Wholesaling in Orlando/Central Florida

14 Replies

Hello all,

This is more of a PSA or an FYI however you choose to view it.

For those of you that plan on getting into wholesaling because you have been told it's the quickest money to made in RE today...consider this for the Orlando market. I spoke with an agent this morning that I've done multiple deals with and asked her why none of my offers have been accepted recently...her response, and I quote " Scott, as recently as 2 months ago you would send me an offer and it would be among 4-10 other offers that we had to make a decision between. Now on average it's 60-90" 

60-90 Offers! And of course many of them are WAY above list price.

The problem is, there are SO many people driving up the wholesale prices and the retail prices are not keeping up with them. So before when you could pick up a house for...lets say..$110,000K and put $30K into it for rehab and then turn around and get a resale value of..lets just say $200K. Now that same house is getting a wholesale price to the bank of around $145-150K with the same $30K in repairs and still have an ARV of $200K...No es bueno!

So, good luck to all you new people out there and happy hunting;)

Orlando is hot apparently but not all of FL is like that. I lived in Orlando for 12 yrs in the 90s where the real estate climate was a tad different then. I have a very good friend of mine, very wealthy who recently told me he's still buying on average 4-5 houses per month in JAX. Mostly REOs. Wholesale pieces, below market. He pays cash on the nail, as he doesn't mess with banks.

He doesn't always win the bid but like he said, it's a numbers game. He will even buy sight unseen, and then if he wins the bid, he will go and look at it. He will only close if he likes the house. If he doesn't, no deal. And moves on. 

 But it's definitely more difficult than it was. So don't assume all FL markets are the same. 

Good luck. 

@Scott Wagoner , yep, I think the guru train came through and told everyone that wholesaling is the only way to get started in REI.

Firstly, as much as I'd like the notoriety, attention and boost in my forum stats that @Brandon Sturgill received after his post, I'm not going to stir the pot quite so aggressively:) BUT, with the number of them flooding this particular market, it's important to re-evaluate strategy in order to maintain deal flow. If you are exclusively looking on the MLS, your margins are going to be much thinner.

@Blanchard J Ross , right you are sir.  Orlando is particularly hot right now, but there are certainly areas where good deals can be found.  

Agreed, FL is waaaay flooded with investors.  Its like you've got investors that are already here doing their thing, and then you have the people who move here to try to flip homes and never even lived in FL.  Kind of like what happened back during the RE boom.  People from certain areas of the country and outside the US bought homes in FL, trying to flip them quick and run back to wherever. 

You may be able to find a niche in Jacksonville, or a place in the panhandle, etc.  But Orlando or South FL........ nah. 

Yes Miami is hot too with all the developers out there. Despite living in Orlando, I was never convinced that this was the best place to find good deals. I've known folks put in a myriad of offers and wouldn't get any accepted. But I've known guys get really lucky and stumble on a great deal. If I had my time over again, I would've picked Tampa, or Jax You live and learn. 

Originally posted by @Jared S. :

Agreed, FL is waaaay flooded with investors.  Its like you've got investors that are already here doing their thing, and then you have the people who move here to try to flip homes and never even lived in FL.  Kind of like what happened back during the RE boom.  People from certain areas of the country and outside the US bought homes in FL, trying to flip them quick and run back to wherever. 

You may be able to find a niche in Jacksonville, or a place in the panhandle, etc.  But Orlando or South FL........ nah. 

Call me one of them I guess! lol! I moved here a year and a half ago for my wifes job and I decided to get my real estate license and get in the mix. Quite frankly, property is just SOOOOO cheap here compared to NYC where we came from that real estate was a no brainer. We aren't doing flips, we are doing buy and holds but in my short career I can't believe how quickly I'm seeing the prices going up on things. The deals are harder and harder to find but there are still some great deals out there. And I primarily work off of the MLS at this early stage in my career. The rental income I get off of our properties averages double the PITI on the mortgage so when I see people on BP getting excited about making "$100 a door" I chuckle and say "no wonder why they want to own 100 units, they need too!"

Hello,

I am in Fort Lauderdale and everybody wants to wholesale!! I can not find anybody to buy and hold. While especially in this market buy and hold is the better strategy. The rental market is hot and you can pay a little ore for the properties you are buying, thus beating the competition. 

Originally posted by @Scott Wagoner :

This sounds like a problem you would have in Jacksonville where it is currently a seller's market. Regardless, you just have to find a seller that is motivated to sell. Also, not certain of the factual basis of the realtor's comment if the Orlando market is currently described as being 'warm'. If inventory is currently scarce in Orlando -- certainly want to be on the seller's side.

I would agree @Scott Wagoner

Wholesaling in most of the big metro areas in Florida is very difficult right now, especially for people starting out. You´d be better off looking for niches in smaller areas. We work in New Port Richey and other areas of Pasco for example. 

Also, because there is so much demand right now, it´s difficult for wholesalers to make a profit - I have been offered product by them, but their asking prices are generally far more than I´m willing to pay. 

Still, there are always deals out there for people who do their homework and persevere.

@Scott Wagoner

 Is right on this.

I got a call from someone in Australia yesterday trying to wholesale me houses in Orlando. She lives in Australia and is making offers here and trying to wholesale. Sign me up!! 

I have been working on a couple off market deals that I am trying to sell now. 42 unit apartment complex and 136 unit self storage complex in Central Florida. I will be posting in the market in a little bit.

I would also agree with @Scott Wagoner. 

Having access to the Central FL MLS I put together a bar chart that shows exactly what Scott is saying is true. The linked chart shows only SOLD cash transactions of bank-owned single-family homes listed under $250K, so as to narrow the scope of the data.

http://mfr.mlsmatrix.com/DE.asp?ID=DSE-47977008628

@Bruce Kinser the graph is exactly what we have been seeing in Central Florida/Lake County we have stopped bidding on bank owned as it is more work and selling for more than any invested wants to pay these days!  

well I think part of that skew in the numbers is the banks are getting realistic with their list prices. I've seen so many beat up REO properties listed at essentially the sell prices of nice resale homes and all they do is sit and sit and sit for months until the bank finally reduces them far enough. In the last few months, I've been seeing REO properties priced more appropriately right out of the gate and as a result they are getting so much more attention. In fact, I'm working with a buyer on one now and the issue we are having is he has fixed it up and is now doing a cash out refi to get his cash back and buy more but we are having trouble getting the appraisal value up. some appraisers just dont' really know what to do with such a rapidly appreciating market. Lots of appraisal problems going on these days from talking to my fellow agents.

Wow that bar chart shows it perfectly how hard it's been lately to find deals on the MLS and it definitely blew up in April. I remember how I started noticing more and more rejections and highest and best all the time.

This is interesting, I am in South FL and the deals are quite hard to find. And it seems like a lot of investors are interested in flipping (me being one of them) which makes it even harder! Like @Jacques Wurms said, the rental market is hot down here. 

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