Pensacola Investors question

8 Replies

Question for you all, is anyone familiar with the Sanders Beach area in Pensacola? I've been getting mixed opinions about it being a good/bad area to invest. Thoughts?

@Connor Deneen What type of investing are you looking to do in the area?  Rentals? Flips?

Sanders Beach is essentially Southwest-Downtown Pensacola (Basically everything south of Main St., from The Oar House to Joe Patties  -- If you're from Milton you're probably familiar).  As you might know with DT Pensacola, there are many pockets of good and bad areas.  You can find retail homes for well over the median sale price, but also find homes selling for $40k as close as one street over.  If you haven't done so already, I would suggest driving the area to get a better feel.  You can drive the entire neighborhood in a very short period of time.

@Benjamin Ervin

Thanks for the reply Ben, I've been over and looked at the area a few times. It looks to me that the "nicer" area is closer to the water, but my real question is what is the best way to know whether or not the area has to potential to take off like East Hill has over the past few years.

Yes the further south you go, the nicer the properties are, generally speaking. 

As far as determining whether or not the market will rise in that area, I am not the one to make that call.  My approach to real estate investing is to raise capital through flips to acquire cashflowing rentals.  At this point, all my focus is on flips.  That being said, I would have a tough time banking on the type of growth we've seen in the East Hill area on any investment property.  I would be focused on ensuring the numbers work in the current market with no expectation of tremendous appreciation - but again, that isn't my area of focus and I will be investing more conservatively, in general. 

Maybe someone else from the area can chime in to provide further opinion. 

@Benjamin Ervin

You make a really good point, buying for what it "might be worth one day" is a heck of a lot riskier than buying for what you know you can cash flow or get on a flip right now.

Thanks Ben

Definitely some great points by Ben.  I noticed in your profile that you've been investing in stocks for a while.  As you probably know from that world, those who try to guess the market in stocks go broke...day traders, etc.  Those who look for strong, growing companies, and buy consistently over time (dollar cost averaging) usually do very well.  They do ESPECIALLY well when they look for VALUE (underpriced due to emotion or buying during a correction when scared money is fleeing).

It's not all that different with investing in real estate.  Typically those who pay RETAIL, and overleverage, banking on strong appreciation or a "hot area"...will fall flat and go broke.  Those who simply look for value properties (motivated sellers selling at below market value) with strong cash flow (not over-leveraging or getting in too high of a price range), will typically do very well over time.  If you get lucky and hit the right neighborhood with rapid appreciation, consider it a bonus.  But don't make it your primary factor for buying.  Best of luck to you!

@Matt Robinson

Matt, thanks! The analogy to the stock market makes complete sense to me. Thanks to both of you, I appreciate your help!

Connor

Hey Connor,

I see you're Navy as well (I'm assuming you're an SNA like myself). I just got here to PNS and am looking to buy a house in the next 6 months near Milton/Pace when I head over there for Primary. 

As for your original question, I think anything near downtown is going to appreciate pretty well. Prices have been steadily increasing in the area and demand for ANYTHING near Palafox is getting pretty insane. There are also a ton of new apartments getting built which may lower the overall rent price level, but may also increase property value. With that being said I'm really not in the mindset of looking at investments for appreciation, but rather for cash flow. For instance most of my stock portfolio consists of high dividend yield companies. 

Let me know if you're ever near DT PNS and I'd love to grab a beer with you an discuss the RE market here. 

Awesome to see the SNA's jumping on here and investing in real estate early.  I wish I did when I was going through flight school.  

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.