Tampa, Florida Multi-family

Buying & Selling Real Estate
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Tampa, Florida Multi-family

Bryce DeHaan
Member since 2020 · 40 posts · 5 votes

Hey BP,

I am moving my family over to the Tampa area in the next 18-24 months. I will be looking to invest $200-300K into a multi-family deal at that time and I am open to a variety of deals to include 5 units and up. I will be looking for a value add deal but of decent quality. I would like to keep this in Tampa or it's surrounding areas but I do not have a tremendous amount of experience with the area so I want to avoid the bad areas. Where would you be investing right now and what should I be watching out for?

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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
5y

18-24 months is a lifetime in our real estate market.  Our inventory is nearly non-existent.  For every new listing, multiple over-list offers - all cash - can be expected within an hour. My investors are lined up to buy - and to buy everything with good bones that they can acquire. The issue is:  nothing to buy.  This is now.  And, here's what you should be celebrating that you missed so far:  51% of all tenants in Florida are delinquent in rent.  The demand for housing is off-the-chart as well.  My advice to you is simple but not what ready-investors want to hear:  Wait.  Do Nothing.  Plan Nothing.  Give it 6 months.  I have a feeling that those landlords/owners who suffered through this moratorium mess might be ready to wave the white flag and sell.  

Only fools rush in...

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  • Luke Rorech
    Real Estate Agent · Greater Tampa Bay · Member since 2017 · 392 posts · 290 votes
    5y

    Hi @Bryce DeHaan. Congrats on moving into the area, can't beat it in my opinion. Deals are moving very quickly right now. Are you planning on house hacking 4 units and under or is this strictly an investment? If so, what are some of the numbers you're hoping to hit? 

    1Reply
  • Jackson Babcock
    Investor · Charleston, SC · Member since 2021 · 120 posts · 108 votes
    5y

    Tampa is a hot market right now.  It has strong employment and rent growth.  In any competitive market, you are going to have to stay strict with your underwriting and wait for the right deal to come around.  I suggest when you move there, join as many local meetups as possible and start networking. Learn from other locals who know the area and that can teach you first hand. There might even be some virtual meetups in Tampa that you could attend in the meantime. Good Luck. 

    1Reply
  • Jorge VazquezBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 686 votes
    5y

    Twenty years in Tampa, there are no bad areas in Tampa anymore for long-term investing. Everything is changing fast. They call Tampa the new "San Francisco"...

    Graystone Investment Group4.6277 Reviews
    WebsiteView Page
    1Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Jackson Babcock

    We will be looking to buy this before we fully move out there so I will look for some meetups in the meantime. Thank you!

    0Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Luke Rorech

    This will be strictly an investment. I would be looking for at least a 12-15% COC but I'm not entirely closed off from anything. I will be looking for probably 8-16 units. I would like to find some investors in the area who are looking to partner in a large deal as well.

    An ideal team is going to be necessary and I have no shortage of energy so it’s pretty much about finding a good fit and getting things moving.

    0Reply
  • Dillon Cook
    Realtor · Greater Tampa Bay · Member since 2014 · 219 posts · 130 votes
    5y

    Tampa is a great long term investment. Investors know that and are accepting smaller and smaller returns on deals every day. It's crazy

    12-15% coc sounds unlikely

    0Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Dillon Cook

    I guess it all depends on how creative I can get, right?

    0Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Dillon Cook

    What kinds of returns are you seeing with multi family? And I’m probably talking $1M and up or somewhere around there

    0Reply
  • Dillon Cook
    Realtor · Greater Tampa Bay · Member since 2014 · 219 posts · 130 votes
    5y

    @Bryce DeHaan

    10% COC or under.

    Prices and rents have been consistently soaring upwards for the last couple years. This is my opinion, but with continuing inflation/ money printing and low interest rates, this trend will continue for awhile.

    A decent deal will turn pretty sweet within a year or two. It's a long game

    0Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Dillon Cook

    We won’t be living off of any of the rental income for quite some time and plan on just adding value, cutting expenses, and selling at the right time or refinancing once the value add is finished to scale into bigger deals as efficiency as possible.

    I’m not extremely worried about the immediate return as I know there is potential in creative value adding. The main thing for me would be to build the right team and kind of interview all the way around so that I have a team I can trust.

    We would like to get into something big enough that we can hire a good quality property manager. We are looking for true passive income and not having to be an employee for our own assets. I own a cleaning company in Arizona and I know that it’s slim pickings for a good property manager. Obviously I need a realtor and a lender as well but all of that may need to come after we’ve pin pointed our location.

    What experience do you have in Multifamily? We can message privately if you’d like!

    2Reply
  • Luke Rorech
    Real Estate Agent · Greater Tampa Bay · Member since 2017 · 392 posts · 290 votes
    5y

    @Bryce DeHaan unfortunately, as @Dillon Cook mentioned, 12%+ CoC is extremely hard to find in the Tampa Bay area at this point in time. I'm seeing most Class B MF going in the 5-6% cap range and even that is starting to get squeezed down.

    1Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Luke Rorech

    Thanks for the reply! Is that including the outer suburbs of Tampa as well or just in the city?

    0Reply
  • Luke Rorech
    Real Estate Agent · Greater Tampa Bay · Member since 2017 · 392 posts · 290 votes
    5y

    @Bryce DeHaan That's in Tampa, St. Pete, Cleartwater area. There's always a few outliers but they seem to be gobbled up extremely quickly.

    The best bet is to find the path of development you believe in and buy an under performing asset in that said path. It'll give the best value add opportunity without having to compete with every other investor focusing on a few selective areas. 

    1Reply
  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    5y

    18-24 months is a lifetime in our real estate market.  Our inventory is nearly non-existent.  For every new listing, multiple over-list offers - all cash - can be expected within an hour. My investors are lined up to buy - and to buy everything with good bones that they can acquire. The issue is:  nothing to buy.  This is now.  And, here's what you should be celebrating that you missed so far:  51% of all tenants in Florida are delinquent in rent.  The demand for housing is off-the-chart as well.  My advice to you is simple but not what ready-investors want to hear:  Wait.  Do Nothing.  Plan Nothing.  Give it 6 months.  I have a feeling that those landlords/owners who suffered through this moratorium mess might be ready to wave the white flag and sell.  

    Only fools rush in...

    5Reply
  • Dillon Cook
    Realtor · Greater Tampa Bay · Member since 2014 · 219 posts · 130 votes
    5y

    @Patricia Steiner

    This is the best advice. I forgot the time frame. With how fast things are moving, impossible to give reliable advice that far out. Can only speak to what's happening now

    0Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Luke Rorech

    Thank you sir!

    1Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Patricia Steiner

    I actually don’t mind that advise at all! I’ve been thinking the same thing and I know that timing is key. I won’t be doing anything for AT LEAST 12 months except going out to scale the area. One thing I am confident of is that the market will adjust for opportunity, it’s just about when. I think I more so need to get a feel for which neighborhoods are going to be the best and really scope the demographic of each area. Which areas would you suggest as far as a growth and infrastructure is concerned?

    0Reply
  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    5y

    @Bryce DeHaan  

    That's changing too.  There are definitely markets that will remain "challenged" forever simply because there is no place else for people with nothing to do but do nothing good to go.  And, if you follow what's "hot" today, the field will be too crowded and the prices too high in those markets.  Traditional MF won't look "traditional" in the future - and I think that's the play worth doing. The next six months will reveal a lot.  The good news mixed into all this "wait and see" is that Florida is a great place to invest, live, and play.  The housing demand is off-the-chart. 

    So long answer short:  stay tuned. It's going to look different very soon.  And, that's exciting...

    1Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Patricia Steiner

    Thank you for your advise!

    0Reply
  • Ken Gee
    Investor · Tampa, FL · Member since 2021 · 27 posts · 29 votes
    5y

    Are you investing as the operator or a passive investor?

    0Reply
  • Erik Justin
    Investor · NJ · Member since 2017 · 1 post · 1 vote
    5y

    @Patricia Steiner

    Sound advice !

    1Reply
  • David Ginn
    Real Estate Consultant · Houston, TX · Member since 2020 · 206 posts · 944 votes
    5y

    Refer to my guidance, right now I would not take anything for buy-and-hold. I would be taking down flips or lending at 12 percent and 3.75 points, that's what my buyers pay to my investors.

    2Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Ken Gee

    As the operator!

    1Reply
  • Bryce DeHaan
    OP
    Member since 2020 · 40 posts · 5 votes
    5y

    @Ken Gee

    But, I plan on getting a large enough deal that I can use a good property manager.

    0Reply
  • Ken Gee
    Investor · Tampa, FL · Member since 2021 · 27 posts · 29 votes
    5y

    @Bryce DeHaan

    Great idea.  A good property manager will help you a lot.  

    Let me know if there's anything I can do to help you.

    Warm Regards,


    Ken

    0Reply
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