This is my first post here, so I wanted to quickly introduce myself. I’m brand new to BiggerPockets and to real estate investing in general. By profession, I’m a dentist, and while I truly love what I do, I’m also really excited about what the world of real estate has to offer in terms of financial growth and long term stability.
As a rookie, I came across the listing posted above for a property in Florida. The numbers shown on the deal analyzer look great with high projected cash flow and solid estimated returns. Assuming the property is in decent condition and the assumptions are accurate, I’m wondering:
Why wouldn’t everyone jump on a deal like this?
Are there common red flags or factors that new investors tend to overlook when deals look this good on paper?
I’d really appreciate any insights from those more experienced. Thank you in advance and I’m looking forward to learning and growing here.
Developer · Member since 2020 · 4k+ posts · 4k+ votes
1y
OP. I always like having an unfair advantage.
You can do SFH and rentals and compete against everyone. Depending on your situation. I would look at yourself personally. Do you own your own dental building. Can you find one with living quarters above?
Start and sell practices. Use that as your scaling approach. Sell a business and not just real estate. Think of coming out of college or the military plus starting a practice. If you could seller finance you have a Sticky client. They can lease to own. They won’t want to move due to their client base and starting over.
yes, something is off. I don't know that market, but random long term rentals just aren't cash flowing $1000 a month right now. so - good instincts.
and yes, new investors tend to overlook lots of costs. closing costs to buy, rent ready costs to rent, repairs and capex to maintain, turnover costs when tenants move out...
the market is very, very tough right now. with interest rates high cash flow is almost non-existent on long term rentals with conventional financing.
This is my first post here, so I wanted to quickly introduce myself. I’m brand new to BiggerPockets and to real estate investing in general. By profession, I’m a dentist, and while I truly love what I do, I’m also really excited about what the world of real estate has to offer in terms of financial growth and long term stability.
As a rookie, I came across the listing posted above for a property in Florida. The numbers shown on the deal analyzer look great with high projected cash flow and solid estimated returns. Assuming the property is in decent condition and the assumptions are accurate, I’m wondering:
Why wouldn’t everyone jump on a deal like this?
Are there common red flags or factors that new investors tend to overlook when deals look this good on paper?
I’d really appreciate any insights from those more experienced. Thank you in advance and I’m looking forward to learning and growing here.
@Robert Weinstock $4,000/month in rent for a 2 BR property seems high to me - there are two 4 BR properties nearby that are only asking $2,400-$2,500. Maybe you can get $4k/month if you do STR (if it's allowed), but then your operating expenses will probably be higher. Otherwise, your $1k in positive cash flow has become a $500 monthly loss. Just my 3 cents!
Thanks, Jaycee and Nicholas! Spot on. After looking into it further, as Jaycee noted, the projected rental rate is nearly double the local market rate for SFH. It likely reflects a maximum estimate from operating it as STR.
Lesson learned: can’t rely on numbers prepared by sellers engineered and presented to push the sale and the importance of doing own due diligence.
Developer · Member since 2020 · 4k+ posts · 4k+ votes
1y
OP. I always like having an unfair advantage.
You can do SFH and rentals and compete against everyone. Depending on your situation. I would look at yourself personally. Do you own your own dental building. Can you find one with living quarters above?
Start and sell practices. Use that as your scaling approach. Sell a business and not just real estate. Think of coming out of college or the military plus starting a practice. If you could seller finance you have a Sticky client. They can lease to own. They won’t want to move due to their client base and starting over.