STR Deal Analysis (AirBNB VRBO) in Tampa Florida (Brandon area)
Hi!
Looking to see other's input on this deal in brandon, FL. The property is in a great location, just 20 min from downtown tampa and just over 1 hr from disney /east orlando. This will be our first investment property! Planning to turn it into a short term rental (air BNB, VRBO) with a backup strategy of short term rental to travel nurses, etc.
Deal details:
Location: Brandon, FL
Price: 365K purchase price, Rehab/Furnish costs: 64 K (putting 20% down, paying our own closing costs). Interest rate 7.5%
Property details: 4 Bed, 2 Bath, fully enclosed pool, 2195 sq ft living area (planning to have at least 14 guests)
Anticipated revenue: 5k/month (this is conservative end)
Total Expenses/month: 3.9k (mortgage + taxes + insurance = 2.8k/month)
Cash on Cash return: 9%
The issue we found on our original numbers vs what is coming back now from the mortgage lender is that the insurance is MUCH higher than anticipated (77/month flood and approx 360/month property). Going to spend the day today calling around seeing if I can get a better rate but wanted to get the forum's perspective because there is a pretty good demand for larger groups/short term renals in this area. The property is in pretty good shape (just needs some TLC plus a full new HVAC system) and that price is well below most other properties in the area and has been sitting on the market for a few months so we were able to negotiate a lower price. I got multiple estimates during the inspection so I'm pretty confident in the rehab costs. Our full inspection contingency period is up on monday, so any comments/thoughts you're willing to share would be much appreciated!
Are you working with an agent? Are you actually in a flood zone in Brandon? Most of Brandon is not, there are just a lot of little bodies of water that create a small flood zone radius. Even if your lot is on a flood zone, as long as the structure isn't, usually you're ok. Hope you're calculating taxes correctly and not copying what Zillow says! Otherwise doesn't look too bad
Quote from @Dillon Cook:
Are you working with an agent? Are you actually in a flood zone in Brandon? Most of Brandon is not, there are just a lot of little bodies of water that create a small flood zone radius. Even if your lot is on a flood zone, as long as the structure isn't, usually you're ok. Hope you're calculating taxes correctly and not copying what Zillow says! Otherwise doesn't look too bad
Yes, we are working with an agent, and unfortunately it is in a flood zone (I'm guessing its an elevation issue because its not right next to a lake). And yes, taxes NOT copied from zillow, pulled the county tax reports and estimated without homestead and other exemptions + received an updated tax number from the mortgage lender. Appreciate your input!
@Amelia Casalenuovo I can get you guys revenue projection for the property and a contact for local insurance agent who has done STR policies for my clients. Message me and lets talk :)
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Quote from @Lucie Tighe:Thanks for your feedback!
@Amelia Casalenuovo I can get you guys revenue projection for the property and a contact for local insurance agent who has done STR policies for my clients. Message me and lets talk :)
Quote from @Amelia Casalenuovo:It's not a home run deal, but will be a good experience to have under your belt. It's more difficult to find really great cash flowing properties for STR these days, so I'd view this as win!
Hi!
Looking to see other's input on this deal in brandon, FL. The property is in a great location, just 20 min from downtown tampa and just over 1 hr from disney /east orlando. This will be our first investment property! Planning to turn it into a short term rental (air BNB, VRBO) with a backup strategy of short term rental to travel nurses, etc.
Deal details:
Location: Brandon, FL
Price: 365K purchase price, Rehab/Furnish costs: 64 K (putting 20% down, paying our own closing costs). Interest rate 7.5%
Property details: 4 Bed, 2 Bath, fully enclosed pool, 2195 sq ft living area (planning to have at least 14 guests)
Anticipated revenue: 5k/month (this is conservative end)
Total Expenses/month: 3.9k (mortgage + taxes + insurance = 2.8k/month)
Cash on Cash return: 9%
The issue we found on our original numbers vs what is coming back now from the mortgage lender is that the insurance is MUCH higher than anticipated (77/month flood and approx 360/month property). Going to spend the day today calling around seeing if I can get a better rate but wanted to get the forum's perspective because there is a pretty good demand for larger groups/short term renals in this area. The property is in pretty good shape (just needs some TLC plus a full new HVAC system) and that price is well below most other properties in the area and has been sitting on the market for a few months so we were able to negotiate a lower price. I got multiple estimates during the inspection so I'm pretty confident in the rehab costs. Our full inspection contingency period is up on monday, so any comments/thoughts you're willing to share would be much appreciated!
My usual rule of thumb is checking if revenue = 15% of purchase price + rehab costs. In your post, I wasn't sure if your rehab/furnish costs included down payment + closing costs, but if you're pulling in $60k of revenue a year, the price + rehab should be $400k or less.
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Quote from @Eric Yu:
Quote from @Amelia Casalenuovo:It's not a home run deal, but will be a good experience to have under your belt. It's more difficult to find really great cash flowing properties for STR these days, so I'd view this as win!
Hi!
Looking to see other's input on this deal in brandon, FL. The property is in a great location, just 20 min from downtown tampa and just over 1 hr from disney /east orlando. This will be our first investment property! Planning to turn it into a short term rental (air BNB, VRBO) with a backup strategy of short term rental to travel nurses, etc.
Deal details:
Location: Brandon, FL
Price: 365K purchase price, Rehab/Furnish costs: 64 K (putting 20% down, paying our own closing costs). Interest rate 7.5%
Property details: 4 Bed, 2 Bath, fully enclosed pool, 2195 sq ft living area (planning to have at least 14 guests)
Anticipated revenue: 5k/month (this is conservative end)
Total Expenses/month: 3.9k (mortgage + taxes + insurance = 2.8k/month)
Cash on Cash return: 9%
The issue we found on our original numbers vs what is coming back now from the mortgage lender is that the insurance is MUCH higher than anticipated (77/month flood and approx 360/month property). Going to spend the day today calling around seeing if I can get a better rate but wanted to get the forum's perspective because there is a pretty good demand for larger groups/short term renals in this area. The property is in pretty good shape (just needs some TLC plus a full new HVAC system) and that price is well below most other properties in the area and has been sitting on the market for a few months so we were able to negotiate a lower price. I got multiple estimates during the inspection so I'm pretty confident in the rehab costs. Our full inspection contingency period is up on monday, so any comments/thoughts you're willing to share would be much appreciated!
My usual rule of thumb is checking if revenue = 15% of purchase price + rehab costs. In your post, I wasn't sure if your rehab/furnish costs included down payment + closing costs, but if you're pulling in $60k of revenue a year, the price + rehab should be $400k or less.
I've never heard of that rule of thumb before, thats a really good way to look at it. Total for down payment + closing costs + taxes is ~85k. But yes, 60K was a very conservative estimate (the range on air DNA for comparable properties are grossing 56-90K/yr) and price + rehab we should be right around 400k, maybe a little closer to 405K. Thank you for the additional insight, if for some reason we dont go through with this, I'll for sure keep this in mind for the future!
Quote from @Amelia Casalenuovo:
Hi!
Looking to see other's input on this deal in brandon, FL. The property is in a great location, just 20 min from downtown tampa and just over 1 hr from disney /east orlando. This will be our first investment property! Planning to turn it into a short term rental (air BNB, VRBO) with a backup strategy of short term rental to travel nurses, etc.
Deal details:
Location: Brandon, FL
Price: 365K purchase price, Rehab/Furnish costs: 64 K (putting 20% down, paying our own closing costs). Interest rate 7.5%
Property details: 4 Bed, 2 Bath, fully enclosed pool, 2195 sq ft living area (planning to have at least 14 guests)
Anticipated revenue: 5k/month (this is conservative end)
Total Expenses/month: 3.9k (mortgage + taxes + insurance = 2.8k/month)
Cash on Cash return: 9%
The issue we found on our original numbers vs what is coming back now from the mortgage lender is that the insurance is MUCH higher than anticipated (77/month flood and approx 360/month property). Going to spend the day today calling around seeing if I can get a better rate but wanted to get the forum's perspective because there is a pretty good demand for larger groups/short term renals in this area. The property is in pretty good shape (just needs some TLC plus a full new HVAC system) and that price is well below most other properties in the area and has been sitting on the market for a few months so we were able to negotiate a lower price. I got multiple estimates during the inspection so I'm pretty confident in the rehab costs. Our full inspection contingency period is up on monday, so any comments/thoughts you're willing to share would be much appreciated!
Amelia, I actually live in the Brandon area...I actually used to be on the Board of Brandon's Chamber of Commerce. If you want to PM me the address, I can pull the FEMA map and send it to you for the home. I've lived her for 22 years and I've done a lot of real estate loans and deals in Brandon. I'm happy to give you my 2-cents, but Florida insurance is higher in general.
Quote from @Doug Smith:
Quote from @Amelia Casalenuovo:
Hi!
Looking to see other's input on this deal in brandon, FL. The property is in a great location, just 20 min from downtown tampa and just over 1 hr from disney /east orlando. This will be our first investment property! Planning to turn it into a short term rental (air BNB, VRBO) with a backup strategy of short term rental to travel nurses, etc.
Deal details:
Location: Brandon, FL
Price: 365K purchase price, Rehab/Furnish costs: 64 K (putting 20% down, paying our own closing costs). Interest rate 7.5%
Property details: 4 Bed, 2 Bath, fully enclosed pool, 2195 sq ft living area (planning to have at least 14 guests)
Anticipated revenue: 5k/month (this is conservative end)
Total Expenses/month: 3.9k (mortgage + taxes + insurance = 2.8k/month)
Cash on Cash return: 9%
The issue we found on our original numbers vs what is coming back now from the mortgage lender is that the insurance is MUCH higher than anticipated (77/month flood and approx 360/month property). Going to spend the day today calling around seeing if I can get a better rate but wanted to get the forum's perspective because there is a pretty good demand for larger groups/short term renals in this area. The property is in pretty good shape (just needs some TLC plus a full new HVAC system) and that price is well below most other properties in the area and has been sitting on the market for a few months so we were able to negotiate a lower price. I got multiple estimates during the inspection so I'm pretty confident in the rehab costs. Our full inspection contingency period is up on monday, so any comments/thoughts you're willing to share would be much appreciated!
Amelia, I actually live in the Brandon area...I actually used to be on the Board of Brandon's Chamber of Commerce. If you want to PM me the address, I can pull the FEMA map and send it to you for the home. I've lived her for 22 years and I've done a lot of real estate loans and deals in Brandon. I'm happy to give you my 2-cents, but Florida insurance is higher in general.
thanks Doug, appreciate the insight!
@Amelia Casalenuovo how did you arrive at annual revenue of 60k? What did you use as the average daily rate for a 4 bed,2 bath in Brandon/Tampa?
The interest rate of 7.5% seems high, do more shopping.
I hope your rehab includes adding one to two more bathrooms. 14 people don t fit into 2 bathrooms.
That ConC number is very low for running a business.
Quote from @Todd Goedeke:
@Amelia Casalenuovo how did you arrive at annual revenue of 60k? What did you use as the average daily rate for a 4 bed,2 bath in Brandon/Tampa?
The interest rate of 7.5% seems high, do more shopping.
I hope your rehab includes adding one to two more bathrooms. 14 people don t fit into 2 bathrooms.
That ConC number is very low for running a business.
Appreciate your insight Todd, thank you! We got to the 60k in revenue using the average daily rates/percent occupancy for comparable properties on air DNA. Some comparable properties had 3 bathrooms, others had 2. 60k was the lowest number of all the properties we saw that were similar so that’s what we based our numbers off of.
Have you seen many investor loans with better rates than 7.5% recently? Just curious because when i was searching I really didn’t find anything better, not sure if there’s something I’m overlooking. My fiancé and I have 20% to put down and both have very good credit scores (~780 and up).
@Amelia Casalenuovo those numbers seem skewed.I don t see that property taking in 5k during the hot months of summer. I would not use an occupancy rate greater than 65% when doing projections.
In addition , Snowbird rates are much less per month for the property you described in Tampa.
Check with more mortgage brokers on rates. You can also buy down the % rate.
@Amelia Casalenuovo
Personally, I have a hard time seeing this deal making sense especially with flood insurance being tacked on. I'd highly recommend you have a strong idea of the flood insurance cost before going under contract or within your inspection period.
As an agent that does a high volume of STRs in the greater Tampa bay area, I have a hard time seeing this opportunity in Brandon being the best choice, even at the lower price point of entry (sub $400k).
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Real Estate Agent
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Quote from @Todd Goedeke:14 people don’t fit into 4 bedrooms either!
14 people don’t fit into 2 bathrooms.
@Josh Green is all the surrounding area south of Tampa, within 20 miles, considered flood zone requiring flood insurance?
@Kristi K.I agree , for 14 people you need 7 bedrooms.
Quote from @Todd Goedeke:
@Josh Green is all the surrounding area south of Tampa, within 20 miles, considered flood zone requiring flood insurance?
Hey Todd! Was checking the responses on here so figured I would respond to this as well and let Josh share any additional thoughts. Every county has an interactive map for you to look up the flood zone of a particular property. They base that on the annual risk of flooding and the risk of flooding over a 30 yr mortgage. Flood zone A (which is what this property is in) has an annual risk of flooding around 1% and ~26% over the span of a 30 yr mortgage. Flood insurance is primarily required by lenders so for people who have financed their property and the property structure is in a flood zone. Some people have part of their land in a flood zone but are not required by their lender to purchase flood insurance. Brandon, FL is more inland than Tampa, so while it isn't right on the cost, there are considerations based on surrounding bodies of water and elevation that could put properties in a flood zone. (Ie, this property we are in the inspection contingency period for is in flood zone A but the properties on the other side of the street are not). For people who own a condo, the condo associations carry flood insurance that covers your property and mortgage lenders accept this as coverage, you just have to submit the copy of their coverage to your lender to satisfy that aspect of your mortgage requirements
@Todd Goedeke
No it's all based on the FEMA flood map. There are different flood zones/codes. Zones X or X500 do not require flood insurance on a financed purchase. Other zones (A, AE, etc) require flood insurance on a financed purchase. Flood insurance is very variable in cost - there's several factors that are in play making it hard to estimate the cost without getting a quote.
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Real Estate Agent
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@Amelia Casalenuovo
Good talking to you this evening. After reviewing all the numbers and details, I think this opportunity is worth pursuing further 👍🏼
Feel free to reach out anytime if you have any questions on anything further on this deal or afterwards as you prepare to launch and begin your hosting journey 😃
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Real Estate Agent
- 801-441-8891
- http://tamparei.com
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