Hello! Newbie here looking to verify a sample deal. I don't actually intend to immediately action on this until I do MUCH more homework in the area. I am looking to remotely invest in rental property near Vero Beach, FL. I have visited there for two weeks on another business venture and at least know a few areas to avoid. There are several of the similar properties in the area I was looking so I ran a sample analysis:
4br / 2ba 1300 sqft SFH built in 95' / roof, exterior, grounds in good condition
List price: 150K (higher than surround units/comps on same street by 10-15%)
$10K in assumed repairs (yet to ask for interior photos)
$5K in closing costs
160k w/ 20% down + 4% interest rate is $572/mo
rentometer average is $1686 for 4br 1.5+, and about the same for 3br too.
So, what am I doing wrong on analysis besides verifying interior condition? And yes, I am assuming lower rent, $10K in unverified repairs, and paying full price with zero concessions
Great Work So Far! My wife Laura and I are active real estate investors and agents here in Vero Beach. I'd say for a true 4 bed 2 bath home (in a decent location) your rents will definitely be higher than $1500. Where specifically in Vero is this property? Also, Curious which property manager you are using (for 7%)? My experience is that for 1 single family home you will pay 8~10. I have a fantastic PM you can use if you'd like. Message me and I will send you her number. I am also curious if this home is truly a 4 bedroom because (on the retail market) the next least expensive 4 bed 2 bath home in Vero Beach is $290,000 (per MLS on 05/08/21). Be careful... sometimes if it seems to good to be true then maybe it is. Depending on the age of the roof you will likely have to factor in more for insurance... Also, I would expect a conservative 8~10% for you maintenance and repairs. (cost of labor + material is rising) If you factor all this in and it still cashflows then go for it! Vero is Growing and I believe we have a long way to go. If you have any questions at all feel free to reach out. Thanks!
Property went from available to pending overnight so I figure it wouldn't hurt to post the deal here:
I do not think it is a 4/2 but a 3/2 based on the house size, which again would be normal for surrounding units. Description still insists on 4/2. No photos other than the outside.
OK That makes sense... That property is a 3/2 1200 sqft in Gifford. This property is still a deal (for someone) in this market. However, as an investment you will need to factor in (lower) rents, Higher Turnover, and more maintenance in this part of town. Also, a quick check of the building department indicates that the roof is original... Will need to be replaced in order to get insurance for the property. . . I know a good guy for this. Feel Free to message me if you have any question. Best of luck to you Nicholas. , Derek Stalhut
I should mention that it wasn't my offer. I didn't dig into any more as I am not in a position to quite invest quite yet. I am still doing a lot of market research to the north and south to see what is available and get a sense for the market.
@Derek Stalhut Would be interested in who you're using as a PM if you can message me. Self managing in the area, but looking to bring in outside help vs train in my own replacement.