All Forum Posts by: Matt Leber

Investment Info:

Single-family residence buy & hold investment in Melbourne.

Purchase price: $95,000
Cash invested: $29,000

Found this deal for sale by owner in early 2020. Rent/purchase price ratio is 1.45% with partially guaranteed rents from Brevard County section 8 program. The home is in great shape and a better neighborhood & street than I initially thought. Multiple applications received in the first weekend.

What made you interested in investing in this type of deal?

Single family properties in Central Florida listed under $100K are usually in bad shape or a bad area. This one was in great shape and I have had no issues with the neighborhood. Rents in this area are well above 1% rule for this home.

How did you find this deal and how did you negotiate it?

Zillow, it was a FSBO. Offered $4K below asking and seller accepted.

How did you finance this deal?

25% down conventional 30 year fixed mortgage @ 3.75%

Just closed on our 7th rental on 2-14-2020. The property is in Melbourne, FL. For the last year, I was having a hard time justifying market prices in our area and how thin the margins would be on properties I was analyzing. In January, I stumbled upon a For Sale by Owner in Melbourne, FL that was listed at $99K. This really caught my eye because its really rare to find properties in Central Florida under $130-150K that aren't in a terrible area or really bad shape. However, this property was in surprisingly good shape, with not much work needed other than an inside paint job. We offered $95K and the seller accepted. I was planning to list for $1200, so we were well above the 1% rule, which has worked well for us in the past. However, when I called the Brevard County Housing authority, they told me they would approve my rent for section 8 at closer to $1400! On top of this good news, I found a local credit union through a friend that offered us a 30-year fixed rate mortgage at a very low interest rate, 3.75%! When I ran my initial numbers to evaluate the deal, I ran them conservatively at 6%. So, this low rate approval was awesome news! In then end, we are listing our new property at $1375; and after setting aside 5% for vacancy, 5% repairs, $150 capex, and paying PITI, we will cash flow about $450 per month on this property. Over a year's time, that is above 15% cash on cash on our capital invested.

Does anyone in Melbourne Florida (Brevard County) or nearby have an insurance company that will underwrite aluminum wiring as-is?

If not, does anyone have a contractor they would recommend to remedy aluminum wiring through copalum, alumicons, or pigtails? Was this insurable after the fix? Would prefer not to re-wire the whole structure.

Thanks,

Matt

Keyword alerts have been fixed!!!

Hey Guys,

My wife and I just got a deal under contract in Melbourne FL. I plan to make it my first Section 8 rental by getting it listed through the housing authority. Does anyone here have experience or advice on section 8 (screening/tenants/process/inspections, etc.)? Any lessons learned that you would like to pass on? Appreciate it!

We are somewhat experienced as we have now done 7 deals, but this will be the first section 8 property. Any advice is appreciated, even the ugly stuff. Thanks!

@Michael Sato any word on when the big fix will come through? I would like to have full use of the app again. I’m sure I’m not the only one affected by the bug.

Hey All - I’ve been having some issues with the iphone app lately. None of my keyword alerts are loading. The keyword alerts tab just looks like a bunch of blanks. It appears my votes, colleague requests, and mentions are functioning properly. Has anyone had this issue before or been able to resolve it?

I have already tried deleting and re-downloading the app, deleting and re-inputting my keywords with no luck. The issue is really cutting down on my ease of participation in the forums.

@Craig Miller welcome! My wife and I live in Orlando and have rentals in West Melbourne & Port St John (Cocoa). Brevard county is a great place to find a deal. Best of luck to you in your investing & learning endeavors.

Welcome! My wife and I live in East Orlando but invest in Brevard! We have properties in Port St John and West Melbourne. Good luck with your investing journey!

@Lola Brown yes, technically in a lot of towns it is a code violation to have more than 3 unrelated persons in the same dwelling structure. I went to college at University of Florida in Gainesville, FL, where this restriction exists. However, there are many landlords in that area that rent houses to college kids by the bedroom with 3+ unrelated persons in the home. As far as I understand, as long as the unit is not troubling the neighbors or causing issues, code enforcement will not be an issue. But there is still a small risk. So, yes I have heard of this restriction (or similar restriction).

I personally do not have any rentals that fall in this category, but you should be aware that there is indeed a risk present if you proceed. But, there is some risk involved with most real estate investing.