All Forum Posts by: Dan Maciejewski

In the Kissimee area you can probably hit your budget, but the market is a bit saturated, so ADR is lower than you would want at that purchase price, and occupancy suffers since there's so many properties that are exactly the same.  You really want to stand out and be in the luxury space there.

In West Central Pinellas in particular, you're looking at around that price point as the median (420k) and average (530k) sales prices. That will usually mean a 3/2. Those numbers are coming down a bit as we go into winter but I don't think they are going to drop a ton -- there's still a ton of demand. And in the areas that you will want to buy for the highest ROI, there's still buyers competing. Overpriced and poorly located or maintained houses are starting to sit on the market for much longer now but these are exactly the houses that you won't want to be a successful vacation rental.

A 5+ bedroom with a pool is starting to move into the luxury market here.  That will push you above 550k, easily.  And in the best locations, well above 700k.

That's not to say 500k can't get you a great property. It will just be more like a well-located 3/2, maybe 4/3 with a pool (you need a pool). That will still look like a 9-11% cap rate and you can still get decent CoC ROI with financing.

I'm with everyone here.  You'll need an attorney do handle this.  There should be some that have (basically) flat rates and then a little extra if court dates are involved.  At least in my neck of the woods, it's pretty straightforward.

Property managers can handle evictions if they are already your manager, but even then, it's not included in management and there's an extra fee.  You'd be better off with an attorney that does it all the time and knows the judges, anyway.

Nobody in my market does -- that I'm aware of!

I'm not sure I see the attraction, other than a slightly reduced linen cost.  I can't imagine it would save a ton of laundry.

My market in Pinellas has slowed a bit for financed buyers.  That's a bit of a split between higher rates squeezing some financed buyers out and a lack of turnkey properties for sale in the right areas.

There are still great deals out there sitting at 9-10% cap rates but CoC has dropped significantly with the higher rates.

The market overall has slowed a ton but we're still in a strong seller's market here. We've leapt from 4 to 12 median days on market and now have almost 2 months of inventory. My STR cart for Q3/4 has 7 actives with an average days on market of 54 and a median DOM of 28. That's a sure sign that the market isn't reacting well to sellers reaching for the stars. Anything priced well is going quickly, though -- the sale price to list price is still a hair over 100%.

I agree with most of the commenters on this thread.  It's best to value your time and make as few stops as possible.  Spend your decision dollars wisely!

Find a local furniture store that will deliver and set up, preferably free.  And one that has entire room concepts.  That way your room is designed by a designer.  Down here in Tampa Bay and all Florida, really, we have Rooms to Go.  They offer 5 or 6 year interest free financing, too, which helps!

I have had clients that have gone the eclectic and gently used route and it worked out for them but I can tell you they did a lot of work to save money!  Craigslist, FB Marketplace, neighborhood groups. . . I'd rather spend an hour or so and have it magically appear, ready to go.  You'll be doing enough work getting coffee pots and linens and wall art.

I'm against carpet in my area, as well.  But, if everything else is good, I usually advise my clients to go ahead and keep new carpet until it's time to replace it.  Then I would replace it with LVP or tile.

Quote from @Zigmunt Smigaj:

I cant find a STR insurance policy that inst 5000-1000 in Florida (Quote from Proper Insurance), this kills a lot of profit. Who do you use and how much is normal for a Florida insurance policy either as a business through a LLC or personally held as a landlord. And if you've encountered issues with either.

I let all my clients know that insurance in FL is a nightmare, and only getting worse.  It definitely cuts into ROI, but we do have great ADR and occupancy!

Your costs will vary based on your coverage and how much your building's worth.   I have a lot of clients in the West Central Pinellas area.  A lot of them have had good luck with a broker on Seminole Blvd -- Masi Insurance.  I haven't met him, but he's gotten the best quotes for sure.  I've seen others have quotes of 13k that he's gotten down to  around 7k.  For the average house (500-600k), I'm seeing 3,500-5,500 for STR insurance.

Most SFRs that are selling to become STR in my area are selling at around a pro-forma 9% cap rate in my area. I think that would be a great deal, especially if you're selling the business and not just the properties. And especially if the prevailing cap rate is lower than that in your area. To sweeten the deal, you could offer a 30-90 day period where you walk the new owner through running the business.

If you were in my area and selling 6 SFRs with a proven 140k NOI, you should have no problem selling that at that price.

I use cap rates to evaluate all investments. I think it's perfectly fine to use a cap rate for a SFR, even though it's a "commercial" metric. If I'm looking at a 6-unit MFR, or 6 individual SFRs, I want to know which is better in one number! And cap rate will/should include individual lawn service and other things for each SFR, so it should be useful.

Honestly, being so densely populated, with so much business still moving here, it's going to come down to the neighborhoods you're looking at instead of the city/town.  Gulfport is almost small enough to be considered a neighborhood, but it still has areas that will have different appreciation levels.  

The market is still tight enough that I would identify what you're looking for and just start looking at each property that matches.  Check neighborhood numbers for houses that look ideal.

As everyone else has said.  I expect the Tampa Bay market as a whole to continue to appreciate.  And to fare decently throughout the recession.

Quote from @Shannon Smith:

We have $100,000 savings in the bank. . . .

We will have to live off of our checking account and the income from this house for one year until we get a bonus check from work.  . . 

This house is already generating $3,000 per month on just 1 of the bedrooms in a 5 bedroom house.

…but I’m super nervous given we’d be spending all of our savings right now. What would you do? 

That's tight for cash.  The taxes will go up based on the purchase price unless those are the new estimated taxes.  You can definitely spend over 25k in get-ready funds, too.  That would leave you with no reserves for when the water heater pops or something else silly happens.  

Are you not able to live off your income?  That would make me nervous!

The 3k/month probably wouldn't 5x when you rent it as a full house, so don't use that as your estimated cash flow.  Unless you will be renting it room by room.

Nerves are normal for a first purchase.  No matter what it's usually a huge cash expenditure and no matter what research you've done.  But super nervous may be a sign that you should wait for something you're a little more sure of.

Just my 2 cents -- we'd really need a lot more information to give really useful advice.