains will be gravy.

Duplexes are being purchased for $75k to $80k.  The duplexes we advise as favorable are the ones built 2006 or newer.  

So for an $80k purchase price, here are numbers, exact from our most recent transaction:

Gross Rental Income:  $15,000 ($625 per side is market rates and the usual minimum)

Annual Operating Expenses

Property Taxes:      $1,600

Insurance:              $1,000

Prop. Mgmt @ 8%    $1,200

Vacancy @ 5%         $750 

Total Expenses        $4,550

Net Operating Income:     $10,450

Capitalization Rate:     13%

So as you can see, an $80,000 purchase price can yield over $10,000 in annual cash flow.  The ROI is very strong and you are putting yourself into a property that is in an area that is close to everyday needs, including jobs.

If you would like more information on how to invest in SW Florida multi-family homes, please get in touch and we will share our inventory list and proformas with you.  We purchase bank direct and our prices are well below market value.  

CLICK HERE to watch a walk thru of one of our duplexes, in the condition we buy them in and explanations as to what we fix to sell.

NYC Metro Condos UP 2% M/O/M

Friday, December 03

In the most recent report of the S&P / Case-Shiller Index, it shows that only 2 metro areas in the country showed gains.  Washington D.C area homes and New York area condos. New York area condos values rose almost 2% month over month. Values are rising at a speed last witnessed in late 2005.  New York area condos values stand 12% below the 2006 peak, however seemed to have leveled off.

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Here is how the other major metro areas fared:  This is based off the S&P/Case-Schiller Home price Indices that have been calculated monthly using a three month moving average and published with a 2 month lag.

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To continue reading about NY Metro condo market, follow this link to our website.

Tampa FL Income Producing Homes @ 15% Cap Rates.

Wednesday, November 24

Tampa, FL real estate has been red hot for us lately.  We have been able to buy REO/Bank Owned homes at pennies on the dollar.  Our system for real estate investors is simple.  To obtain the best purchase price, we typically take down about 5 homes at a time from the banks portfolio.  Prior to our firm closing, we fully inspect the home and budget for any repairs needed.  Once rehab begins, an investor may contract for the home to purchase.  In about 90% of our homes, by the time the investor closes, there is already a tenant in place with a 1 year lease through our preferred Property Management Company.

Capitalization Rates are running right around 15% for single family homes.  Tampa is one of the economic drivers for the state of Florida and has been getting a lot of attention from domestic and international investors.

If you would like to see a flyer of one of our recent Tampa homes, CLICK HERE.  The flyer will show you all gross income, NOI, expenses, pictures, etc.  So please be sure to preview it.

Rental Rates have been suggested and confirmed with third party property management firms.  References of Property Managers given upon request. 

 

NJ Transit Hoboken Development Plan

Saturday, September 25

It was only a couple years ago that New Jersey Transit proposed a redevelopment project for the Hoboken Terminal and rail yards which included residential buildings as tall as 45 strories along with a 70 story commercial tower.  This project would definately change the landscape of Hoboken real estate.

Hoboken Mayor Dawn Zimmer insisted that the plan was totally out of whack and threatened to change the character of Hoboken.  Sure, Hoboken has a bunch of unique character, but wouldn’t luxury buildings be nicer to look at than the rail yards?  I asked a Hoboken condo owner at Jefferson and Newark and she said that the view from her unit would be skewed.  The view into Manhattan would diminish drastically.  What would that do for her value?  It’s not like you get crazy unobstructive Manhattan views from this building, but they are still there, and looking at the current terminal is part of the character that exists.

“It is important for the City of Hoboken to have authority over the planning process to ensure balanced development for our community,” added Mayor Zimmer.

In order to ensure an independent design process, Mayor Zimmer is recommending that the City of Hoboken pay for the planning process itself so that the planner is clearly dedicated to Hoboken’s best interests.

“We must have balanced development that reflects the vision of our community, so my Administration is facilitating a public meeting for NJ Transit to present their plans to Hoboken residents,” said Mayor Dawn Zimmer. “I hope the public will join me for this meeting, where I look forward to learning about NJ Transit’s proposal at the same time as everyone else.”

NJ Transit has led Zimmer to believe that there is a prospective tenant that is interested in commercial space for their personal offices.  The prospective tenant is currently in the region and is looking to relocate.  According to NJ Transit, if the tenant were to relocate, they would bring 1,500 commercial office workers.

The community meeting is scheduled for Monday, September 27th from 7pm to 9pm at the Waiting Room in the Hoboken Terminal.  Are you going to be one of the attendees with Mayor Zimmer?

What are your thoughts on the new proposed plan?  Do you think it would create a negative aura around Hoboken’s urban feel?

Hoboken Real Estate

Saturday, June 20

So as we monitor the markets in New Jersey, I wanted to get into the Hoboken real estate topics for a second.  Hoboken is a unique city and ranked #1 by CNN as the best place to live (as a bachelor).  Local residence typically are entrepreneurs, brokers, or other business professionals. 

Hoboken's real estate market is dominated by brownstones, and condo/apartment buildings.  Rents are typically higher than average and Hoboken condos for sale range from $350-$500 per square foot.  Although the national housing market has plunged, Hoboken remained stable until mid 2008.  An increase in property taxes on top of rising unemployment has hurt the market and homes what was once a huge seller's market has turned into a huge buyer's market.

Deutsche Bank predicts that New York City metro markets, which includes Hoboken is set to drop another 40% in value.  While I disagree with that statement, I do not believe that Hoboken is at bottom yet.  Rents have come down and so have purchase prices.

There are great deals out there and a good negotiating broker can truely get you a great deal.  Hoboken is a 1 mile city that has a huge nightlife and entertainment appeal.  Additionally you can be in New York CIty via public transportation in a matter of 7 minutes.  Take the PATH train for $2.50 or take a bus for about the same.  I enjoy spending sunny Saturday's going to Yankee Stadium which is 25 minutes away or Central Park.  If not that, I stay right in Hoboken and enjoy the natural amenities of being on the Hudson River waterfront.

Hoboken is awesome.  If you like the burbs, they are only minutes away also. 

Intro to Real Estate Stinks

Tuesday, April 28

As many of you ponder why I, as a real estate professional write a post on my blog entitled "Real Estate Stinks", I will tell you why for half of you it immediately does (which is the focus) and the other half it immediately doesn't. 

Overall, real estate is an investment involving substantial benefits and substantial risks.  For most of you, during a real estate boom, it is very easy to get sucked into the hype of the buying frenzy by a fast talking realtor.  It is easy to follow everyone's lead.  For others, real estate involves great research and timing.  What we have learned recently is that no matter the type of investor, ANYONE can get hurt.  For instance, in SW Florida, if you bought real estate after the year 2000, chances are, you are in the whole right now....BIG TIME.  You could be Jane Doe or Donald Trump.  Nobody predicted what is happening now.

On that note, SW Florida has also offered amazing and unique opportunity for homebuyers and investors now, just like many parts of the world.  Real estate can literally be purchased for 20 cents on the dollar and sometimes less.  Guess who is capitalizing?  Yup, the cash buyers.  Kind of unfair to the middle class who relies on financing and leverage.  For 80% of SW Florida residents, real estate stinks.  If you have waited for a time like today and believe that homes are truely affordable at your budget, get in line for that house.  Chances are, investors are going to bid on it, outbidding your budget and immediately eliminating you from contention with a cash offer to the auction house and banks.  This goes for small time investors also looking forward to the American Dream of being financially free one day, looking at real estate as your saviour.  Chances are, you are getting beat by the rich.

Here is my solution, and some may not even like it.  Talk to people with cash or even hard money lenders.  Use their cash to acquire the properties, but only after you are prequalified for a loan.  It's a win-win situation.  When speaking to a person with cash capabilities, offer them 8-10% on their money for a quick flip.  In SW Florida, foreclosure homes are going at auctions for $50,000.  If you find your dream home coming up for auction, offer the cash guy $5,000 and a promise that you will buy the home back within 30 days.  He will likely ask for a hard deposit and that is fine if you think your loan prequalification is solid.  Instead of continual frustration, you get a house for your budget, while working in your own criteria for the purchase. 

We can help homeowners with this in the right circumstances.  My blog is created to help the population who think "Real Estate Stinks".  I can assure you, most of you reading this believe that it does....worse than any dumpster you can find on Coney Island.