All Forum Posts by: Josh Green

Quote from @Melanie Collins:

Hello Everyone,

Recently last year I sold my home in Lakewood, Co in May just before the market shifted. We sold in three days with a bidding war and over asking price. We are now in Mexico for the winter and have been reading, watching you tube, podcasts, and learning how to analyze deals. I am looking in Denver market and Tampa market at the moment and have a few other markets in mind.

My main question is if you had the funds to buy one large multifamily or three smaller investments for example how would you go about investing as a beginner? 

I feel that I should start out with a smaller investment and build my portfolio from there but have been sent a multifamily in denver area that would take all my funding and a small mortgage as well. We have experience in remodeling as well and are not afraid to take on a remodel.

Thanks

Melanie Collins

 

This answer completely depends on your situation and long-term goals. The easy answer in real estate investing is "more properties/more leverage = better". However, when you dig into it, that might not be the case. Are you financing these or are they all cash? How much cash? Are you living in the property? What's the strategy (BRRRR, LTR, FLIP, BRRRSTR, etc)? Feel free to DM me more details and I can give you some advice based on your situation and can speak to Tampa's opportunities that may or may not be a good fit for you.

Quote from @Dillon Cook:

I have my thoughts on which the fed will choose, but who knows!?  I have a feeling if push came to shove, they would fight a recession instead of inflation and reduce interest rates again.  Inflation is extremely high already.  Interest rates are high, but haven't affected pricing as much as you'd think in the Tampa area.  Is past inflation keeping the prices high amidst high rates?

Kiyosaki recently said our economy is going into an "aerodynamic stall".  Curious to hear opinions bounce around because IF rates were to drop again in ~ a year, that would affect the way investors viewed deals right now.  

The answer is simple: supply vs. demand.  There are various cities in the US that have seen pretty significant declines, but Tampa hardly anything at all.  This is because the demand is still much higher than the supply.  I believe we were slowly increasing in supply in December and going into January, but a sharp increase in buyer demand with that small dip in interest rates in January erased that completely.  I've seen it personally the past couple months - suddenly it has become much harder negotiate aggressive seller credits, showing requests have dramatically increased, properties are selling quicker again, multiple offer situations, above list price offers - all before we had a chance to breathe.  No telling what will happen the next six months, but my money is on a new peak in housing prices here locally IF interest rates drop 1% or more and stay there.  The only way we are going to see prices decline is first seeing the rate of new listings outpace the demand for enough time where the supply is at least 3-4 months (still considered a seller's market under 6 months).  

Quote from @Flue Hasipi:

Quote from @Dillon Cook:

@Flue Hasipi Hi, there are a few areas, but Largo would be my first choice for the flexibility of long to vacation renting.  It's close to Clearwater and within a short drive to the beaches.  If you're living there first for at least a year, I certainly wouldn't do an investment loan.  Get a better rate with some other options.

 That makes sense, I actually like Largo. I'll have to explore the financing options available to me and see what will best work for my situation. Thanks for the tip! 

 I can definitely pitch in when it comes to the short-term rental strategy here in Pinellas.  Largo and Indian Rocks Beach are the "go to" because the laws are simple - it creates a herd and what you'll find often times is the ideal properties in these areas for STRs go quick.  I've done a high volume of these transactions all over Pinellas and I've seen better results/returns when the barrier to entry is even just slightly higher.  Many people go through this thought process when looking for STRs:

"I want a STR because it cash flows so well => an STR has to be somewhere I or a lot of people vacation => disneyland => oh no the prices and margins are too slim, let's try Tampa => this looks good, but there's a lot of different cities and rules => Largo and Indian Rocks beach are simple, I'll do those". Truly the biggest enemy right now and perhaps for a long time is inventory, so I never create a search that doesn't include those areas. However, I would stay away from looking exclusively in those areas for a good STR. There's really good pockets all around Pinellas and if you work with an agent that understands that, you're going to have more choices to pick from.

Quote from @Claudine Stering:

Hello all, 

Just starting out and I've read so many books and still haven't found the right path/advice. I have 25K cash and have been told several 'must do' with. 1) Immediately put in your saving account 2) Put it in a high yield savings account 3) Must age/season for 3-4 months... 

Where do I go to get the correct and best sound advise? 

Thanks much! 

Looking forward to do the 90 Day Challenge! 

Regards, 

Claudine

 Hey Claudine,

It's the time-old tale and question: "what is the BEST thing I can do with "X" amount of money?".  My answer is simple: you'll want to get consultation.  I consult with my clients, because questions like this depend on a lot of different factors.  For example, if you were my client, I would ask a few more questions to dig into your situation more so I can help guide you one what makes the most for your situation (all the while keeping the bigger goals in mind).  Those questions are:

1) What are you short and long term goals (financially)?  How do you plan on real estate being a role in those goals?

2) What is your current living situation, working situation, savings rate, etc?

3) Is your budget balanced?

4) What are you trying to accomplish with that money?  What is your risk tolerance?  What is your investing experience?

5) What options have you explored (financing, investment funds, research/reading/podcasts)?

Those are just some of the questions that would begin our conversation.  Like @Raymond J. Rodrigues mentioned above, this is the type of approach and relationship I like to establish with those I work with.  As a former engineer, one the most important learnings I gained was that you can't solve a problem that you don't understand and that solving problems is all about asking the right questions and making valid assumptions.  Luckily, with $25k, there's not a whole lot of problems to solve.  It's a rather small amount in the grand scheme of investing.  That said, most of us investors probably started with a house-hack around that cash amount.  My first 2 househacks only cost me around $35k and $40k each.  If you're looking for some guidance, especially here in the Tampa Bay area, you can always DM me and we can get on the phone to consult together and see what makes the most sense for you.

Quote from @Dillon Cook:

Hey All,

I am still shocked that so many investors are still looking at SFH, condos, and townhomes to invest in right now. Specifically single families tend to cash flow negative right now once you factor in reserves (which everyone should be doing). A couple ways to get around this will not apply to many investors, but you can buy and live-in for one year with a non-investment loan or househack, perhaps find a BRRRR unicorn, or modify a SFH to do room rentals.

I run numbers and speak with investors all the time and I've found that most newer or new-to-Florida investors get tricked by several things.  One, not realizing the property taxes on the listing are inaccurate to what they'll pay.  The only long term rental type I have found that consistently cash flows neutral or positive are Multifamilies.  

I am curious to hear from other agents and experienced investors in the West Central FL markets.  Are folks just not factoring in reserves to their single families now? Are they unaware of insurance and tax reassessments?  Is there a lot of regret from the last year where buyers find out they are negative monthly?

I think there's a lot of assumptions here in your calculations that might be causing some frustration. With that, generally buying a SFR in a hot and appreciating market that is turnkey with minimum down is going to be tough to get any positive cashflow on day 1. Real estate investing takes more and more creativity than ever to get positive margins in "good" metros and that trend will continue.

Now, there are many many reasons why institutional investors or even newer investors may be buying property that seem to not "cash flow" per your calculations.  

1) They are likely putting more down than you are calculating for yourself.  This is pretty common among seasoned investors and there's been some episodes on BP podcast this past year where you'll hear big investors putting down between 40-60% on properties

2) They have access to better financing terms than you

3) Tax benefits are also almost never calculated or used by newer investors and they are by bigger investors

4) They have access to cheaper rehabs, PMs, etc

5) They may be short or mid-term renting to increase cash flow

At the end of the day it really comes down to the buyer's current cash position, their financing terms, and the opportunities they are willing to take based on their goals. 

Quote from @Michael Foss:

Good afternoon! I was hoping to get some advice on Single Family Rental investing in the greater Tampa area.  I am seeking homes in the $250-350K range and would love some advice on neighborhoods and expected yields when investing in this market.  Any advice would be much appreciated! Thank you in advance! -Michael 

As LTRs and unfurnished, you can expect around a "0.7-1.0% rule".  A couple factors that will really impact your bottom line will be 1) flood insurance 2) home insurance and 3) HOAs.  Vacancy rates are going to be best in Pinellas and Hillsborough but much of manatee and Pasco counties are still really good.  

I would be happy to help further if you want to dm me some more specific questions and I can give you more specific direction based on your goals and current situation.  

@ray above is an excellent lender too that I'd recommend to anyone to get some rate quotes.

@Jayleen Soto

A house-hack is the ideal way to start 9/10 times. I do a lot of them here in the Tampa Bay area and while inventory is low on MFRs, there's other opportunities. There's various ways to meet or exceed your numbers goals depending on your comfortability to profitability scale. I also got a good lender for you and that would be one of your first steps to see what options you have loan wise. You may be able to qualify on some awesome grants depending on your income or occupation. Let me know if you want some more input!

@Gaurav Mehta

You'll be hard pressed to find a better place than Tampa Bay for the next 10 years ok appreciation and also still cash flowing well.

@Dmitriy Koval

DM me I got a good one

@Amanda Durso

My brokerage has a lending department and is looking to onboard more private lenders. DM for info!