Investor in FL thinking about next steps. Appreciate any ideas!

Investor in FL thinking about next steps. Appreciate any ideas!

Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes

Hi BP experts- I have been listening to the podcast for a few months now and am learning lots. I am a current investor and working on trying to figure out my next steps. We moved to Orlando, FL a year ago from Boston and I had been slowly acquiring 3/2 single families in Vero Beach (where I grew up) which is about 1.5 hours from Orlando. I self-manage these. I work (w-2) 4 days a week doing economic research at a well paid gig. I like the 3/2s with families and I have had very low turnover which makes them easy to manage.

Here is a bit of background on my portfolio. 

Market: Vero Beach, FL

1) Own free and clear 3 - 3/2 SFRs with approximate value of 120k each. I am currently selling on of these for 121k

2) Financed- 30yr ~5% 2- 3/2 SFRs with values of 85k and 130k; both have about 20% down. 

Market: Orlando, FL

1) Purchased a 3/1 SFR at auction with a business partner and will flip this house in next 3 months. Total cash in 103k + expected 15k return.

Market: Dallas, TX

1) Just joined a syndication for a 244 unit apartment complex as a limited partner- 50k. Money is tied up for 5 years with expected IRR of 18%.

My question: I am struggling to understand what my next steps are. I have a lot of equity in my current homes (~400k in Vero and 120k in the Orlando flip). I am expecting to get 100k out of the house I am selling in the next few moths after fees and to get the 120k out of the Orlando flip. My focus has been 3/2 SFRs in Vero Beach, but I want to buy properties in Orlando now in my market. The 3/2s are now much more expensive than previously and hard to find 1% deals. I am also interested in duplexes, and larger, but I also think it is important to stay focused and I really understand the 3/2 market well. I would also like to leverage my funds to do some bigger deals (potential 220k available soon puts me around 1 million property and could cash out refinance the others for even more). 

My goals are to scale up to about 100k post tax profit from the properties. Right now, I am probably at about 35k after tax. I want this to be semi-passive, but not just dumping it all in a syndication or REITS. 

In one scenario, I would buy 5 more 3/2 SFRs in Orlando market in next year and continue to slowly build my portfolio. I am ok with making this a larger portion of my time, if necessary. However, my question is what are my options? What am I not considering? Any ideas for how to scale quickly? Is it a bad idea to move to different properties (non SFR) where I am less of an expert? How can I best leverage all my equity/cash?

Appreciate any thoughts. 

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Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
9y

@Peter Amico, you're right about the prices in the actual city of Orlando making cash flow difficult. However, better cash flow is still easily had in the outlying towns like Clermont, Apopka, Davenport, Kissimmee, Altamonte Springs, and so forth. You're still in the Orlando Metro Area, but prices are far more reasonable. As it concerns switching investment types, I think it's hard to argue against the cash flow and scalability of multi-family apartment complexes. If you can come up with $100-$300k in cash as a down payment, you could find a smaller apartment complex. 

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

    I like SFR but they are work. Have you considered HML. That can be very profitable.

  • Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes
    9y
    What are terms/rates for typical loan?
  • Attorney · Orlando, FL · Member since 2016 · 40 posts · 33 votes
    9y

    Hi Peter, 

    Welcome to BP! 

    I think that the answer to your question depends on what direction you are comfortable going in and where your risk tolerance is at. 

    You mention that you want to scale up to 100k quickly, so to me it sounds like slowly growing your 3/2 SFR portfolio's in Orlando may not be the most direct way to achieving this goal. That's not to say that SFR's won't get you there, because they eventually will. But if you want to get there faster you may want to consider those multi-family opportunities that you say you are also interested in, as those will likely get you a better return because of the increase in units. The con here would be that you are not as familiar with multi's as you are with SFR's, and management may or may not be more of a challenge than your SFRs. Again this all goes back to your comfort level and risk tolerance.

    Personally, I would probably acquire one or two SFR here in Orlando and then be on the lookout for any good mutli-family opportunities. I think this would be a good way to diversify and slowly get into the multi-family game while at the same time acquiring more units than if you only were to get 5 SFRs. This would probably put you on a faster track to your 100k goal.

    This is all just my opinion of course! 

  • Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes
    9y
    @Stewart Vargas-Sosa thanks for the thoughts. Very helpful.
  • Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
    9y

    @Peter Amico, you're right about the prices in the actual city of Orlando making cash flow difficult. However, better cash flow is still easily had in the outlying towns like Clermont, Apopka, Davenport, Kissimmee, Altamonte Springs, and so forth. You're still in the Orlando Metro Area, but prices are far more reasonable. As it concerns switching investment types, I think it's hard to argue against the cash flow and scalability of multi-family apartment complexes. If you can come up with $100-$300k in cash as a down payment, you could find a smaller apartment complex. 

  • Attorney · Orlando, FL · Member since 2016 · 40 posts · 33 votes
    9y
    Originally posted by @Peter Amico:
    @Stewart Vargas-Sosa thanks for the thoughts. Very helpful.

    No problem, glad to help. If you are interested in seeing what kind of multi-family deals are listed in the Central Florida area just let me know, I can easily add you to my list. Good luck! 

  • Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes
    9y
    @Andrew A. Send me any possible multi-family deals in that price range. Also I'd be interested in sfrs in some of the towns you mentioned. I'm in 32806 for reference.
  • Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes
    9y
    @Stewart Vargas-Sosa that would be great.
  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    @Peter Amico

    I own SFR as well as do HML. The HML returns have been far superior to buy and hold PLUS you don't have the joys of tenants and toilets:)

  • Real Estate Broker · Apopka, FL · Member since 2017 · 492 posts · 528 votes
    9y
    Definitely look into the Apopka market! I live in Apopka and the growth is insane currently. There is continued expansion to the 429 toll road network, the "Wekiva Parkway" that will eventually be a direct shot connecting I4 at the 417 down through Apopka to Disney, the turnpike, airport, etc. I'll make Mt. Dora, Sorrento, Mt Plymouth, and Apopka (previously rural out-of-the-way locations) all prime locations to live for those who work or commute to Orlando, Maitland, or the attractions. It will also route out of state travelers who used to come down I-95 and take I-4 through Orlando to instead bypass the I-4 madness and come through our area. I live in Apopka, very near the 451 toll road (which is a branch off of and connects to 429/414 tolls) and I can get nearly anywhere in Orange Seminole or Lake county in 45 mins or less, typically without using I4. As the toll road completes, that convenience will extend to those who live as far north as SR44 and SR46. It will also complete the "bypass loop" around greater Orlando that is currently missing it's west and north portions. On top of that, there's a huge new hospital campus being built near the 414/429 interchange in Apopka that is driving massive residential expansion, and talks of a Lake Nona type medical city with vacant land readily available. There's a 39 acre "Apopka City Center" breaking ground near the 436/441 merge, and countless other developments and more new builder neighborhoods than I can track. I personally am a year or two off from purchasing my first investment property (thanks to a costly divorce I'm still recovering from financially) but my portfolio will be in my immediate area. I purchased my personal home for $179k in 2009 and identical houses in my neighborhood have gone under contract for $237-245k in 3-5 days recently. Nothing seems to stay on the market for even a month. Rents are climbing quickly, older homes are being flipped, and apartments being built with $1100-1600 Rents for 2-3 bdrm units. With all of the infrastructure and development growth here, the fact that there are still several hundred acre plots of raw land for sale, etc, I see it being a strongly growing market for the next 15+ years, easily. Prices have climbed strongly, but it's not ridiculous like some of the "Orlando" zips. I personally wouldn't live down in the congestion of the city and love the convenience and relative country feel of the Apopka area. Right outside of my neighborhood is a 15 acre lot zoned for multi-family that I'd buy ans develop in a heartbeat if financially able to. I'm no expert, but as a local I say it's worth a look!
  • Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    9y

    Work on the loan, who will let you get 5 mortgages?

    Try to time the market it may be you are buying at the peak. In CA SFBA the investors all disappeared locally as everyone senses the peak is there or close to it.  It will be a roller coaster slide again.  

  • Realtor · NY · Member since 2016 · 55 posts · 23 votes
    9y

    @Peter Amico If I'm in your place  ill just refinance, get my money back, keeping what you have with positive cash flow, and continue in orlando, there is good deals all the time in Orlando, all the properties I bought this year are 13+ cap rate, I got 9 properties in less than one year. right now there is no single good multifamily in the area for sale unless you wiling to buy in pine hills or that kind, I'm full time looking lol, I almost know every single house in the market, the one percent rule is the easiest to find . you can even find 3% in pine hills but it's really not worth it. 

    Good luck    

  • Investor · Orlando, FL · Member since 2017 · 21 posts · 6 votes
    9y

    @Account Closed thanks for your note. Can you send me some of the example properties you bought?

  • Realtor · NY · Member since 2016 · 55 posts · 23 votes
    9y

    @Peter Amico I'll send you in private msg

  • Investor · Orlando, FL · Member since 2016 · 9 posts · 2 votes
    9y

    My wife and I just moved to the Orlando area and we've been looking for investment property here as well. Would you mind letting me know where you were getting these deals as well @Ahmed Souissi?

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

    @Peter Amico

    Rates/terms depends on what you can negotiate, etc. Some people call and don't want to pay my rates. No problem. Others pay and take the money over and over. Holding 1st lien mortgages isn't as "sexy" as owning RE but the returns can be quite high. My last one netted 36% per anum and one that is expected to pay off tomorrow will yield 29% if it closes. These returns are on an ANNUAL basis.

  • Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
    9y

    Be careful in ORLANDO it is overheated.  Google articles about the average person not being able to afford the average house.

    I would consider taking money off the table (liquidating) some of the properties that are mostly likely to take a hit when that market corrects.  Secondly, i would leverage the properties.  Equity is money that is not working for you. 

  • Indianapolis, IN · Member since 2017 · 21 posts · 3 votes
    9y

    @Account Closed Are you including the UCF area when you say there are currently no good multifamily properties on the market? I am just starting to get acquainted with the Orlando market, so I'm certainly not disagreeing with you. I read that UCF is potentially a good area for multifamily so wondered if you were including that area when you wrote your post.

  • CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y
    @ Peter amico - I don't have RE suggestion for you... just stop by to say your city is absolutely beautiful!!! I am here for a week, staying at hyattt on I drive.... your city is amazing !!!!
  • Realtor · NY · Member since 2016 · 55 posts · 23 votes
    9y

    @Tynessa Franks hi there, what I meant when I said there is no good multifamily is that there is not good multifamily for sale . there is a lot of good ones but asking price doesn't make it a good investment. 

    I love the UCF area and I think its a good market and your investment will be safe with the students tenants. 

  • Indianapolis, IN · Member since 2017 · 21 posts · 3 votes
    9y

    @Account Closed I see what you're saying. Makes sense. Thanks for the feedback.

  • Las Vegas, NV · Member since 2014 · 732 posts · 137 votes
    9y

    There are a few that are into the land game here on this forum. Mark Podolsky is one.

    Good luck

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