Cape Coral -New B2R-Rent to Retirement

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Cape Coral -New B2R-Rent to Retirement

Cj Powderhorn
Investor · UT · Member since 2020 · 84 posts · 91 votes

Hi, Looking at some NB in the 33993 area. SFH. Has anyone worked with Zach Lemaster and his guys in this area? Just looking for a couple of references as well as some of the FL specific gotchas - besides the alligators. Also, wondering if the NB areas typically include future assessment and flood/wind insurance into their calculations? I've at about 10 investments SFH and Duplex, but and looking for a new area so I feel like I am starting over a bit! Thanks very much, Cj

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Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
4y

@Cj Powderhorn

Thank you for the kind words. I've always enjoyed our lively conversations about REI, tax strategies, financial planning, the military, skiing, or whatever fun topics we share in common! No doubt we understand that some of our new construction projects are not the correct fit for everyone. Naturally when you say you decide to cancel everyone immediately wants to know what happened assuming something went wrong, or there was big issue that changed your mind. Reality is this just wasn't the right fit for you at the this point in time. Thank you for clarifying this.

A couple points to expand on for the general community, we are mainly focusing on building in Lee County in SWFL.  We focus on specific metrics and data points there that are important to follow from an investment standpoint.  What we do know, and can measure right now, is an increasing demand for housing that is not able to keep up with the population trends.  I've included some graphs below.  This causes the rents and market value to increase dramatically.  To use an example, we initially projected the 4/2 model a year ago to rent for ~$1,800 to $1,850 with about $20k of immediate equity.  Now that these homes are completing we are seeing rents in the $2,200 to $2,300 range & investors having ~$50k+ in immediate equity.  Even now with the prices in the high $200k range most all appraisals are coming in the $350k to $400k range.  If anyone would like to see copies of these appraisals, just reach out.  We have many to share with you.  This is all due to the nature of the housing market in SWFL.  While we all know this will not last forever, now is an exceptional time to capitalize on the market trends to invest in a brand new build that has excellent cash flow & immediate equity which is extremely rare to come by.  You will need to be patient however as it will likely take a year or longer to build these with permitting delays, etc.  So you need to be prepared for that, but the wait is worth the benefit.  If this is not a location that seems like an area you want to own in long term, that is completely fine.  I recommend selling the home to cash in on the immediate equity.  You could also be creative to do a cash out refinance to pull the majority of your equity back out to reinvest elsewhere.  I've been a professional RE investor for many years now investing across the country.  I can't say I've seen many opportunities quite like what is available in SWFL right now.  This is where I'm personally allocating most of my own capital currently for new construction investments!

Florida does consistently rank as one of the top markets people are moving to often 2nd right behind TX (FL has significantly lower taxes than TX).  We do see the population increasing year after year.  Especially when you look at specific areas of the state where we are focusing on you will see these trends dramatically increasing over the past few years.  No doubt this is an exceptional time to invest in the right locations in FL, especially with new construction that has immediate equity & attractive cash flow.

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  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    5y

    @Cj Powderhorn

    I'm going to assist you a little here to connect with previous clients that can help answer your questions.  I've attached some links below to discussion threads that might be useful for you to review.  Some of these focus on new builds, some on traditional TK.  For your questions on insurance, flood insurance is not required.  The canal system allows for water level control, and the way the lots are developed assist this with property grading.  These lots are not in flood zones.  We do accurately account for typical insurance coverage that includes wind/storm, etc.  So all those numbers are included already.  No gotchas, ; ).  Closings costs are more expensive in FL than most states, but again we've accounted for that in our calculations.  A couple lots have had turtle nests be relocated safely & in an environmentally friendly way which delayed permitting a month or so, but that is it so far.  Hopefully some of these below threads will also be helpful of past investors.  Of course, I'm available with any other questions you have.  @Joseph Schweizer do you have any insight on this?

    https://www.biggerpockets.com/users/ZacharyCole/references

    https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

    https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

    https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

    https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

    [email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
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    7Reply
  • Joseph Schweizer
    Investor · Member since 2020 · 291 posts · 592 votes
    5y

    Hi @Cj Powderhorn!

    I invested with Zach and his team this past October. It was in Kansas City, MO. I wrote a post about it (see below) and would be happy to share more about my experience if you have any specific questions for me! I am currently saving capital and I plan to make another investment with Zach and his team in the 4th quarter of this year!

    https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

    Best Wishes!

    7Reply
  • Corey Morrison
    Investor · Cape Coral, FL · Member since 2016 · 45 posts · 24 votes
    5y

    @Cj Powderhorn I live in Cape Coral.

    I don’t know Zach, but I can certainly help with regards to questions about the Cape, assessments, burrowing owls. Turtles and etc.

    I’ll DM my contact info to you.

    0Reply
  • Jeff T.
    Rental Property Investor · Culver City, CA · Member since 2014 · 221 posts · 79 votes
    5y

    @Cj Powderhorn

    Look at what The Norris Group (Bruce and Aaron Norris) is doing in that area. They are doing new build flips and new build rentals. They are a solid business.

    I’ve invested in notes with them.

    1Reply
  • Peter Davis
    Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    5y

    @Cj Powderhorn

    I'm not familiar with them but you can certainly go it alone with the help of a good manager. I would stay out of the next utility extension project area in the north of Cape Coral, North 1. That's where they're installing city water, sewer and irrigation. New construction is the way to go plus you get the warranties. I know a builder that's building a 4/2/2 with over 2,100 SF for the low $200's. Those can rent for upwards of $2000/month.

    3Reply
  • Terry Fox
    Investor · Ellington, CT · Member since 2012 · 60 posts · 16 votes
    5y

    Hi @Peter Davis, can you send me information on that builder?  Does that price include the lot?  Thank you.

    0Reply
  • Chris Piazza
    Member since 2021 · 9 posts · 6 votes
    5y

    I've lived in that area for over 15 years and do home inspections in SWFL. The previous mentions of turtles, owls, water, and sewer assessments are all big issues to consider when doing a NB in that area. One other thing to consider is the condition of the seawall if you're going to build on a canal. A lot of the seawalls in the area are 40-50 years old and some of them have started to fail especially after our last big hurricane in the area. Seawall repairs and replacements get expensive very quickly. Good luck! 

    2Reply
  • Adam Sorrells
    Member since 2020 · 11 posts · 0 votes
    5y

    @Joanna Rinella I would like info on your builder please

    0Reply
  • Cj Powderhorn
    OP
    Investor · UT · Member since 2020 · 84 posts · 91 votes
    5y

    @Chris Piazza, how do you feel about the hurricanes? I have some friends there and it seems they always end up with stuff not being covered (either wind or water damage). They have all the insurances that they 'are supposed to'.  Also, do all of the canals need a seawall?  I've seen some that just have vegetation.  Thanks, Cj

    0Reply
  • Julie Sisnroy
    Realtor · Papillion, NE · Member since 2013 · 134 posts · 59 votes
    5y

    I'm interested in this area too, so following!

    1Reply
  • Steven Rubino
    Stoneham, MA · Member since 2017 · 56 posts · 186 votes
    5y

    I'm also interested! 

    + Follow

    1Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    5y

    @Steven Rubino

    I'm more than happy to answer any questions you have.

    @Cj Powderhorn is moving forward with a build, and I'm sure she would be available to tell you about her experience so far as well.

    [email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
    Rent To Retirement5334 Reviews
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    5Reply
  • Magesh R.
    Investor · Bradenton, FL · Member since 2014 · 109 posts · 17 votes
    5y

    @Joanna Rinella

    I’m looking for investments in that area as well. Can we discuss?

    0Reply
  • Magesh R.
    Investor · Bradenton, FL · Member since 2014 · 109 posts · 17 votes
    5y

    @Peter Davis

    I would be interested if you still have some available

    0Reply
  • Cj Powderhorn
    OP
    Investor · UT · Member since 2020 · 84 posts · 91 votes
    5y

    This is the first new build experience for me and I'm at the beginning of the process! @Zach Lemaster has been incredibly helpful with all steps in the process so far. I have been very impressed with him!

    3Reply
  • Ben Grubb
    Rental Property Investor · Denver, CO · Member since 2021 · 22 posts · 11 votes
    5y

    @Cj Powderhorn CJ I Pm'd you. I'm at the same step as you with R2R. Let's chat.

    1Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    5y

    @Cj Powderhorn

    I appreciate the kind words!  We look forward to building a long term business partnership with you!

    [email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
    Rent To Retirement5334 Reviews
    WebsiteView Page
    0Reply
  • Sandeep Ben
    Lender · South Jersey · Member since 2017 · 1 post · 2 votes
    5y

    @Cj Powderhorn @Ben Grubb - I sent you DMs. Would like to chat with you both. Thanks!

    2Reply
  • John Kiczalis
    Member since 2021 · 1 post · 0 votes
    5y

    Hi, also looking to build in this area. how has it gone so far? any cost increases due to shortages? 

    0Reply
  • Don M.
    Member since 2021 · 135 posts · 203 votes
    4y
    Originally posted by @Cj Powderhorn:

    This is the first new build experience for me and I'm at the beginning of the process! @Zach Lemaster has been incredibly helpful with all steps in the process so far. I have been very impressed with him!

    How has your progress been with the build?  We are interested in this process, as well.

    7Reply
  • Cj Powderhorn
    OP
    Investor · UT · Member since 2020 · 84 posts · 91 votes
    4y

    I had 2 NB under contract in CC. I cancelled both of them. One was w RTR and one was with Norada. Feel free to PM me with any questions.

    0Reply
  • Ivan Terrero
    Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes
    4y

    @Cj Powderhorn..what happened?

    0Reply
  • Mekail Grant
    Investor · Carson, CA · Member since 2021 · 12 posts · 14 votes
    4y

    I just closed on the financing for my NB in CC.  I've talked to multiple people in the process.  Feel free to ask me any questions. 

    2Reply
  • Qiang Chen
    Specialist · Member since 2021 · 14 posts · 9 votes
    4y

    @Mekail Grant

    Hi Did you use second home loan or private loan they recommend?

    1Reply
  • Mekail Grant
    Investor · Carson, CA · Member since 2021 · 12 posts · 14 votes
    4y

    I did the second home loan %10 down.  I bought the lot first. 

    2Reply
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