Hello BP Community!!
I am wondering if there's anyone out there that has experience with the New Construction Duplex model in SW Florida. I have been analyzing properties in that market and it seems appealing. Any thoughts??
The base models are offered at $300,000 and require earnest money to secure the lot of your choice, with the 20% down payment due upon closing once construction is complete. The models are 3 bed, 2 bath with a 1.5 car garage and rent for approximately $1300/unit. Property tax and insurance total around $525/month which includes the cost to maintain the septic system. Net cash flow is approximately $575 assuming a 9% property management fee. I feel the play here is the potential for appreciation over the next 3-7 years.
Thanks for your time spend reading my post!
Hi @Tim Stuart ,
You're absolutely correct regarding the appreciation potential. The key here is picking a location that will be conducive to that appreciation model, as well as rental demand. Key things to look for are proximity to major roads for lower commute times, restaurants, and shopping. This will ensure that you're able to keep low vacancy rates, while still being able to easily demand up to that $1,300 monthly mark.
@Stetson Miller thanks for your response I appreciate your feedback!
@Tim Stuart - Not sure what towns you are looking at, but you may also want to check if the city is planning on bringing sewer into the area as this will be a future costs for you also. Cape Coral is been expanding it's sewer system for a while now.
Also you will want to walk through a completed home that the company has built to see the quality of work and materials being used. Not all new construction is good construction.
@Stetson Miller has some very valid points also on location for future appreciation.
@Carl Hebert Thanks Carl! I appreciate your wisdom: Not all new construction is good construction. That is a very true statement...
If you don't mind sharing, where are you currently investing and are you happy with your returns?
We were considering purchasing a duplex (new construction)in December but instead purchased two duplex next to each other that were built in the 80’s. We were able to do a minor rehab on 2 of the units and we are getting $1300 for all four units. We purchased them cash and did a cash out refinance recently and have reinvested the funds. Even with 25% in the deal we cash flow at 10% cash on cash. I definitely think there are ways to invest wisely in this area.
@Tim Stuart - I bought a duplex in Cape Coral on a canal, we stay in one side and rent out the other. All my other properties are in Lewiston and Auburn, Maine. The duplex was our reward lol.
@Tammy Skeath Stoked to hear that BRRRR success story! What was the first step in building your BRRRR team (assuming your double duplex purchase was out of California)?
Thanks for your response!
@Carl Hebert What a house hack win! Invest in the cold climates and live in the sun.
@Tim Stuart the double duplex was in Cape Coral FL. But I live in Redondo Beach CA. We have a quad here in Southern California too. First step in the modified BRRRR was finding the deal. Like I mentioned since the two duplex were on the market side by side, I was able to get a discount by offering to buy both and then I brought the price down lower by purchasing them all cash.
We are looking at this type of investment in Punta Gorda, currently researching builders in that area- do you mind me asking what builders you are looking into?
I was introduced to Rob and Deb at Whitestone developers DM me and I can send you their contact info if you’d like.
Thanks for the info @Tammy Skeath were those properties on city water/sewer or well and septic?
@Tim Stuart city water/sewer. They are in the SW cape.
@Tim Stuart Cape Coral also has pretty good Airbnb potential if you're interested in that. My mom has a house that rented out 26 out of the last 31 days down there bringing in over 4500 in cash flow. She has a 2/3 SFR w a pool and it's on the canal. Their mortgage is only about 1200. Crazy how cheap that market is for SW Florida near water.
@Michael A DeAngelo Thanks for the perspective. That sounds like a great market for STR. I believe the current state of affairs would keep us from going down That road in the near future, but the potential is definitely there for a great return. Thanks again for your response!
@Carl Hebert Congrats! What are you getting for rent for the other side? I'm considering house hacking a duplex on the canal as well but its freshwater and the gators/snakes have me questioning that. Have you experienced any of that?
@Chris Virgil-Stone - We get 1200 for the other side. It is on a freshwater canal also. Have not seen a gator yet, a couple of snakes crossing the canal by the duplex but none while in the kayaks. Mostly see birds, fish and lizards. Really enjoy the area.
Thanks @Carl Hebert !