Impossible Cash Flow in FL?

Question

I've spent countless time looking to purchase a STR property in Florida and I can't seem to find anything that fits the numbers to get any sort of cash flow with 10-20% down! Is it just me, or is real estate prices in FL too high to turn any sort of positive cash flow while projecting conservatively?

John Underwood · Answer

I really depends on the specific property and location.

Get a good enough deal and you can cash flow.

Or make your property so interested people are lined up to book it at top dollar.

Finding turnkey will be harder to cashflow than finding a distressed property or motivated seller and making it into a top producing STR.

Andrew Steffens · Answer

Where have you been looking? I see you pinned FTL - South Florida is tough.  Orlando is near impossible.  I am not too sure on some of the other areas but there are positive cashflow opportunities in the Tampa area.  I just sold one last week for $570k fully furnished with 3 years of verified income over $140k.

Mike Grudzien · Answer

Andrew makes a good point: there are areas that are viable.  But, overall, the headwinds of interest rates and market saturation currently affect all markets.

Jorge Vazquez · Answer

Not just you. Most Florida STR deals won’t cash flow with 10–20% down if you’re shopping the obvious markets and running conservative numbers. Fort Lauderdale, Miami, even parts of Tampa are brutal right now. That said, I’m doing very well with two STRs in Ybor one bought around 150k and another all in around 180k. They’re booked pretty much year-round. The key was buying in the “high end of the low end” neighborhoods that are actively gentrifying. Guests care more about the experience than the zip code now. Walkability, vibe, unique stays beat beachfront every time. If you’re only underwriting prime locations, the numbers usually won’t work. If you zoom out and follow where people are moving before prices fully reflect it, the math starts to behave again.

Andrew Steffens · Answer

The example I cited is non HOA non flood zone - I avoid those 95% of the time for the reasons you outlined, but sometimes I have specific requests from a non ROI motivated investors seeking waterfront and/or condo so they cannot always be totally avoided, but if you are seeking to avoid them as I recommend there is plenty of opportunity if you know where to look!

Chris Watson · Answer

So remember there are several pieces of the puzzle and the first is pencil and paper.

Many people write off a property as not cashflowing at this step. The problem is they are asking the wrong question and therefore doing the wrong math.  Do not start with "will this cashflow" change the question to "at what price does this property get the ROI I want?" Now make the offer even if it might be insulting.  After 20 different offers you will probably get a property.  I have closed on two in FL recently that get the ROI I want, so it is possible. I am actually about to have my realtor reach back to offers that were rejected over a month ago and ask if the sellers would reconsider my offers.

Ricardo Hidalgo · Answer

Need to find value add or builders that need to sell their new construction. I would recommend 20% down and you can see cashflow. Plus self managing increases overall revenue and limits rental fees.

Chris Seveney · Answer

In today's interest rate environment, you will not find anything that cash flow flows at 10% down. Most quality properties will require at least 25% down to break even. this is why we are now moving back into the world of exceptional management is where money is made in real estate and not buy government spending which equates to easy appreciation

Kenneth Garrett · Answer

I disagree that you can’t find properties to cash flow.  I’m in the Pensacola and Destin area.  This may require to mix up strategies a bit and put in some rehab, but you can get properties to work.  Maybe we should clarify cash flow first.

I bought last year and rehabbed the property and use it as a hybrid of MTR and STR.  Now are you saying properties don’t cash flow or you want a minimum of $$$ cash flow.  You can still BRRRR properties, but you need to stay away from the crazy high end HOA fees.  As in all markets you need to buy right.

I don’t buy condo’s.  I stick to single family homes.  Typically 3/2.

Impossible Cash Flow in FL?

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