All Forum Posts by: Samuel Ruelke

Hi everyone!  I hope you all are doing well during these trying times. I wanted to make a quick post about a couple off-market properties in the Orlando near one of the local colleges here. I think this is the proper location on the site to make a post such as this... however, if it is not, my apologies, and I will do my best to correct it.

So, onto the details: For those interested in the Orlando Florida market, I've been made aware of a couple town homes being offered for sale off-market in the Somerset Chase community directly across the street from Valencia college. Both properties are currently rented until the August 2021 time frame. The sellers are looking to sell to another investor(s).

Details of the units:

Unit A - 4/2.5, 2 story, 2 car garage, upgraded kitchen, LVP on stairs & 2nd floor, tile on first floor, new ac coils, new washer/dryer. Rented for $2100/month. The asking price is $270k (cash).

Unit B - 3/2.5, 2 story, 1 car garage, new ac unit, new fridge, new water heater, LVP on stairs & 2nd floor, upgraded kitchen, upgraded half bath, fenced backyard. Rented for $1700/month. The asking $230k price (cash).

If you are interested in either of these properties, have questions, or would like further details, please send me a direct message. I'd be happy to discuss!

Hello BP guys & gals, I have a quick question regarding homestead exemption on a house hack property. 

I am currently house hacking in Orlando Florida; 3/2 SFR. This is my first time owning a home and it is my primary residence & will be for the next year or so most likely. I'm living in one bedroom & renting out the other two.

My question: Can I still claim homestead exemption on the property even though I'm renting out two of the bedrooms?

In addition, there is a portion of the homestead exemption application in my county that asks the following: "Is any part of this property rented or leased? (Yes/No)"

How should this question from the application be answered? I do not want to lie, but is a question like that on a homestead application valid to ask? This will be my first time applying for homestead exemption and don't want to start off on the wrong footing.

Thanks in advance!

@Diante Lawrence

I'm currently house hacking in the Orlando area and looking for a CPA to help me with tax time. Would you be willing to share your CPA's info with me?

Investment Info:

Single-family residence other investment.

Purchase price: $255,000
Cash invested: $14,000

House hacking a SFR that needs a little work. Slowly making improvements while roommates cover ~80% of monthly expenses. Awesome location to my place of work (~5miles) and close to all the theme parks & most other attractions in the Orlando area.

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

Listening to the bigger pockets podcast and money podcast

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

Found the deal on the MLS and negotiated the purchase price slightly but negotiated heavily with the closing costs and fees. Had the seller cover the maximum amount allowable to minimize upfront out of pocket expense.

How did you finance this deal?

First time homeowner loan through conventional means (not FHA)

How did you add value to the deal?

Adding value through home improvements.

What was the outcome?

TBD...

Lessons learned? Challenges?

Lessons learned so far: be patient when searching for the right property, pay attention to seemingly "minor" issues during the home inspection, more lessons on the horizon....

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with a real estate agent and a mortgage broker in the Orlando area that i would certainly recommend to others.

@Andrew Schaefer Thanks again for the detailed response, awesome feedback. That would be great if I could find a similar property from a numbers perspective. But as you said, in today's Orlando market, the majority of properties are more probable just to break even (or slightly negative). So, are you saying that your property would generate $400/month over your monthly PITI as a SFR & $800/month over your monthly PITI as a duplex/triplex?

Don't be in a rush to buy. Do the numbers IN WRITING like a business if you intend to treat it like one, even if it's house hacking and not a 100% rental. Then before looking at specific properties be sure to have a pre-approval letter with a local lender in hand.

Running the numbers in writing like a business is actually the exact perspective I've being going on. Each property i find that looks like it may be viable, i run a report on it to see what the numbers actually look like. Understandably though, i'm sure some of my numbers aren't entirely accurate due to a lack of my own experience, but they're to the best of my current abilities based on data gather from BP and trend averages that others have seen.

Be honest with yourself that you're betting on price appreciation and hedging against inflation because the neighborhoods with a large share of 30-somethings renting or owning in it that are fairly safe are going to be about break-even with rent prices at best. As long as you're OK with that offsetting of various risks depending on where the local market and local economy trend then I'd still consider buying. But don't do it if you're looking to simply earn a return on your money; you're house-hacking to make your cost to ante up to buy into the market less than the alternatives of either not playing or buying elsewhere with a higher ROI but still paying a variable rent for your own personal residence.

My goals are to play for cash flow and ROI. I only want to look at appreciation as the "icing" on the cake (unless we're talking forced appreciation). But I wouldn't think it to be a smart move on my part as a beginner to play around with swings in the market and bank on them. I'll keep my head up for potential properties that may pop up.

Thanks for being honest and sharing!

@Andrew Schaefer Thanks for the feedback!

I am new the REI, so no, i have never owned real estate before; not even a primary residence. I am currently renting an apartment with some roommates.

I live and work in the Orlando area (currently residing in downtown and working near the attractions). 

I was hoping to "house hack" my first property (preferably a small multi family; less that 5 units.. but a SFR would work as well).

I only want to buy in an area that i would live in myself, i dont have high standards but i dont want to live somewhere of poor quality or in a dangerous area either. 

From what i'm seeing, alot of whats on the market right now doesn't make much sense from a numbers perspective. Is that something that you're seeing as well?

And when you say short term rentals, do you mean vacation rentals & Airbnb?

@Sam Shueh Thanks for the response! Could you explain a little as to why the 1% rule does not apply anymore? I'm curious as to why that would be.

@Chris Grenier Thanks for the response!  I'll take a look in those zip codes to see whats available there. Do you have any rentals in the Orlando market?

Hi everyone! 

So I've heard about the 1% rule & 2% rule (or guidelines) when purchasing a rental property: the monthly rental rate should be 1%-2% of the total amount you have in the property to make it a good investment. 

From those who have successfully invested in the Orlando area, what kind or percentages are you seeing (if you don't mind sharing)? And where in the Orlando market are you seeing these percentages?

I still haven't purchased my first property, so I'm trying to get a feel for what I should be looking for when looking in the Orlando area.

Thanks in advance!

@John Leavelle

1. Gotcha. I should go ahead and give some HML's a call then to see what the norm is in my area. I normally never plan for best case scenarios and always air on the side of conservatism. But I don't know what I don't know. Continually learning! Thanks for the heads up on that.

2. So are you saying it is typical to compensate contractors for their time spent walking through a property to provide estimates for rehab? but also typical not to compensate them if they give you a bid that you intend to use in the near future?

3. Right, I have heard those "rules of thumb" discussed often on the BP podcast. Thanks for explaining it a bit further.

4. What do you use to calculate and account for all costs associated with the BRRRR and/or flip strategies? Do you have a spreadsheet of everything that comes into play?

Thank you for your extensive explanation of holding costs in addition to rehab costs. I hadn't thought of those, and I can see how it could for sure blow the cashflow for the first year or two. 

Do you have any other useful tips/advice when approaching a deal with the BRRRR strategy?