All Forum Posts by: Rob Drum

Investor-focused stats on the Sarasota and Manatee County real estate market.

- How much of a buyer market are we in? Latest MLS Stats.

- What are home builders doing? New home building permit tracking.

- What's happening with mortgage rates and the yield curve? Tracking changes in the debt markets.

@Denis Orlov I don't do STR, but I've rented one of my personal properties for arbitrage before.

Like everything in real estate, it comes down to negotiating a good deal upfront. From what I've seen in this area right now, it seems like you'd have a hard time paying market LTR rents and making a good spread. 

Also, I've always wondered why arbitragers don't negotiate an option to buy upfront? It seems like a major missed opportunity. There's long-term money to be made on that strategy.

@Ryan Johnston A couple of questions worth asking.. Is $150 negative cashflow a lot for you? Is this your only rental? How much did you put down when you purchased it? 

If you put less than 5% down, your return on equity is likely sky-high. You've got to include loan pay down, appreciation, and depreciation in your return calculations.

The point of cash flow is to keep you safe. If you can cover small negative cashflow without destabilizing yourself or the property it's not a problem IMO

@Ian Bollinger I'm in Lakewood Ranch. There are a lot of new townhomes being built here. Some have really good builder incentives right now. There's also a lot of mid-term demand in this area from people moving down and waiting on their home to be finished. I'd say most people in my neighborhood rented for a period before moving in.

Quote from @Edreco Amos:

Quote from @Rob Drum:

I’ve owned a condo and Tampa, and two houses down the west coast of Florida the last two years. Insurance and storms hit everything hard, but you can really see the buying opportunities further down the coast. Better potential for current cashflow and you can definitely find discounts to “market top” pricing as you look South from Tampa.

 Thanks Rob. As far as the coast goes, what are your thoughts on LTRs? I'm skeptical because of what just happened with the flooding that happened as a result of the hurricanes. I think fix and flips in those areas would probably make a little more sense. Sell and get out.

I’d say LTR’s that fully cashflow are still tough to find. Easier as you go South. 

The flooding cuts both ways.  there are a lot of projects just waiting for someone who wants to renovate, they pretty much have to sell to an investor, so good opportunities. On the other hand it backs up inventory, which hurts prices in the short term.

I’ve owned a condo and Tampa, and two houses down the west coast of Florida the last two years. Insurance and storms hit everything hard, but you can really see the buying opportunities further down the coast. Better potential for current cashflow and you can definitely find discounts to “market top” pricing as you look South from Tampa.

Quote from @Diana Teng:

Hi all,

I think my question above is pretty direct.

I'm interested to buy my first rental property, and after doing a brief search I see that there are quite a number of places out-of-state (I live in NY state)  that offer affordable homes that deem to be in hot market areas right now (according to many different articles online). 

However, because I am unable to make trips to scout locations or look at homes in person. I know that finding a team is crucial, and not sure where to begin on this. Have you guys ever purchased a property without physically seeing it? I just want to know if this is a good idea ? And if you guys know any hot market places that will appreciate greatly, I would love to know! 

It’s possible, but I wouldn’t advise it. Way too much risk. I have worked with a number of investors who never came to visit, and had success but it’s the exception not the rule. I’ve met soo many OOS investors who lost money buying D class houses, someone sold them as B class.

The ones who have success from out of state without coming talk to at least 10+ locals who really know the market to triangulate their information.

I self managed units 1 through 5, and learned a lot. Learned the value of a good PM for sure. I was more focused on building the portfolio, and it paid off, as I scaled to 50+ rental units in 5 years.

I started my own PM when I moved to a different market because I wasn't confident I could find one as good as my previous manager. I've used probably 6 different managers in different markets and only 2 have been good.

For me, the cleaving question is, "Can you make more than $50-$75 an hour doing something else?" If you can, then you should probably hire a manager. Also if you have significant wealth, using a good PM mitigates potential risk and headaches.

@Kyle McVay I self-managed my first 5 units and then transferred all new units to a PM. Now, I run a PM company. Different phases of the journey I guess :)

By starting with self-management, I definitely learned to appreciate what the PM was doing for me. I've used five or six different PMs in different markets. Only two were good. My advice would be to use a PM only if you can find a great one!

@Ariel Betancourt Just don't be intimidated. Everyone is there to learn and connect, and everyone started out with no experience. There's a breakfast meeting at Pop's Sunset Grill in Nokomis every Tuesday at 8am. I'll be there this week. Feel free to reach out via DM or text if you think you'll go.