Getting started in Jacksonville, FL
Las Vegas, NV · Member since 2016 · 15 posts · 3 votes
Hey guys, I'm currently in the military and I'll be moving to JAX, FL in May. I've been on Biggerpockets for a year, lurking & searching, deployments, listening to podcasts, and anaylzing everything on Zillow lol. I'm now ready to launch my Real-Estate business. I'm in the process of getting pre-qualified now for a VA home loan. I want to House-hack to get started. Any leads or advice would be greatly appreciated starting out because you guys are really the only well of knowledge/support group I have. Thanks
See the agents BiggerPockets members work with in Jacksonville, FL.
See agents@Louis Sutton, as a current active duty military member who buys a house at every duty station I will give you my two cents. First, get to know the BAH rates. Not just for you, but for your target audience. When you leave, who do you intend to rent to? Are you looking for two or three E-4s or E-5s to rent your place or do you want an E-7 or O-3 family. Once you determine who you want to rent to after you leave, then you can start to work your numbers. One thing that is really nice about this method is it takes a lot of the emotion out of the deal very early on.
After you identify your target renter, look at the market and where you want to find a property. That will be driven by what commute you are willing to make and what commute you think your tenants will be willing to make. During this step, I would also reach out to folks at the base that you are joining. Ask them where the (insert your desired rank here) are living.
Once you identify your target area, start running the rental comps. Figure out what the average rent price is per bedroom, or square foot, to understand what sailors in the area are paying for housing. Keep in mind that there will be variables which will affect this number, i.e.: garage, yard, pool, etc... You can also reach out to a property manager for this step. I would avoid asking your real estate agent as they can be conflicted. Reach out to a property manager that you get recommended from BP and ask them how much you can assume to get in rent.
Now that you have identified the the best area to purchase, and rent comps in that particular area, you can work your numbers backward to figure out what you can spend in order to get into that area and still maintain your goals on the backside. There are things that you will want to consider when buying even though they won't be a factor until you leave. For example, you need to factor in a monthly property management fee. Even if you can't possibly imagine needing a PM, plan for it. It will cost you 8-10% of that monthly rent. Capital expenses are a big one that people usually forget. Plan for 10%. Does Jacksonville require an owner to pay any utilities? If so, factor that in.
Now that you have identified your target renter, target area, figured out what the rental comps will be, and worked your numbers backward to figure out what you can pay, you can start shopping for properties in that price range. What you need to remember, and I know this from experience, is that this should not be emotional. Many folks move to an area and want the perfect home in the perfect neighborhood etc... If this is truly an investment strategy for you, than there is no emotion. The numbers are the numbers. It has to work. You make money when you buy the property not when you rent it out, or when you sell it!
Good luck. Feel free to reach out for any further discussion.
@Louis Sutton I'll go ahead and welcome you to Jax! It's a great market with a lot of opportunity. As you continue the process, let me know if I can help.
@David Dawkins Thanks David! I was wondering if you knew of some good realtors I could get in touch with. I have a list of area codes people have recommended: 32256, 32221, 32210, 32218, 32207, 32258, 32246, 32244. I really don't know where to go from here because I feel as though I'm so new, and not in JAX, realtors might not work with me.
Thanks David! I was wondering if you knew of some good realtors I could get in touch with. I have a list of area codes people have recommended: 32256, 32221, 32210, 32218, 32207, 32258, 32246, 32244. I really don't know where to go from here because I feel as though I'm so new, and not in JAX, realtors might not work with me.
@Louis Sutton don't forget that your VA loan can be used to by a duplex or triplex type of property. I am a former Marine and I wish more of us knew about this feature. So if you can BAH for living off base, by a duplex, rent our one side, you will be in a very good position! I still have my property in Jacksonville and I know some realtors if you would like to get in touch with any. Private message me with any questions on it. Thanks!
Louis, where will you be based? Those are pretty good zips for investment but if you are based at Mayport then most of them will be pretty horrid commutes if that matters. NAS Jax on the other hand is much more central and many of those zips are very nearby.
Much will also depend on your price range and your tolerance for type of living space/amenities as those zips vary quite a bit as well.
@Andrew Postell Thanks Andrew!
@Maxwell Lee I'll be at NAS Jax. The zip code in particular was 32201. I really don't know anything about the area. This zip code was closest to base. I'm looking for a mutlifamily to invest in. Any advice would be greatly appreciated.
@Louis Sutton, as a current active duty military member who buys a house at every duty station I will give you my two cents. First, get to know the BAH rates. Not just for you, but for your target audience. When you leave, who do you intend to rent to? Are you looking for two or three E-4s or E-5s to rent your place or do you want an E-7 or O-3 family. Once you determine who you want to rent to after you leave, then you can start to work your numbers. One thing that is really nice about this method is it takes a lot of the emotion out of the deal very early on.
After you identify your target renter, look at the market and where you want to find a property. That will be driven by what commute you are willing to make and what commute you think your tenants will be willing to make. During this step, I would also reach out to folks at the base that you are joining. Ask them where the (insert your desired rank here) are living.
Once you identify your target area, start running the rental comps. Figure out what the average rent price is per bedroom, or square foot, to understand what sailors in the area are paying for housing. Keep in mind that there will be variables which will affect this number, i.e.: garage, yard, pool, etc... You can also reach out to a property manager for this step. I would avoid asking your real estate agent as they can be conflicted. Reach out to a property manager that you get recommended from BP and ask them how much you can assume to get in rent.
Now that you have identified the the best area to purchase, and rent comps in that particular area, you can work your numbers backward to figure out what you can spend in order to get into that area and still maintain your goals on the backside. There are things that you will want to consider when buying even though they won't be a factor until you leave. For example, you need to factor in a monthly property management fee. Even if you can't possibly imagine needing a PM, plan for it. It will cost you 8-10% of that monthly rent. Capital expenses are a big one that people usually forget. Plan for 10%. Does Jacksonville require an owner to pay any utilities? If so, factor that in.
Now that you have identified your target renter, target area, figured out what the rental comps will be, and worked your numbers backward to figure out what you can pay, you can start shopping for properties in that price range. What you need to remember, and I know this from experience, is that this should not be emotional. Many folks move to an area and want the perfect home in the perfect neighborhood etc... If this is truly an investment strategy for you, than there is no emotion. The numbers are the numbers. It has to work. You make money when you buy the property not when you rent it out, or when you sell it!
Good luck. Feel free to reach out for any further discussion.
Wow, Kevin's post is very detailed and informative. Great stuff.
Well that's good as most of the zips you listed would be decently accessible. I'd suggest to stick to the west side of the river though if you're gonna target fellow military as tenants. Still don't know your price range but Lakeshore, Cedar Hills, Hyde Park, and just the general Westside will be the cheapest. Would want to be cautious and check out the block at all times of day cause there are some less desirable pockets. I also don't know where exactly the multifams are though I've come across a handful in these areas. The higher priced, desirable neighborhood would be Riverside. Tons of multifam and the single guys at the base would probably be most attracted to it. A compromise would be Murray Hill...not trendy like Riverside but pretty decent and plenty of MFH options. I see a quadplex each week for sale in the 150-200k range from wholesalers or MLS and would rent for around $2-2.4k if you were not living there.
Anyway, good luck and happy to answer any other questions.
@Kevin Hunter I didn't even think about the specific type of tenants. Military would be a better target audience to go after. Do you think it would be wise to pay a mortgage that takes my enitre BAH or try to get one that's a bit cheaper. Thank you for the very detailed over view, and I wasn't looking at it from the proper angle. I was just going to put an ad out and hope someone rents. Never thought about how marketing to a particular group would help.
@Maxwell Lee For price range, I'm not sure how I should go about it. I don't know if I should get a mortgage that would eclipse my whole BAH or get one a bit under it. To be honest, I may just bite the bullet on this and get a home I know will be a great investment. I looked at Riverside and I already see great homes that would be GREAT as investment properties. Is there anyway, I could ask for help on finding the quadplex that you see? Still don't have a realtor that can access them for me just yet.
@Louis Sutton, I think you should look at this from a different angle. I don't know your rank, therefore I don't know your BAH. However, that is not the question. The question is what tenant group do you intend to target? Then, when you have identified that target tenant, do you want to get a mortgage for their entire BAH. The answer, for me, will always be no. The reason for that is because the mortgage PITI is only part of the cost of owning a rental property.
I think that most military members who rent are willing to utilize their whole, or most, of their BAH on housing. Therefore, I would be willing to get a property, where the rent will cover my mortgage PITI, all estimated repair costs, CAPEX, necessary utilities, PM fees, vacancy , and ultimately leave me with a certain amount of cash flow per month.
I will provide an example of what I mean. BAH rates are below for four groups of service members, all with dependents in the zip code 32256:
E-6(with dependents) $1680
E-7(with dependents) $1695
O-3(with dependents) $1716
O-4(with dependents) $1890
Ok, so now you know your rent payment. As I mentioned earlier, most service members will be willing to pay their entire BAH or most of it on housing. For this example, I will utilize a Navy Lieutenant with dependents. I now know the rent number, $1716 per month. For ease of calculation, I will use $1650 for what that Lieutenant would be willing to pay for rent. That gives them a little bit of money left over for utilities. Obviously, that won't cover all of their utilities, but most folks I have found, don't consider the utilities when they are determining their acceptable rent price.
Now you have to work backward to calculate the price of an investment property.
Rent received: $1650
Repairs: -$165
CAPEX: -$165
Vacancy: -$165
Property Management: -$165
Landscaping: -$50
Sewer:-$50
Insurance:-$100
Total Expenses: -$860
Now that you know how much your monthly expenses will be, you can figure out what you can pay for a house and still make a decent cash flow. What do you want your monthly cash flow to be? For this example I will use $100 per month. You now know that you need to get a mortgage that will cost you $690 ($1650 - all expenses ($860) - the cash flow you desire ($100) per month for the principal, interest, and taxes. Remember I already included insurance above.
The taxes for Jacksonville County are 1.29 of the assessed value. I will assume that the assessed value will be the same as the purchase price. I know this is not always the case but this is an assumption. I will also assume that you will get a mortgage rate of 4%. Again an assumption.
All of these things combined tell me that the target mortgage you are looking for will be $115,000 or less. That would put your principal, interest, and tax at $690.70.
Now the type of loan you are going to use will get you to that price. If you are using the VA loan with no money down, you can buy a house for $115,000. IF you are going to use an FHA loan, you can buy a house for $119,500. You will put a down payment $4200 toward the purchase. If you are going to use a traditional loan with 10% down, then you get buy a house for $128,000. That will require a down payment of $12800 and make your loan price $115,200.
I hope this helps. Let me know if I can provide anything else.
@Louis Sutton I can help you out running some searches. I'll PM you some questions later that will help me narrow your criteria.
@Louis Sutton I can't seem to find the wholesale deal I saw from a week or two ago. Here is one currently listed on MLS though. Just copying the listing details. It's not the best part of the neighborhood but I think it could work if you offer below list price. Anyway, see if you can find an agent to work with you...if for some reason things don't pan out and you are desperate my wife and I can always help you. We don't actively seek new clients but I'm always willing to help folks who need it.
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You can also check out 2636 POST ST, JACKSONVILLE, FLORIDA 32204
@Kevin Hunter Kudos for taking the time to give a thorough rundown for a future RE mogul. Your a good man.
Jacksonville is a crime ridden hell on earth...just had a shooting involving a 13 & a 16 year old...I would advise waiting 6-12 months before you do anything so you can see what you are up against and hope you get posted elsewhere...just my 2 cents worth !
I'm so embarrassed guys...... I actually read my orders wrong and I'm not going to Florida, I'm going to Washington. Thank you all for your help and guidance, and I see asking for help on BiggerPockets is the right method to succeed.
Before you go listening to gossip, . . . every city has crime. So no one was shot in Chicago, ATL, NYC, Washington, DC, San Diego, Austin (Texas), or Meridian, MS?
You mentioned military transfer to CIV-Div. Make sure you know what the employment market is. While you are fixing your home, you must eat and pay your bills (Car, electric, etc). I retired here in 2010. I could have gone anywhere - Puerto Rico, Germany, Australia, and California were my choices. I bought my home in 2003 before getting out and stayed here in Jacksonville. Like many things, the real estate value went up and has gone down (2007 - 2008). Luckily it was floating back up, but with a new government in place, no one knows anything. It is all speculation. It took a while for VA pension to kick in for me. Go slow. I waited 8 months with almost nothing in a pension and finalized a divorce. Here is the bottom - line: Nothing starts immediately. Your VA Certificate takes time. APPLY TODAY. Some people here may not know the struggle you will face.
I would suggest looking at the Real Estate Investment groups first. Find them online (Meetup.com). Follow a few folks now (if someone volunteers to help you or advise . . . TAKE IT). Establish your goals, write down, and answer the tough questions - Funding, Paperwork in hand, attorney and title company selected? Name for your business? You will soon realize that this is no longer a game or just chatter.
I travelled on board a ship heading to Somalia using a home study course in real estate to get me ready. I could not pull the trigger on making a final decision to jump into the market. Do not wait!!! You are wasting time if you do nothing. Bigger Pockets has more information and resources so you are on the right track.
A diver knows to follow the bubbles if they get confused on which way is up in an underwater cavern, or sunken vessel. Experience, patience and diligence will be your lessons. Partner with someone. Read everything and get the education. LAST THING - DO NOT buy the $1,000 programs. Many of us on here have the programs. Use the search menu and ask about them, and any serious decisions before you take action. Best wishes.
Doc
I own houses in the 32210 and 32207 zip codes. I am currently living in the 2/1 32207 house and fixing it up and I am currently renting out my 3/2 in 32210. The areas differ a lot with in the same zip codes, so be aware of that fact. 32207 is a bit central to the area where as 32210 is not as central to the large majority of employment centers.
Just some thoughts. Good Luck. Let me know if I can help.
Louis give me your email. I'll send some quad,tri and dup listings from those zips.