Preferred areas in So. Florida for investing in flips?

Question

Hello Floridians!

So a brief introduction: I'm new to Florida, recently moved to Aventura from Massachusetts. I'm also new to real estate investing since I didn't want to venture into this topic until after I had made my move.

I'm currently doing my due diligence, including researching, networking, and lining up my finances. almost finished with the book by J. Scott on flipping houses, then I'll move onto the Calculating Rehab book, supplemented by lots of webinars, podcasts, and communicating with locals (hopefully!)

Anyways, I'm interested how some of you decide where is a good location for investing in flips, and where would be good for rentals?

My current goals are to begin with my first flip in early 2016, eventually getting into buy & hold real estate as well, since my lease is up in 11 months, I'll probably use my VA loan and look into house-hacking next year as well.

I'm thinking of looking somewhere in the range of 35k-60k houses and hopefully making profits of 10-20k (not positive how realistic this goal is yet until I narrow down to a particular zip code)

After that will be the fun task of searching for a lender, but I won't get into that too deeply as my first step is choosing a farm area (if that's even necessary here) My girlfriend and I have been considering Hollywood, based on how it's getting more and more attractions in that city (margarita-ville for example) but I'd love to get some advice from the experts who know this area much better than I!

I apologize for the long post, I honestly meant for it to be a bit shorter than this, but, if you've read this far, I truly appreciate any info and time given for my question.

Thank you!

Joshua Pavao.

Steven Kopstein · Answer

@Joshua Pavao The comment about Real Estate Agents being bad is unfair to the good ones out there (and there are many).  You might be well served by working with someone you like and trust.  You should be able to figure that out pretty quickly if you're an aware and sensible person.  The law precludes agents from "steering" you or anyone based on fair housing factors like race, religion, nationality etc..  There are national and local fair housing laws that you'll want to be familiar with anyway if you're planning on being a landlord.

Jon Wanberg · Answer

Joshua, That is not what I was suggesting. Call me and I will explain.

352-978-8486

Joshua Pavao · Answer

just did some researching, a VA refinance has to be a VA loan to a refi. VA loan so that wouldn't work. Is a down payment usually required when refinancing through a regular lender?

Joshua Pavao · Answer

@Jon Wanberg just trying to see what angle you're coming from here with your suggestion..

After I do some flips (which I intend to start VERY soon!) and I have, say 30-50k of profits or savings that I can now invest into a multi-family. You're recommending I use a hard money lender, rehab it (if need be), at the very least update the entire thing, refinance with a 30yr mortgage?

So basically do a BRRR strategy? I actually like  that idea because it would keep me from having to invest all of my profits (subtracting whatever I need to pay for fees with the HM lender) into the multi-family and can even continue with flipping.

Really could be a good strategy but I also don't know enough information about refinancing with a VA loan, so something I'll have to do some due diligence on. I've have a lot of bad experience the past 6 years with the so-called "benefits" I was supposedly eligible for from my military service.

Thanks for adding in some tips, for some reason I never even considered a BRRR on a multi, but if I can get financing through a VA to go smoothly than that would be great.

Jon Wanberg · Answer

If you will have 30 to 50 after buying your "house hacking" deal, I would consider getting a hard money person to help with reno costs or even get a slightly nicer house for the flip.

I think it was Josh that said, "I like flipping boring houses"... That is VERY good advice. Anything weird (especially floor plan) can totally screw you because it will look very good when you are looking at comps, but will bring in much less in sale price than it "should" on paper.

As a flipper, your job is to alleviate anything strange or ugly and sell it ready to go for the new buyer. So if you can make a slight change to a floor plan (open up a kitchen, or add a closet to an office to turn a 2 bedroom into a 3), that is a good opportunity. But weird floor plans, odd lots, dirt roads, ect are difficult to cure. Be careful there.

Good luck.

Jon

Joshua Pavao · Answer

@Jon Wanberg thanks for the tips, when looking at a multi-family I'll be looking in the range more like 150-250, I really wouldn't want to get a multi-family in a low income area and have to live in it and manage those tenants everyday so I'll aim for a nicer one for sure.

For the flips, considering it's my first and I'll probably only have 30-40k (more like 30) of my own cash to invest so I'll definitely be on the more conservative side in terms of what kind of work is needed, what you listed for work is exactly how I'd like to start, thanks for the tips!

Pavlos Kasselouris · Answer

I was referring to Denise where she says that agents are claiming to know the areas but in reality they dont know them not so good. A REA cannot stire you to areas. So some are more open to talk about an area more than others, but generally speaking you will have to do your own due diligence on that matter.

Jon Wanberg · Answer

You asked several good questions in your post.

For the house hacking deal, I would look for a slightly higher priced home because at 30-50 it is not likely to be financable with a VA loan.

You should be able to make 10-20K per deal after all expenses MINIMUM or it isn't a deal. I believe those numbers are very realistic.

For flips, look for houses that need carpet, paint, appliances, granite countertops and AC units...sometimes a roof. Don't go into anything with much more than that needed on your first couple deals. Also, bad roof, AC, or out dated electrical will make a house difficult to finance.

I am a Realtor and flip investor. We just started buying a few buy and hold rentals.

Call me if you get stuck. I'm happy to help (with advice, I am no where near your area).

Jon Wanberg

Joshua Pavao · Answer

@Pavlos Kasselouris care to expand on that? Whaat does an agent being bound by the law and careful with neighborhoods have to do with deciding on an area to flip?

Pavlos Kasselouris · Answer

Real estate agents are bound by the law, and have to be very careful about neighborhoods. After a while of previewing properties you will get a good feel anyway.