Build-to-Rent in Florida

8 Replies

I’ve been investing in rentals for the last 15 years with properties in CA, GA, and FL and recently been purchasing single family, duplexes and quads in the central Florida area and now researching the Build-to-Rent model. My thought is that if can build under 150/ft and keep the total cost in low 200s, the initial cash-flow/return will not be great but can make up for it with scalability, low maintenance and better appreciation. I’m currently focusing on the Corridor between Tampa and Orlando (Lake Land area) and would love to hear everyone’s thoughts on this strategy.

@Allen Motakef sounds like a great model, but seems (to me) difficult to do if you are not local. There are so many hurdles with environmental, permitting, engineering, working with city and/or county, finding a GC that you can trust with everything etc. Also, you are speculating to some degree as from start to finish could be 8-12 months from land acquisition to getting your CO, tying up your money for a long period.

A lot of Polk is zoned minimum 5 acre lots when you get in the more rural areas and Lakeland can be hit or miss in regards to the 'class' of the area. There is definitely a need and if you have the resources to put it all together, I think you would do well.

Keep me posted, I may have some good contacts for you in Lakeland.

Originally posted by @Allen Motakef :

I’ve been investing in rentals for the last 15 years with properties in CA, GA, and FL and recently been purchasing single family, duplexes and quads in the central Florida area and now researching the Build-to-Rent model. My thought is that if can build under 150/ft and keep the total cost in low 200s, the initial cash-flow/return will not be great but can make up for it with scalability, low maintenance and better appreciation. I’m currently focusing on the Corridor between Tampa and Orlando (Lake Land area) and would love to hear everyone’s thoughts on this strategy.

 I know some gentleman that did this in Lake county FL. What they found during the pandemic is that the values jumped so much that it made more sense to sell the home. With construction costs increasing and home values increasing it was a better deal to sell instead of hold. If you would want to know more I could connect you with them. 

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Thanks for taking the time to chime in @Shawn McCormick . I totally agree that this strategy is very involved and difficult to do remotely and that’s why I’m looking to partner up with couple of local investors. To start I’m focusing more on areas closer to Orlando along Hwy 4 & US 27 (like Davenport) which currently has major growth. Let me know if you have contacts with expertise in these areas that I can talk to.

Thank again,

Allen

@Tyler Gibson , thanks you for reaching out.  Absolutely, I would love to connect with the investor you know and compare notes.  It’s awesome to know that he was able change course and maybe even benefit more from the original plan. Having several exit strategies is one of the main reasons so many of us love real estate.

Thanks again,

Allen

I am completing my first build to rent in Jacksonville.  I have done a few builds and sold them off.  The market is hot and they were sold before they were built.  

It is a process to build, doing it yourself remotely is going to be challanging.  I would recommend partnering with a local or just use a local builder.

Allen, I would be happy to help you with some expertise and can also refer you to some great realtors who work well with investors. Since we are a property management company here in central Florida, we have some great insights to share. 

We are looking to do something similar in the north port and port Charlotte areas and would like to connect with agents, builders and other professionals in that regard

Hello @Allan Gonzaga ,

Yes, Build 2 Rent is perfect for long-term wealth-building for the exact reasons you mentioned. They have lower operational costs, great appreciation puls you get the highest rental rates. We currently have over 50 properties new construction properties scheduled to be completed in early 2022. With inventory as low as it is, it's common for resale homes for more than new construction. We recently sold a duplex in Port Charlotte, that appraised for 90k above purchase price. 

@Magesh R. Yes, we love the Port Charlotte, North Port, Cape Coral area as the land cost is very low and rental rates can be as high as nearby metros. We believe this area is on the path of prosperity and will continue to appreciate well as it is currently affordable but highly desirable. 

Please advise if I can provide any additional assistance.