This is my first post to bigger pockets as I am a new real estate investor. I am in the Marine Corps and will be stationed in Pensacola, FL to begin flight school and my real estate investing career.
I have been doing plenty of reading and research in the area. Since I have a couple months until I can start the real search for a property, I am using my time practicing analyzing properties as well as learning as much as I can about the area. In analyzing properties to determine if they will cash flow or not, I feel though that the margin is always razor thin ($20-30). I was wondering if I anyone could offer some advice. Maybe I using bad numbers in my calculations, or am I in need of some better deal finding skills.
I am looking at 3BR 2Bath places priced around $100,000-120,000. I have found that the average rent is usually just around $1000 for a 3 bedroom house, barely passing at time the 1% test. Any investors in the area run into the same issue?
Thank you for your time! Excited to begin this journey.
Hey @Ryan Heinz ! Welcome!
I'm not that smart on the Pensacola market just yet, so I'll leave those answers to someone else. But let me throw some alternatives at ya if you want to look at additional options:
- Short Term Rentals - Folks are doing well in the Destin/FWB markets (hour from Pcola) buying houses and condos. This may be a better model for the area. Happy to help with those over here if that's something you're interested in.
- Flips/BRRRRs - You can flip properties just about anywhere. I see a LOT of Pcola homes being sold be wholesalers as flips. So I would think that model is working there as well. Happy to hook you up with all the wholesaler lists as well, just say the word.
- Out of State / Area - I understand the heartburn on this, but people do it all the time very successfully. I didn't for my first multi-families, but now I would.
- House Hack - Not sure what your family situation is or whether there are many small multis in Pcola, but one options is buying a 2-4 unit and living in one unit. Great for single guys (I have friends doing this and living for free). You can also use VA loan to do zero down.
From one active duty bubba to another, let me know how I can help.
I am also a Marine flight student. I PCSed from Quantico last October 2018. I've been looking for multifamily only in order to scale and get some experience in that realm. But 1% rule can certainly be met depending on the area, and house hacking a duplex or single family home with some buddies would be a good way to start.
DM me for some more info or questions if youd like. I'd be happy to share what I've learned and set you up with an investor friendly agent
My son is a flight student in the area and he owns a 3/2 in Milton that he Airbnb's . Started out with two rooms and then whole house.
We also have a house in Milton, it's a 3/1 and we rent it to 3 flight students (they rotate in/out). That house rents for $300 a room I believe and we discount one person to "manage it". We keep the utilities in our name and then get reimbursed. It will become a long term rental and will probably rent for $850-$900 (1950's era house)
Look into this military spouse's long term investment strategy with her Naval pilot husband. Useful if you decide to house hack to start out, self manage and grow a good portfolio of properties over the years at each duty station.
I'm from Pensacola and I'd agree with your razor-thin assessment. It is difficult to find properties right now. As far as Pensacola specifically, the downtown area is slowly expanding west, so you may want to start your search in 32502 or 32507. Good luck!
@Natalie I think you meant to tag @Tim Kelly. @Jay Helms runs the W2 Capitalist (also a great guy).
@Ryan, I would be happy to help in anyway, and would gladly make the introduction for you to Tim, I run a similar network for military real estate investors, and commend you on looking into this so early in your career!
Welcome to the panhandle! You'll find it hard pressed to find properties near/around downtown Pensacola that fit the 1% rule-of-thumb as prescribed on BBP; the downtown sector and nearby neighborhoods are expanding rapidly, and values with it. Keep in mind this area has its own rental niche that CAN be lucrative...see below. Properties near Pensacola NAS (West Pensacola, Perdido Key) and Whiting Field (Pace, Milton) will be more in line with the numbers you'd expect if you intend to buy-hold-rent with "liveable" 3/2's in that <$150k range. As mentioned by some other members, you can lease out individual rooms to school attendees to mitigate vacancy, OR employ a "house manager" under one lease; there's also the instructors/permanent party of these bases that choose to rent. Rents tend to run ~ $1/sqft.
Conversely, the STR scene feeds off the other facet of the greater Pensacola rental market: tourism. Depending on where you intend to base your own residence, you might find a good opportunity in purchasing a SFH with a MIL-suite, out-building (shed/workshop), or conversion of a garage. If you want really want to get your hands dirty, you can look to make these additions to an existing property, thereby increasing the ARV to future investors; you'll pay a premium in acquisition ($180-$220/sqft) for rent-ready properties, but can typically recoup those funds and cash flow equal-or-greater values in lesser time.
You'll also find a good many investment groups around the area (FWB, Niceville, P.I.G., etc.) if you're looking to get plugged in with the investment community - as @Charlie Cameron mentioned, there are quite a few wholesalers in the area that would be a good source of deals if you are looking to put a little more work into your properties.
I host a similar group that meets on the 2nd Monday of the month at Perfect Plain near downtown - we'd love to have you out!
Originally posted by @Natalie Kolodij :
You want to reach out to @Jay Helms - He runs Active Duty Passive income. An investor group for active military, awesome group, awesome guy, also based in Pensacola.
Thanks for the mention BUT the guys who run ADPI are @Tim Kelly and @Eric Upchurch
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