San Antonio vs cape coral new investment property

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San Antonio vs cape coral new investment property

Prasad Ma
Member since 2021 · 11 posts · 3 votes

Hi All,

I am planning to buy my first investment property. Based in my discussion with multiple turnkey providers the two options came up were new construction properties in San Antonio, texas and Cape coral florida. I am confused now on which area to choose. My goal is to hold onto this for atleast 10 years for appreciation . Please advise. Thank you

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Patrick Bavaro:

 I also second @Stetson Miller regarding Cape Coral. I'm actually in the process of building a new build in Cape Coral right now. Chances are I'm probably using one of the TK companies you're referencing. What's crazy is that last year, appreciation was 25%-30% as Stetson mentioned. I just got an email from Zillow for my Cape Coral zip code estimating another 27% increase for the 1 year forecast. Crazy! My total build cost was $265k for a 4/3. Rents estimated at $2300 and post construction appraisals are at $340k-$410k depending on location. Happy to connect to share my experience. Good luck! 

Patrick out of sheer curiosity are you also selling or representing some builder or developer on these.. you keep copying and pasting the exact same thing in pert near all the threads you answer on. 

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  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    4y

    Hi @Prasad Ma,

    I can't speak for the San Antonio market, but Cape Coral hit historical highs in appreciation last year with some properties reaching as high as 25-30%. One thing that you see here that you very rarely see elsewhere is the added benefit of decent cashflow on top of your appreciation potential.

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  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

     I also second @Stetson Miller regarding Cape Coral. I'm actually in the process of building a new build in Cape Coral right now. Chances are I'm probably using one of the TK companies you're referencing. What's crazy is that last year, appreciation was 25%-30% as Stetson mentioned. I just got an email from Zillow for my Cape Coral zip code estimating another 27% increase for the 1 year forecast. Crazy! My total build cost was $265k for a 4/3. Rents estimated at $2300 and post construction appraisals are at $340k-$410k depending on location. Happy to connect to share my experience. Good luck! 

    3Reply
  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Prasad Ma ^. Sorry, forgot to tag you. 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Patrick Bavaro:

     I also second @Stetson Miller regarding Cape Coral. I'm actually in the process of building a new build in Cape Coral right now. Chances are I'm probably using one of the TK companies you're referencing. What's crazy is that last year, appreciation was 25%-30% as Stetson mentioned. I just got an email from Zillow for my Cape Coral zip code estimating another 27% increase for the 1 year forecast. Crazy! My total build cost was $265k for a 4/3. Rents estimated at $2300 and post construction appraisals are at $340k-$410k depending on location. Happy to connect to share my experience. Good luck! 

    Patrick out of sheer curiosity are you also selling or representing some builder or developer on these.. you keep copying and pasting the exact same thing in pert near all the threads you answer on. 

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  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Jay Hinrichs Hi Jay, no I'm not. I have my tags setup for keyword for FL and Cape Coral along with variations of turnkey to connect with others regarding their experience and sharing mine. Im a newer investor with only 3 deals to share/brag about, and this one (in my opinion) is my best. I've found it to be a very great tool to network with other investors to learn new strategies and pick their brain as they do with mine.  

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Patrick Bavaro:

    @Jay Hinrichs Hi Jay, no I'm not. I have my tags setup for keyword for FL and Cape Coral along with variations of turnkey to connect with others regarding their experience and sharing mine. Im a newer investor with only 3 deals to share/brag about, and this one (in my opinion) is my best. I've found it to be a very great tool to network with other investors to learn new strategies and pick their brain as they do with mine.  

     Gothca  good luck with it I am building up north FLA..  will see how it goes.

    I was buying courthouse steps in Ft. Meyer in 09  brand new homes for 30 to 50k I bought one duplex for 33k  the market there went up to about the values your tlaking about now in 06 then crashed so hard it was simply incredible.  but of course I just flipped all of those for the quick 20k profit  LOL..  

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  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Jay Hinrichs Whoa! Well, I'm hopeful it wont happen again, at least for another 2 years lol. I think we are in a different economic position compared to 2006-2008 with bad lending practices, IMO. To me, supply and demand is driving all of these crazy prices, along with inflation. I think that with the Fed planning to increase rates 2-3 times this year, we should see some curving of the appreciation. Definitely an interesting argument on both sides of the aisle. 

    Where in N FL are you building? Details on your builds/prices if you dont mind me asking? I can DM as well if you prefer. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Patrick Bavaro:

    @Jay Hinrichs Whoa! Well, I'm hopeful it wont happen again, at least for another 2 years lol. I think we are in a different economic position compared to 2006-2008 with bad lending practices, IMO. To me, supply and demand is driving all of these crazy prices, along with inflation. I think that with the Fed planning to increase rates 2-3 times this year, we should see some curving of the appreciation. Definitely an interesting argument on both sides of the aisle. 

    Where in N FL are you building? Details on your builds/prices if you dont mind me asking? I can DM as well if you prefer. 

     I have one in Deland and 4 over by ocala  1500 sq ft dingers. 

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  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Jay Hinrichs do you have a connection/intro you could make for me for Ocala market? I own a 4/2 out in Ocala about 10 minutes south of downtown and think Ocala is another terrific market for growth potential. Been interested in finding a builder out there. Were they spec builds? Thanks for your time

    1Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    4y

    @Prasad Ma

    Properties in San Antonio on average have appreciated over 18% on the last year, no surprises there.  My experience since I moved here over 10 years ago, single appreciation/year of my properties have been about 6% (except last year or so).  Take into account property taxes, the tax collector office in Bexar county and its surrounding counties/cities are very aggressive and well up-to-date with their software etc. Be prepared to pay property taxes. 

    2Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y

    Property taxes in the San Antonio area can turn a sweet grape sour. I don’t know the Florida market so I can’t speak as comparison.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Josue Vargas:

    @Prasad Ma

    Properties in San Antonio on average have appreciated over 18% on the last year, no surprises there.  My experience since I moved here over 10 years ago, single appreciation/year of my properties have been about 6% (except last year or so).  Take into account property taxes, the tax collector office in Bexar county and its surrounding counties/cities are very aggressive and well up-to-date with their software etc. Be prepared to pay property taxes. 

    ya I was just thinking this rapid appreciation in a state that updates tax's every year could really be weird.. on one hand you have this nice run up but on the other your cash flow the next year will go down while your tax's go up . unless of course you raise rents every year ??

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  • Michael Magbalon
    Thomasville, GA · Member since 2018 · 17 posts · 4 votes
    4y

    @Patrick Bavaro

    I have invested in this area as well but have a lot that I needed to find a reliable and decent builder that could help me put up either duplex or single fam

    Thanks

    Mike M

    2Reply
  • Adam David Graning
    Rental Property Investor · Minneapolis MN (minneapolis, mn) · Member since 2020 · 50 posts · 28 votes
    4y

    @Prasad Ma we have an STR in Cape Coral. It's such an affordable market compared the rest of south Florida. I think there's more room for appreciation. Cape Coral is also a great beginners market because it's a very simple market to get the hang of with all of the houses being pretty much the same. Let me know if you have any questions!

    3Reply
  • Prasad Ma
    OP
    Member since 2021 · 11 posts · 3 votes
    4y

    Thank you @Stetson Miller@Patrick Bavaro@Josue Vargas@Joe S.@Jay Hinrichs@Adam David Graning. I do see that San Antonio property taxes eating up the cash flow, also the tax rate for the new constructions are little high comparatively. I am hoping to find a SFR in the range of 250 to 300k in cape coral. One agent I spoke to has shown me some NB >300k with well and septic. I am still debating.

    1Reply
  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    4y

    @Prasad Ma With those criteria it would definitely be possible to find something in Cape Coral. Typically existing construction is going to work out better numbers-wise, but you will have to weigh that against your long term goals as the new construction will have significantly less ongoing maintenance initially

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  • Andre Crabb
    Investor · Tampa, FL · Member since 2017 · 205 posts · 92 votes
    4y

    @Prasad Ma hello how are you.

    I’m happy to help you with city analysis. What specific questions do have about each of them? What data do you need to help make your decision?

    Cheers,

    Andre

    0Reply
  • Rong Tan
    Member since 2022 · 36 posts · 26 votes
    4y

    @Patrick Bavaro hey pat nice to hear. I am looking to start w cape coral as well. Any insight ? Lands are 35k to 40k now by RTR...

    1Reply
  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Rong Tan yessir! I’m actually looking at buying another and see the same. Sure. Sending you a dm

    0Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    4y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Josue Vargas:

    @Prasad Ma

    Properties in San Antonio on average have appreciated over 18% on the last year, no surprises there.  My experience since I moved here over 10 years ago, single appreciation/year of my properties have been about 6% (except last year or so).  Take into account property taxes, the tax collector office in Bexar county and its surrounding counties/cities are very aggressive and well up-to-date with their software etc. Be prepared to pay property taxes. 

    ya I was just thinking this rapid appreciation in a state that updates tax's every year could really be weird.. on one hand you have this nice run up but on the other your cash flow the next year will go down while your tax's go up . unless of course you raise rents every year ??

     Yes, I do increase the rent every year, but at this rate if the market doesn't adjust enough and the county tax collector keep up with rapid appreciation, property taxes will catch up eventually with the cash flow.  Just an example, increase in taxes in one of my properties was about 20% total in the last three years, and my rent increase was just about 16%.  So I still getting an increase of cash flow regardless mainly because the only major variable was the taxes on my rental costs. 

    0Reply
  • Prasad Ma
    OP
    Member since 2021 · 11 posts · 3 votes
    4y

    Follow up to my conversation, is it generally good idea to fund the new builds. I was under the impression that the I would have to pay a binder fee and 20 down and once the construction is completed i will then fund the remaining. The turnkey company I spoke to want me to either pay the house cost upfront or use the private lenders and would essentially pay interest until the house is built. Whats the catch with these kind of deals, I believe the term is construction to permanent loan

    0Reply
  • Sastry Srini
    Canton, MI · Member since 2016 · 113 posts · 47 votes
    4y

    @Andre Crabb

    Thanks for your offer on helping with city analysis.. would you please share a general high level analysis of Cape Coral ( which zip codes to invest) or High level area wise analysis ( Northside or southside etc). That would be helpful. Thanks!


    1Reply
  • Andre Crabb
    Investor · Tampa, FL · Member since 2017 · 205 posts · 92 votes
    4y
    Quote from @Sastry Srini:

    @Andre Crabb

    Thanks for your offer on helping with city analysis.. would you please share a general high level analysis of Cape Coral ( which zip codes to invest) or High level area wise analysis ( Northside or southside etc). That would be helpful. Thanks!

    For sure Sastry! I'll dm you for details :) 
    0Reply
  • Peter Davis
    Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    4y

    @Sastry Srini

    NW and NE Cape Coral have nearly 400 available lots for sale under $50K on the MLS right now. There are no lots under $50K south of Pine Island Road, where the city is more built out. This doesn't account for any FSBO's out there, and I see a number of FSBO lot signs as I drive around the North Cape. From a SFR rental perspective, the rents are comparable across the NW to NE for new builds. (By the way, Santa Barbara BLVD is the dividing line between West Cape and East Cape.) 

    I think the biggest thing to consider when purchasing a lot in the North Cape is where it is in relation to the city's Utility Extension Project (UEP) areas. This is where the city is installing water, sewer and irrigation where formerly the homes were on well and septic. For example, if you're building a new home in a current (or future, once designated) UEP area it wouldn't make sense to pay to install well and septic when those systems will become obsolete soon after the city utilities come through your neighborhood. And when they do come through, you can expect a city assessment of approximately $20K. This was the cost for the last UEP project area, North 2. The assessment can be financed and tacked on to your annual property tax bill in November. You can find more information on the city's website, including project area maps: https://www.capecoral.gov/uep/index.php 
    Several years ago I created a YouTube video from the North 2 project area explaining Cape Coral's UEP and the resulting assessments. DM me if you'd like me to send it to you.

    All this said, don't be deterred as there are many many lots well outside the current UEP area and any likely near-future areas not yet designated. These are massive projects that take several years to complete in each designated project area. Good luck!

    2Reply
  • Rong Tan
    Member since 2022 · 36 posts · 26 votes
    4y
    Quote from @Peter Davis:

    @Sastry Srini

    NW and NE Cape Coral have nearly 400 available lots for sale under $50K on the MLS right now. There are no lots under $50K south of Pine Island Road, where the city is more built out. This doesn't account for any FSBO's out there, and I see a number of FSBO lot signs as I drive around the North Cape. From a SFR rental perspective, the rents are comparable across the NW to NE for new builds. (By the way, Santa Barbara BLVD is the dividing line between West Cape and East Cape.) 

    I think the biggest thing to consider when purchasing a lot in the North Cape is where it is in relation to the city's Utility Extension Project (UEP) areas. This is where the city is installing water, sewer and irrigation where formerly the homes were on well and septic. For example, if you're building a new home in a current (or future, once designated) UEP area it wouldn't make sense to pay to install well and septic when those systems will become obsolete soon after the city utilities come through your neighborhood. And when they do come through, you can expect a city assessment of approximately $20K. T

     Hi peter. I have a lot at the north 1 area which assessment is due to start this summer. As youve stated above, i would not build on it yet. Do you think i should hold it through assesment and completion of city utlity until i build or sell it now? I bought it for under 40k which i can flip for a few bucks...

    Just wondering like youve said, the lot should worth around 60k due to assessment and not sure if ppl will buy at the price after. 

    1Reply
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