All Forum Posts by: Parmesh P.

My opinion is, don't do this deal in this depreciating market. There are too many uncertainties in the present market to have a projected profit that small. If you apply the 70% rule, based on your data, your purchasing price has to be $170K. (70% x ARV – repair cost). This is just a safe way to analyze your deal but you have to do all your homework.

Hi Dave, all the replies are on target. Never bypass your property manager and speak directly with your tenants. This will diminish the ability of your property manager to manage. You can create a form that that tenants can use only in event that the PM did not address an issue that needs immediate attention.  This can go directly to you and the PM. 

Thank you Brent. I appreciate the recommendation. 

Hi Jeff,

I am from NYC and like your area, the prices are through the roof, but the returns are still better than the STR in Kissimmee. I start following the STR market in a number of resort areas in Kissimmee since April. The 7bd 5ba are among the best rental units in places like Solterra resort, Windsor Hill resort, Emerald Island resort, Solana resort and a few more. The price point for 6 and 7bd turnkey properties is between 650K to 750K and for the ones that need repairs and furniture, the price point is between 590K to 650K. I view ten properties last month and made over 15 offers with 40% down but was only able to get the turnkey properties down to 595K-638K. Yes, this shows sellers are gradually moving to accept the new reality and so waiting, especially in all the instabilities surrounding us right now, may be a better option.

Like so many others pointed out, Kissimmee is close to a point of saturation and very challenging to stand out. Pulte alone has about 100 new houses under construction. It is hard to be very conservative on CoC entering a depreciating market. I am not aware of how much research you have done so far but here is a quick way to understand the market is still overpriced to be a good investment in Kissimmee. The average expense for a 7bd is about $3,125. (HOA 420; INS 250; Gas, light, water 550; Taxes 510; pool 110; pest 35; full management 900; maintenance 250). If you are looking for 7% CoC and 7% for loan, then that would be (7% of 600K) another $3,500/month bringing your monthly payments to $6,625per month. The average income on a 7bd is $6,250 per month (75K per year). Now, STR is a business model where you have to pay quite a bit of taxes. This may just break even or leave you in the red.

Why are houses still going in contract for 600K plus? Many international cash buyers find this investment a lucrative way to preserve and grow their cash in places with worst economy and inflation. My suggestion is to buy a 7 bedroom 5 bath for no more than 525K in this area. I am in the same boat as you, visiting Disney twice per year and feel this would be the best way to invest but the numbers will not add up at the current price point. I hope this helps.

I am in the process of purchasing a STR property in a resort in Kissimmee. I spoke with a few management companies but would like to know if anyone has STR in Orlando area and may have firsthand experiences with management companies? Please share.

I do agree with Karl. I usually put 5% of the gross income for maintenance if the property is relatively new and around 15% for older properties. Use the internet to look up rentals in the area for similar homes and make a sensible judgement based on that. You may also use bigger pockets tools to get some idea what the rent should be. As for vacancies, make sure you have a few months of mortgage put away. You may also choose to put aside a percentage of the income until you have six months of mortgage put away.

I stayed in three different STR in Kissimmee Florida and all of them has washer and drier. I did not feel comfortable with the sheets after the first night and I wash them the next morning. I really think it should.

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Is this a good deal?