Newbie from Fort Myers, Fl

17 Replies

Hello everyone my name is Kiara and I am an absolute newbie at real estate and rental properties. 

To give you a little backround about how I ended up here I can start by saying that,  me and my husband are from NY and decide to move to FL to be closer to family and to run away from the long winters of upstate NY. My husband is an active duty military and for the past year he has been telling me that we should get into real estate, he has a friend that retired early from the military by owning rental properties. In my husband's exact words he said to me "we buy it, we live in it for a few months, we refinance, we rented and then move on to the next one" sounds easy but in my mind there must be more to it so thats how I ended up here. In October we went to see a few houses in Cape Coral, Fort Myers and Lehigh Acres, FL but we did not moved forward with any because we don't know what we are doing when it comes to buying our first rental property and we are afraid to make the wrong decision. So any advice is welcome and we are more than happy to chat with people from this are and people that have experience in doing this. 

Thank You!!! 

@Kiara Lugo

You have found the right website! That is a plan many use but there are a number of additional steps to consider. Who will manage them; need reserves when someone is not paying rent, if you move away, do you have a good manager that can handle all aspects of the homes? What size properties are you focusing on? What are they renting for? What will be your net cashflow after all expenses? You should consider all of these questions when looking at properties.

Let me suggest you continue reading and learning from BP. Also there is a REIA in Ft Myers that you should join. There are a lot of smart people that can help give you good direction in the group.

@Kiara Lugo Welcome to the area! I am also just starting out in the investment side of real estate, but I can give you some insight to the current market in the area. Houses are currently selling for more than their estimated worth, so the strategy that you've described would be risky in this current market because when you go to refinance the home that you've purchased and lived in for a few months, the refinance appraisal is likely to be lower than the original purchase price. If you were to then move forward with the refinance, the difference between the original purchase price and the refinance final value would be money completely lost. With that being said, that doesn't mean that there isn't money to be made in this market scenario. To continue with your strategy, you would have to find an amazing deal on a house that has and actual value that you're comfortable will not drop below the purchase price by the time you're ready to refinance. These houses are possible to find through off-market deals, or by purchasing a "fixer-upper" which you can then force appreciation into. Both will require more work on your part, but will significantly lower the level of risk taken when utilizing the strategy you described. You'll want to read up on the BRRRR strategy which you can find tons of information about on BP. Feel free to message me any time, hope this helps!

Hi Kiara. Welcome to the area and BP site. You mentioned your husband is active military, why not consider VA loan from the start? Instead of buying it than refinancing? The terms of the loan are great and who said you need to purchase a single family? It can be a duplex where you live in one half and rent the other. That would be my first move if I had that advantage. If you need great lender contact for VA loan info in our area I would be happy to provide that. Good luck

@Kiara Lugo

Welcome to the BP family! Good to have you here! Here are some recommendations for you:

Find and connect with other BP members that are in your area: https://www.biggerpockets.com/search/users
Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
Check out BP Podcasts: https://www.biggerpockets.com/podcast

If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select the name of that person which should appear below the comments box. He or she will be notified of being tagged so that the conversation will continue.

Wishing you the best!

Hello Kiara,

Welcome to BiggerPockets. Your husband's friend strategy sounds like the BRRRR (Buy Rehab Rent Refinance Repeat) method, except there is no rehab involved. Since, your husband is active duty you could use a VA loan, and perhaps perform a house hack, or live in flip. Best of luck on your endeavors.

Sincerely, 

You can also look over the foreclosure and tax deed sales that are online. These are CASH sales and do not offer financing. 

@Charles Carillo    Thank You for your advice!!! This are things that we are taking into consideration before we move forward. I am also trying to learn how to run the numbers correctly to make sure it is a good deal so i have been reading allot on this topics for the past few days. I know you mentioned having someone to manage them, would you still advice us to find one even if we just start with a single family or a duplex?             

@Kiara Lugo There are several great calculators available through bigger pockets, those stand as a great start to figuring out what will and will not work as far as your price point. As for property management, whether you plan to utilize it or not, you should always factor it in when calculating your potential monthly income. If the property you're looking at only makes sense if you manage it yourself, then you need to keep looking for a better deal. This will ensure that if you need to resort to a property manager due to unforeseen circumstances, you will not be left with a negative cash flowing property. When you see how much it will cost you per month and how that affects your total cash flow, you can then decide if you want to seek out a property manager or not. There's no need to have one from the start, but you will still want to call around to a few different agencies for price quotes. After that, its up to you to decide if it would be worth it or not.

@Stetson Miller Thank you for all the insight, is very appreciated considering that we do not know the current market in this area. We are looking to use our VA benefits since we already have the Pre approval letter and it is 0 down payment. Our loan officer advised us on the maximum amount of closing costs that we should have. Now the problem with the VA loans is that they have something called "Minimum Property Requirements" that says that the house should be in livable or move in ready conditions. When the VA sends their own appraiser to assess the house something as little as one room not having flooring can make them not let us continue with the buying process on that property. Even though a fixer upper sounds like a good deal and we where considering it for the longest time it is not going to work with a VA loan. That is why we decided to look for new build homes or duplex in that area, we have seen allot of single family homes but not one single new build duplex.

@Kiara Lugo like I said before, it will be very difficult to pick up a house that is currently listed that will positive cash flow. I would start reading more about ways to pick up off market deals if you're set on the VA loan.

@Elena Sweeney Hello Elana, we do already have our approval letter from the VA and a duplex is something that we are definitely considering. We started looking at single family homes because they are easier to find and there are allot on new builds around those areas, on the other hand new build duplex seem to be harder to find. In the time that i have been looking i have only seen a few and they sell very quickly or we found 2 that where in an area that a few people have suggested to stay away from. 

Hello Kara,

Thanks, for your question. I'm just catching up now but I just did a quick search on the MLS and found 20 duplexes built this year (mostly in Cape & Lehigh) listed for sale. Using a VA loan on a new construction duplex can be a very smart idea. Stetson is correct that for newly built construction, the numbers as cash flowing investment may not be great if you were renting out both sides. but since you would be living in the properties you would use different calculations. So I would compare your current housing expenses vs what they would be living in the duplex. Most would find that their personal housing expenses would drop significantly (someone is helping you pay your mortgage). You can then look at how much total cash was needed at closing vs the savings to calculate the ROI.

Instead of a cashout Refi, you would pay for the next property by moving the amount saved into a separate savings account each month. This path takes a bit longer but it's more conservative and it's easier to get started. - Let me know if you have more questions!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here