Turnkey Investing in Cape Coral Florida?

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Turnkey Investing in Cape Coral Florida?

Kellianne Fedio
New to Real Estate · Redondo Beach California · Member since 2019 · 6 posts · 10 votes

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:)

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Trevor Fleck
Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes
4y

@Matthew Pridgeon I've had pretty good luck with new construction properties to rent in Cape Coral with Rent to Retirement. I'd be happy to chat about my experiences. 

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  • Joanna Rinella
    Real Estate Broker · Cape Coral, FL · Member since 2020 · 38 posts · 30 votes
    6y

    @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!

    3Reply
  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    6y

    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!

    [email protected]850-259-2910
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  • Carl Hebert
    Rental Property Investor · Auburn, ME · Member since 2015 · 236 posts · 140 votes
    6y

    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. 

    4Reply
  • Kellianne Fedio
    OP
    New to Real Estate · Redondo Beach California · Member since 2019 · 6 posts · 10 votes
    6y

    Thank you @Joanna Rinella, @Stetson Miller, and @Carl Hebert for the feedback:)  Much appreciated!  

    2Reply
  • Danny Plueddemann
    Rental Property Investor · Charlotte, NC · Member since 2010 · 23 posts · 11 votes
    6y

    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.  

    3Reply
  • Corey Morrison
    Investor · Cape Coral, FL · Member since 2016 · 45 posts · 24 votes
    6y

    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. 

    3Reply
  • Kellianne Fedio
    OP
    New to Real Estate · Redondo Beach California · Member since 2019 · 6 posts · 10 votes
    6y

    Thanks @Danny Plueddemann and @Corey Morrison for your comments re:  flood insurance:)

    @Corey Morrison thanks for your message as well...I responded and look forward to chatting further:)

    1Reply
  • Peter Davis
    Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    6y

    @Kellianne Fedio

    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!

    1Reply
  • Kellianne Fedio
    OP
    New to Real Estate · Redondo Beach California · Member since 2019 · 6 posts · 10 votes
    6y

    Thanks so much @Peter Davis...very helpful info!

    0Reply
  • Peter Davis
    Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    6y

    @Alvin Taveras

    Hi Alvin,

    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.

    Thanks!

    1Reply
  • Erin Shine
    Investor · Denver, CO · Member since 2017 · 22 posts · 30 votes
    6y

    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 -

    https://coast.noaa.gov/slr/

    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. 

    4Reply
  • Peter Davis
    Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    6y

    @Erin Shine

    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.

    1Reply
  • Mike TerryPro Member
    Investor · Fort Myers, FL · Member since 2015 · 292 posts · 278 votes
    6y

    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.

    sincerely,

    MT

    3Reply
  • Kellianne Fedio
    OP
    New to Real Estate · Redondo Beach California · Member since 2019 · 6 posts · 10 votes
    6y

    @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

    1Reply
  • Dan Bass
    Kansas City, KS · Member since 2019 · 58 posts · 66 votes
    5y

    @kellianne Fedio did you end up purchasing these properties?   What price ranges did you go with and how are things going?

    0Reply
  • Suzanne Miller
    New to Real Estate · Northern California · Member since 2020 · 4 posts · 2 votes
    5y

    @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!

    Suzanne

    0Reply
  • Matthew PridgeonPro Member
    Investor · Lynnwood, WA · Member since 2021 · 3 posts · 1 vote
    4y

    Hi, I am also recently looking to purchase a new construction property in Cape Coral that I am looking to rent out. Any advise is much appreciated. Thanks!

    0Reply
  • Trevor Fleck
    Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes
    4y

    @Matthew Pridgeon I've had pretty good luck with new construction properties to rent in Cape Coral with Rent to Retirement. I'd be happy to chat about my experiences. 

    8Reply
  • Rodney MenendezPro Member
    Developer · South West Florida · Member since 2020 · 74 posts · 53 votes
    4y

    What do you guys think about the the short term rental market in Cape Coral? I have been thinking about experimenting with short term rentals in Cape Coral but I am not sure since it is not a true vacation market and the city limits the short term rentals to 7 days minimum.

    [email protected]239-288-0702
    2Reply
  • Matthew PridgeonPro Member
    Investor · Lynnwood, WA · Member since 2021 · 3 posts · 1 vote
    4y
    Trevor, that’s great. I’ll reach out to you.
    thanks, Matt

    Originally posted by @Trevor Fleck:

    @Matthew Pridgeon I've had pretty good luck with new construction properties to rent in Cape Coral with Rent to Retirement. I'd be happy to chat about my experiences.  

    1Reply
  • Trevor Fleck
    Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes
    4y

    @Rodney Menendez I owe you a phone call! In the meantime, my thoughts on short-term rental market in Cape Coral. @Stetson Miller had a nice post on short-term rentals. I wasn't aware of the 7 day minimum so that is a concern. Looking at some airbnb data, looks like a roughly 71% average occupancy at roughly $220-250/night. As Stetson mentions, there does seem to be a distinct high and low season. I'd imagine having a pool and a hot tub would be appealing to short-term renters but I was told the average pool will cost ~$70k these days and there is quite a backlog. I'm still a firm believer that if you know how to take great pictures, stage a place, and make it unique, you'll do just fine with short-term rentals even if it's not the "perfect" market. 

    4Reply
  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    4y

    @Rodney Menendez The Cape Coral STR market is rapidly expanding and has certainly become a prominent strategy for investors in this area. The demographic being targeted is snowbirds (older/retired population), so the typical components that would designate a 'true vacation market' aren't necessary to facilitate success.

    As you stated, the city technically does limit the minimum rental period to 7 days, however, that is not something they are currently able to enforce. The city is working on the infrastructure to be able to enforce and somehow regulate the industry, but as of now, that city ordinance is the only thing preventing that. 

    As @Trevor Fleck mentioned, there are a few specific features that can significantly increase your rental demand in this area, specifically a pool and some kind of waterfront feature. This can be the lake, gulf, river, or even a basic canal. With these two features, a standard 4/2 in the right area of Cape Coral can easily rent for $350+ per night during the busy season, at close to 100% average occupancy

    [email protected]850-259-2910
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    2Reply
  • Rodney MenendezPro Member
    Developer · South West Florida · Member since 2020 · 74 posts · 53 votes
    4y

    @Stetson Miller thank you for your insight. I will definitely give it a try in the near future.

    [email protected]239-288-0702
    0Reply
  • Mary Simic
    Member since 2021 · 2 posts · 2 votes
    4y

    Does anyone have an experience with Dr. Horton's new constructions in Cape Coral. I'm considering to purchase one 3/2/2 in 33990 and the price includes (paid) assessments. Btw. what is an average price of the assessments in Cape Coral? I get confusing info between 17K-32K? 

    1Reply
  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    4y

    @Mary Simic I've walked through a few of their builds, the quality is easily sufficient for long term rentals. There's always something that isn't perfect like uneven grout lines or drywall that isn't perfectly smooth on the seams, but like I said they're all things that won't affect the rental potential of the property.

    The best way to gauge assessment cost if they haven't been charged already is to call the City of Cape Coral directly. Even though they can't give you an exact number, it will likely be much closer than what anyone else can estimate. You're correct in that these prices can range between $17-30,000+ depending largely on the type of connections you're receiving.

    [email protected]850-259-2910
    Stetson Miller Realtor545 Reviews
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    1Reply
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