I have an opportunity to move to Fort Lauderdale next year and I wanted to get some opinions about the area in terms of REI. I am considering purchasing a SFR as a primary residence and converting it to a rental in a few years or possible house hacking a duplex. However after looking at the market for just a few hours on Redfin/Zillow I'm struggling to understand how to create a positive cash flow with rentals in the area. I'm not looking for a home run but the combined housing prices + HOA fees seem to make breaking even a stretch.
Does anyone with experience in the area care to share what strategies have worked/not worked for them?
Hey @Dan Buchta indeed, south florida can look CRAZY when it comes to cash flow. But yes, I have helped a ton of BP'ers with house hacking as that often works out the easiest and fastest way to make it happen. There are some areas worth considering and it will depend on your budget. Feel free to post about it publicly or we can discuss. Whatever works for you!
Hi Dan - I completely understand how it may not look possible, but rents are high, so it can work. You just need to find the right neighborhood, and in my opinion, avoid the HOAs. There are plenty of areas around here in Fort Lauderdale where you can find a house with a cottage in back, or a studio off to the side, etc. I know of one in fact that will be on the market early next year - a large house with an attached apartment with separate entrance.
I live in the heart of Fort Lauderdale, in an area called Victoria Park. It's a little tough to cash flow here, but I'm down the road from plenty of little neighborhoods where it's a bit better. I call homewoners all day long for various investors. If I can help you find a specific property, please let me know. And as an aside, I love it here. There is (in normal times) plenty to do, lots of events and festivals, nice restaurants, gorgeous beaches... and with our constant influx of people from up north, not a bad place to invest!
Hey Dan I live in Fort Lauderdale and you are correct about the market being lopsided if you are looking for cash flow. This is the case in all of South East Florida. You will need to start networking with local wholesalers, realtors ect in order to find good off market opportunities. Also if you do find a deal you need to be ready to pull the trigger right away. Even off market properties are selling site unseen same day to local investors. This is how competitive the market is right now.
Taxes and insuranance take up a big portion of your monthly expenses. Depending on the location you might need additional wind and flood policies. For example I have a duplex east of I95 and the insurance runs about 4k per year. So do your due diligence when choosing the area you want to live.
I would be honored to discuss with you the SFLA market. This market is unique and competitive but this market has both cash flow and appreciation plays. DM me and we can discuss further.
In addition to looking to lower your acquisition costs, there are also creative ways to maximize your cash once you own the property - just closed on a few with interesting & lucrative tenant set up. Message me so we can discuss further.
I'll agree with you that right in South FL it is difficult to cash-flow positively if you're trying to get into the market now due to the recent influx of people from the northern parts of the US. There are still some good deals out there but not nearly like what there used to be just a couple of years ago. You're going to have to really dig to find a great cash-flow positive property at current prices. As others have said, I would generally avoid HOAs completely unless you have the time to research each specific community.
Your best best to is to buy a place in an up and coming area (read somewhat poor, but not dangerous) and plan to hold. I bought a condo as an investment 4 months ago (I know I said to avoid HOAs haha) and so far I have been very pleased with the board and my cashflow. I consider it a bit of luck, skill and good timing at the price I got it for with the high rent and relatively low HOA fee. It's 4 months later now and I am still pleased financially speaking.