All Forum Posts by: Kevin Koffman

I just tried to buy a duplex in near Victoria Park, it was actually 2 blocks North, in a cheaper neighborhood but on Victoria Park Road. It was $400k for a 2/1 and a 1/1. The rents were $1350 for the 1/1 and he said you could get $1500 for the vacant 2/1. 

I just had a hard time making the numbers work. It needed all new hurricane impact windows (replacing Jalousie) and a new roof, current roof 50+ years old, but the place was beautiful inside with quartz kitchen etc.  
The person I was bidding against was also offering full list price.  I got it under contract, but In the end, I walked.

I'm currently under contract on a 2/2 condo in Coral Springs for $138k which also rents for $1350 and has a $290/mo HOA payment.

I look at it like this:

$138k for $1350 rent vs $200k for $1350 rent. ($200k is 1/2 the duplex price). 

Although the “Victoria Park” duplex had re-development potential (townhouse) because of the large yard, excluding that, since I don’t want to get into new home building, doesn’t the condo seem like a much better deal for return on investment?

Since there has been so much appreciation in Victoria Park already,I don’t see how new buyers can make good cash flow. I read Another BP investor got a nice 6-plex in the same neighborhood, she made it work by putting 40% down. 

I think you will need to put at least 20% down to get a break-even or positive cash flow on a multi-family in the cities you mentioned. 
I have owned duplexes in Coral Springs before, I did very well. but right now, I can’t seem to make the numbers work for multi family in any of the cities you mention. I really want to buy a multi, but condos seem like a better value. 

Congrats!!

I too would be interested to hear about the property analysis. What area? And will you manage it yourself?

12 doors... that’s impressive! Way to go!

“If you can pull it off... then go for it”. Exactly right!

The investment is not risky, the risk is all on the investor, Especially in this case. People buy 4 bedroom houses in FTL all the time and have no problem. The question is, how will it be for you?
Do you have experience in transitional housing? Have you collected rent from people you have lived with before?
Sounds like there will be plenty of people issues, compared to property issues.   If your comfortable with the process of dealing with that many people and you can collect the money and deal with it all, then go for it. 
I just spent 3 to 4 days turning over a property, it was a lot of work. Worth it? yes. Because my last tenant was in there for 10 years and paid rent on time every month and never complained.  But, You are in an entirely different, high effort situation. Make sure the numbers you have on paper are worth the effort you will be putting in.  It sounds more like a small business than a passive investment.  Just think of the accounting alone.  You should demand a Much, much higher return than a passive investment for the higher effort required to pull it off. 
I would not recommend what you describe for a first investment. Maybe a few, 2 or 3 roommates, but not 10 random people in one house. But that’s just me. 
Hey, If the return is high enough and your willing to do the work, go for it. 

Give us an example of the best 1 or 2 properties you are considering. So we can see the cap rate, cash on cash, and purchase price, etc. 

Also, you could look at metrics outside the property itself. Such as, your cash reserve after purchase, how long / how easily could you afford the property without a tenant. The amount you’re using for upcoming repairs / cap-ex. Etc. 
Then we could help you analyze your risk level.

Wow... like... good answer, man. And right in the middle of tax time, too. 

If are looking for a 3/2 house under $200k (not easy to find) with 20% down in Fort Lauderdale, that even comes close to positive cash flow, it will not be hassle free. It will either need major renovation or be in a rough area.  Or be in a town just outside Fort Lauderdale. 

@Ali Sardar, I live in Fort Lauderdale and have been looking for something similar for the last few months.  I have seen 1 or 2 deals on Zillow that I thought were good.  They were not positive cash flow with 20% down, but were great rental properties otherwise.  I went to see them and they were gone within a few days.  They ranged from One that was a $147k condo and one was a $1.1M apartment building.  They were both purchased with all cash by someone other than me a few days after listing. So it’s a hot market for good deals. But  investors with lots of money are playing here. Also, we are very late in the market cycle. So I would only buy with enough money down payment to have positive cash flow. 

It may be much easier in FTL in a year or 2 when the 4 or 5 buildings with 100’s of units each are finished being built.  If not enough demand, Could cause a slowdown and prices to come down a bit. 

Right now in Ft Lauderdale, we are late in the cycle, prices are very high and the market is still hot. 

More Millionaires were made through real estate...

I can assure you, making a 5% to 7% cap rate and dealing with tenants is NOT a way to BECOME a Millionaire. It’s where investors who are already millionaires *might* park their money with a good property manager, to keep (diversify) their money. 

If you’re new to real estate, and want to be successful in South FL:

1) know where we are in the cycle and buy right, your money is made on the purchase, not the sale.  

2) know your neighborhood and values 

3) be thinking about an exit strategy, what’s your “make me move” price. 

(And this is coming from a buy and hold investor...)

4) and last, get a good return (aka, cap rate) for your holding period. 

Because, the South Florida market, sell prices fluctuate so wildly compared to relatively stable cash flow markets like the mid-west. 

Cap rate is very important, but here in S. FL, it can be swamped by price moves. 

Example. I bought a condo in Coral Springs for $35k, sold it a couple years later, no renovation, just paint, for over $100k. Now you can buy it for $85k to $90k, 2-3 years ago it was going for $45-$50k. 

The cap rate is important while you’re holding the property, but when it’s time to sell, making or losing $50K in 2 to 5 years time will make all the difference. 

You need to buy in the right year, use patience and negotiating skills to buy it right!

Ok, so it's 2018, how's it going? Any progress? Curious. 

For short term rentals, I can think of no better place than the Keys. Key Largo is easy to get to and has plenty of diving, boating, fishing, etc.  And there's Key west if you really want to go for it. 

Also "the Keys" are not on "the list". 

And, If your investment doesn't work out, at least you'd have a killer vacation place when it's vacant. But if you buy it right, you'll have a FREE vacation home. :)

P.S. My favorite city on the list is Juno Beach. Just look at that picture. And the weather is great there. Job opportunities are not as good as he bigger cities, but "IF" you can work from home Or in any city, I'd pick Juno. 

I have lived in most cities on the list north of Hollywood. I currently love living in Fort Lauderdale as my favorite "big city" to work/live in.