Hi- I'm just getting started with building my real estate portfolio and am seriously considering Cape Coral Florida as a starting point (new construction). The pro formas I have looked at from my turnkey provider for single family and duplexes look good both for cash flow and appreciation...and I am wondering if anyone with experience in this market has any feedback? Thanks:)
@Kellianne Fedio Hi! Cape Coral is a great market! I am a property manager and work with a builder who is building new construction homes for my investors and then I am managing these properties for them. They’re great properties and I have a waiting list of tenants waiting!
Hi @Kellianne Fedio ,
Cape Coral is a great city for investments, especially if you're looking at new construction with all of the building and expansion within the city. Appreciation is very strong in the area, as well as rental demand. I would be happy to go over those pro formas with you to check validity of the numbers, just send me a message!
Hi @Kellianne Fedio I agree with @Adam Bartomeo , I would also suggest you walk through some of the new construction before buying, when I went to buy last fall the majority of the new construction on the market was poorly done.
Ended up with an older duplex that was in great shape and built very well.
There was an article in the WSJ today about the highest risk cities for flooding and Cape Coral was on the list! Just make sure to factor the cost flood insurance into your numbers.
I live in Cape Coral. It's a great area. Strong rental market.
I'm paying $400 a year for flood insurance, but there are a lot of areas that don't require it. I can send you more info if you'd like.
New construction walkthroughs is a good idea as others have mentioned.
Feel free to reach out to me if you have questions.
New construction is a great way to go especially for distance owners. All new and theoretically hassle-free at least for a few years.
Danny's right, it's wise to check the flood zone. If you're paying cash then flood insurance isn't required, but if you have a mortgage the lender will require that you have flood insurance if you're in a flood zone. During the purchase process the title company will order a survey and elevation certificate, and that will tell you the elevation of the property, in feet. Where that elevation falls compared to the area's base flood elevation (BFE - as determined by FEMA mapping) will be a factor in your flood insurance cost.
I'm working with a buyer who's purchasing several new construction duplexes in Cape Coral and as an example, one of them has an elevation of 8.5' and the BFE for the area is 7'. He's been quoted $748/year for flood insurance for that particular duplex.
I hope that helps!
Thanks so much @Peter Davis ...very helpful info!
I’m interested in what you’re building. I have an investor doing a 1031 exchange and needs to identify a replacement property soon. I sent you a connection request.
Adding my thoughts here as well - I just moved back to Cape Coral (grew up here) after being in Denver for eleven years, purely really for the real estate market and relative affordability compared with most of the rest of the country. I'm doing what I believe to be the first and more affordable net-zero renovation home in the area through my company Attainable Home, and all the numbers worked not only for that (energy efficiency measures + solar) but also as a pure rental/BRRRR/investment or however you'd like to slice it depending on investor-type goals. Overall it's a high growth area and I would bet it'll be even moreso with Covid and people wanting more rural, open, and larger lots/houses. It's also probably some of the cheapest waterfront you can find. Not really aiming to sell anything here and I have no ulterior motive, just listing reasons why I zoned in on it to start with. The area also has an influx of snowbirds and people from Europe as well in the winter, at least in non-pandemic times.
Agree on all the comments about flood insurance, made sure my house here was outside the flood zone. Some houses ended up having a higher cost for flood insurance than homeowner's insurance when I quoted some.
A very serious issue that most people are unaware of or skip is sea level rise. It is real, and it is rising. As a failsafe I used the NOAA Sea Level Rise Viewer -
I used different resources to check the current sea level rise rate per year, then 4x'd it, then pushed out that rise for 50 years, and made sure that my property was still above water at that level. Ridiculous? Maybe, maybe not. I can tell you that the other day it rained a bunch and the canals and Chattahoochee River was literally almost overflowing over the sea walls on some waterfront property. What will that look like in 20-30 years? There are many other issues that come with this, such as road access to your property and lack of sewer drainage ability, etc.
Also you need other things to drive down insurance like a wind mitigation inspections, 4-point inspection, and maybe one or two others specific to the area. I'm finding hurricane shutters or impact windows coming into the mix as well which can really add up.
Hi Erin, When the coast is clearer Covid-wise, I'd love to see your home in Cape Coral and see the green improvements, that's great. I was a LEED Green Associate back in the day when I lived in Los Angeles. I'm glad to see you're working on that here in SW Florida.
I'm flipping in Cape Coral and our forecast is for continued growth and high demand from northerners fleeing high tax states. Most of our end buyers are from midwest (Illinois in particular). My primary residence is in X flood zone and it is waterfront property (flood is not required and is $400 if you opt for the extra coverage). You can find homes that are not in flood zones. Rental demand is high, rents continue to rise. It is hard to find properties that meet the 1% rule because demand is so high in the sub 250k price range for owner occupants. IF you are in for the long term 10 plus years it's a good bet. Good luck and please feel free to reach out if I can be of any help.
@Mike Terry this is awesome feedback thank you. I have decided to pull the trigger and am purchasing 10 single family rentals. Would love to stay in touch! All the best - Kellianne
@kellianne Fedio did you end up purchasing these properties? What price ranges did you go with and how are things going?
@Kellianne Fedio , I'm looking at turnkey investments in Cape Coral with new construction. Thanks for starting this thread - the comments have been really helpful. Would you mind sharing some of your lessons learned or any suggestions? Thanks!