$140k Orlando SFH to House Hack

8 Replies

Hey guys!

This is actually my very first post on the Bigger Pockets site. I started listening to the podcasts a month ago and can't get enough - I am thirsty for knowledge. So, now I have lots of good books to read and am going to educate myself a bit before actually diving into investing. I live in Sumter County, which is an hour from both Orlando and Tampa. I'm pretty familiar with Orlando, so I plan to start my investment path with house hacking there. 

Anyway, while looking around Orlando on Zillow, I found this home. I haven't yet delved into how to analyze deals and such, but I'm eager to know if my initial line of thinking makes sense. So, what do y'all think about this, as a hypothetical? If I lived in the mother-in-law suite and rented out the other two bedrooms in this home, it seems as though that would definitely cover the mortgage, given the decent location, and then after I move out in a year, cash flow could be around or over $1,000. Couldn't I even do a HomeStyle Renovation mortgage and roll the rehab costs into the loan amount if I wanted to fix it up beforehand?

Orlando seems like such an exciting place to invest. I can't wait to learn more and get started!

Happy to see you are excited and eager to learn and start investing! The property itself looks like it may need some work, hopefully not too much, but for a house built in 1950 I wouldn't be surprised if it takes a significant rehab. How is this area in Orlando? Would you be renting to students, family? I'm a bit surprised you are able to find 3/2 homes for under 150k. My market in South FL, (ft Lauderdale area) is highly inflated at the moment. 

Well, then that makes sense. I looked around the neighborhood on Google Maps, and it didn’t look too bad. And isn’t this a neighborhood with growing areas around it?


Originally posted by @Huy Le :

@Jody Hodges if you want to live in the hood. Very unsafe area

 

Do some research on the area. You can find statics on crime and compare that to the surrounding area, or the closest “best” area. Look up the closest schools, are they rated poorly? Ideally for a rental property, you want to attract quality tenants that are reliable and dependable, that’s a complete topic on its own. Bad looking homes and neighborhoods typically attract “bad” people that would usually fit it. Usually you want to find an B house in an A neighborhood. Or the ugliest house in a very good neighborhood. Then fix it up, and rent, refinance, repeat. Or just rehab and resell. A friend of mine used to live in Winter Park and he said the area was pretty bad, with that being said it’s not impossible to still make money in those markets. Neighborhoods can change different people move in and new can markets grow. We are starting to see that and some of the “bad” Areas in South Florida

@Jody Hodges Google maps is only so good for looking at a neighborhood. Get in touch with a local realtor and they can help you get to know the different neighborhoods. 

@Jody Hodges , that isn't the best area, as noted above... but not so much because of the crime, although that is an issue, but from a numbers perspective, houses in that area were going for 30-50k just 2 years ago, and now that investors have gotten wise, they are making minimal repairs and reselling for much greater amounts. A good way to tell is to look at the prior sale price and find what it last sold for (Zillow has this info and the County Property Appraiser usually does as well). This one sold for 32.6k (granted this was back in 2014), but that number is definitely the top end for that area. I don't back on appreciation plays, but would never buy where I know there won't be any appreciation, unless that cash flow was just amazing. This would not be the case here.

Such useful information - thanks, Dylan! I suppose these are the things I’ll learn when reading all the books I recently bought. I’m just so eager to jump in.


Originally posted by @Dylan Shea :

@Jody Hodges, that isn't the best area, as noted above... but not so much because of the crime, although that is an issue, but from a numbers perspective, houses in that area were going for 30-50k just 2 years ago, and now that investors have gotten wise, they are making minimal repairs and reselling for much greater amounts. A good way to tell is to look at the prior sale price and find what it last sold for (Zillow has this info and the County Property Appraiser usually does as well). This one sold for 32.6k (granted this was back in 2014), but that number is definitely the top end for that area. I don't back on appreciation plays, but would never buy where I know there won't be any appreciation, unless that cash flow was just amazing. This would not be the case here. 

 

@Jody Hodges

That home and neighborhood do not look like a good location or home to buy as your first deal. If i were you, try finding something built after 2003. The insurance is half the price and the home should have much better bones. I invest a bit south of Orlando and have house-hacked 4 times. If you need a hand on looking for good homes or areas let me know.

Happy housing,

Matt