Have cash and its burning a hole in my pocket...Ready and Eager to begin!

Have cash and its burning a hole in my pocket...Ready and Eager to begin!

Investor · Huntington Station, NY · Member since 2015 · 3 posts · 0 votes

Hello all,

My name is Tony, I am 23 year old New York and an avid investor. For the last 2-3 years I was heavily involved in building my wealth by day trading and traditional equity investing. Since I began investing, owning and renting properties has always intrigued me and I knew one day I would want that to become a part of what I do to accumulate passive income. Well that time has finally come! Right now I have about $100k to invest and have already begun my search. Earlier this week, I lost out on the first ever property I put an offer in on in Orlando. Within the next year, my family and I will be permanently relocating to the Sarasota/Bradenton part of Florida so i feel it would be best to have rentals in the state I intend to live in for many years into the future. The property, was a 2 bed 2 bath 972 sq. feet unit listed for $27,900 with a cheap cheap HOA of $183. Unfortunately there was multiple offers and It didn't work out, life goes on. My main strategy in the short term has a few small components to it, in an effort to achieve my main life goals. I intend on purchasing a property soon all in cash, which would begin my cash flow. From there, I will have that rental revenue allocated to an account strictly to purchase the next property, and so the snowball effect that you all know about begins. There is many more parts but Ill spare you all the details haha I intend on having a property management company take care of the properties.

So to start, Im open to investing in Florida, strictly condos and in a price range of $30-$45k. The most important thing that Im going to need to learn from you all is:

 Where does everyone feel are some good rentable areas in Florida?

I truly do appreciate everyones input and any advice you could give! Again, I am a very motivated investor and am ready to dive right in to a good opportunity.

Thank you all and I look forward to hearing from you!

Tony

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
11y

@Tony K.

  don't tell folks what kind of cash you have on an open forum less you want 5 thousand PM's about the great deal someone has for you  LOL

See this reply in the discussion

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  • Professional · Glenview, IL · Member since 2015 · 114 posts · 65 votes
    11y

    Hi Tony... Condo's can be good investments just make sure the HOA fees don't eat up your rental profits. Also make sure the HOA is healthy financially. My first investment was a condo and the HOA was broke couldn't keep up the common areas which hurt my resale value in the end. I highly recommend you leverage your cash so you can expand your purchasing power. Give me ring I will guide you down the path in your local area to find good deals. I'm in chicago but I know how to win deals in any market. First step is finding the right broker and lender to make you successful. Happy hunting!

  • Real Estate Agent · Orlando, FL · Member since 2008 · 551 posts · 159 votes
    11y

    @Tony K. welcome to the Florida real estate game.

    I am actually and agent and investor in Orlando. While I am not a property manager, I work for a property management company and our investors have a lot of condos. I have seen the numbers of some and after the HOA and management fees there isn't that much left over unless they paid cash. They would probably get a better return on their money if they used leverage and spread their cash out over multiple properties.

    It has been my position for the last 10 years that Orlando is not a good place to invest in condos. The main issue that I have with condo's are the high condo fees along with the unpredictable nature of association financial health as there have been so many foreclosures. My secondary issue is that the buyer pool is smaller when it comes time to resell. Many of our condo units are conversions that used to be standard multifamily apartments before getting new paperwork, a splash of paint, and faux granite countertops. The properties build to be condos tend to be larger and have more amenities. However, the prices compete with single family homes.  I have always considered condos more of a lifestyle choice than an investment. That said some have done well investing in cheap condos.

    If you are really interested in recycling funds while building a portfolio consider fix to rent deals with a cashout refi once the property is rented. When the numbers are worked correctly the same cash can cycle over and over with a new acquisition in your portfolio on each cycle.

    Feel free to connect with me. I am happy to answer any questions that you may have about the Orlando area.

  • Investor · Asheville, NC · Member since 2011 · 833 posts · 499 votes
    11y

    Hey @Tony K. knows his stuff, especially about this market, and I concur with him regarding condo's.  

    In some markets that have limited land for development, condos appreciate well and are very in demand. I've lived in both Portland, OR and Los Angeles, and condo's appreciate very well in those markets. Condo's are tough to sell here, and the fee's make it really hard to cash flow if you're taking on debt, and make your COC return pretty darn low if you're not. You are also competing with brand new apartments, at competitive rents that are better maintained with better amenities, and are generally in a better location. (27 and counting, with 6,000 + new units coming on the market).

    http://www.bizjournals.com/orlando/blog/2015/04/27...

    Not to say you can't ever do well with a condo down here, but it will have to be that diamond in the rough.

    To John's second point, you can do very well with the BRRRR strategy. I just partnered with an investor to do just that, you can check out the post here:

    http://www.biggerpockets.com/forums/517/topics/211...

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    Why condos? Condos as well as HOA can impose rules that will make your life difficult as an investor. I currently own one condo and I can't wait to sell it! The rules for those units don't promote investment. I purchased it because it was offered to me at a ridiculously low price (less than I would have offered) but have no intention of holding it. As a general rule I avoid condos for my portfolio. I just showed a client a villa in a HOA. The owner is selling because the HOA just amended the rules: no rentals. I don't want to own and then have rules like this imposed. Basically, it would force you to move in or sell.

  • Program Manager/Systems Engineer · Oviedo, FL · Member since 2015 · 10 posts · 7 votes
    11y

    Tony,

    When you are looking at that price range with HOA fees just make sure that you understand all the sunk costs, turn over for that asset class, and potential assessments that you might be facing. Even with cash depending where you buy and if you manage it yourself you might have problems cash flowing. Perhaps a duplex or triplex at that price might be your best bet.

  • Investor · Orlando, FL · Member since 2012 · 823 posts · 303 votes
    11y

    CONDOS!?!?!?!?!?!

    ...............We are better off just blowing it on fun stuff in Orlando.

  • Rental Property Investor · Fayetteville, NC · Member since 2014 · 884 posts · 670 votes
    11y

    Do yourself a favor and invest in SFR's that don't have associations. I learned the hard way that associations cost money as well as heartache.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Tony K.

      don't tell folks what kind of cash you have on an open forum less you want 5 thousand PM's about the great deal someone has for you  LOL

  • Curtis YoderPro Member
    Rental Property Investor · Tulsa, OK · Member since 2014 · 241 posts · 187 votes
    11y

    Welcome to BP! 

    One of my first investments was a couple of condos in downtown Orlando. I had an idea that I wanted multiple condos as they would be easy to maintain, but no real experience. That was over ten years ago, I am in the process of listing the last one now that the market has improved a bit. With that said, the first year I owned these my ROI was over 20 points.

    During the market crash rents were lowered significantly and the HOA began having foreclosure and empty unit issues. My HOA fees went from $160 to now almost $600 a month. I thought I would be protected from this as the building is one of the nicer condos in Orlando.

    The bottom line is that you cannot control the HOA board nor the market conditions. So part of your investment is totally out of your control and you will have little influence even if sitting on the board. Do yourself a favor and skip this hard lesson and spread your investment monies out over three or four SFH's or multifamily and begin your rental portfolio that way. Good luck to you, I look forward to hearing more here on BP!

  • Rental Property Investor · Mineola, NY · Member since 2014 · 838 posts · 212 votes
    11y

    @Tony K. why condos in Fl?

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