All Forum Posts by: Seth Nadreau

Welcome to Naples and to BP!

As a local real estate lawyer, I'm a fan of Kevin J (not gonna try to spell his last name) out of Fort Myers. His site is below. Hope it's OK to post. 

https://www.kfjlaw.com/

On the appraisal side of things, I'm used to inspecting these while tenant occupied. More and more purchase and refinance work has been coming down the pipe where I can get in with a lockbox code. It's unfortunate for the investor, but does make scheduling much easier on my end. :-/

Cash flow is #1 reason for investing in Cape Coral right now. Rental rates continue to outpace housing values, which means the gap between income and expenses is notably increasing. Additionally, they have restarted the public water/sewer expansion project and will have most of the city on pubic utility within the next 10 years. This is hitting the NE Cape hard now and homeowners are being hit with $25,000+ in assessments. Many are selling to avoid this which is creating a small pocket of increased DOM with decreased values... and buyers are willing to eat 40-60% of the fee as they can put it on their tax bill for 10 years. 

As for underwater, never fully trust info from third party sites. It's mostly unverified. As far as Lee and Charlotte Counties go, it seems that most people that are still underwater are underwater because they've stacked HELOCs or second mortgages on some properties or they've simply stopped paying years ago so their banks have levied heavy fees, fines, etc. on top of unpaid principle.

On the appraisal side of my work, I have lender clients who have ordered drive-by appraisals for pre-foreclosure properties since 2012. Yep... once a year, I value the SAME pre-foreclosure property for the bank. 

@Gene Maltsev This is south Florida... almost everything is on one level. No basements or lower levels here unless your buying a raised cracker-shack. Honestly, most buy and hold properties don't need $25,000 worth of work... and that's what $25/sf on a 1,000sf house comes too.

If you're flipping, you're certainly higher than that $/sf... but for a buy and hold, that's not unreasonable. Keep in mind this is Florida... materials and labor are relatively inexpensive. I did my entire kitchen myself. Cabinets cost $1,800. Granite cost $1,700. Appliances cost $2,800. Do the math. :-)

@Gene Maltsev Cape Coral itself has no beach access (although there's been talks about one for years). The nearest beach is Fort Myers Beach which is between 20-60 minutes away depending on the time of year. For $400,000, you can pick up either a 1960s wood framed duplex, 2/1 on each side, within walking distance to the beach in Fort Myers Beach... or you can get TWO 2000s concrete block duplex, 3/2 on each side possibly with a pool or fresh water canal view, located near all amenities but a bit further to the beach. One cash flows better. 

Location to the beach isn't as much of a dominant factor as one might think. The whole area is tropical-ish and there is so much to do that a family coming down for a week may hit the beach once or twice, catch a spring training game, go to the water park, go to the zoo in Naples (50-60 minutes away), explore Sanibel, try a different beach (Englewood or Barefoot... both 60 minutes away), walk the streets of historic downtown Fort Myers and enjoy one of the many craft breweries or distilleries in the area.

Sorry... put my broker hat on for that pitch. :-)

@Nick Rutkowski Sounds that way. Fire him! :-)

Tax assessments? Not sure about your local market, but here, the run about 70% to actual value. With "Save Our Homes" caps on tax increases, the market is far out pacing those. As for sales reported in the local county/town appraiser's office. Those aren't a terrible way to go if you have an easy search system. Locally, our search runs a year behind... so all comps would be old. 

"Here" would be pretty much the entirety of SW Florida from Sarasota down to Marco Island. As for occupancy, it varies greatly based on management. Vacation rental owners who utilize full service rental companies usually do better than those who use realtor friends or VRBO... although a good management company will have a property marketed across all platforms including VRBO and AirBnB as trends are shifting this way.

As for determining projected revenue, this is one reason I strongly encourage buyers to consider grabbing a property that has been in a rental program. Those numbers become much easier to determine if a property has 5 years of history.

If you like Marco Island, you might also want to consider Sanibel Island. Completely different vibe, but very popular for summer rental programs given the beaches, greenspace and small town charm.

@Gene Maltsev Thanksgiving to Easter-ish is prime season here. Figure you get a bit over 5 months. However; we have sunshine year round... so even in the 100 degree dead of summer, you can rent a pool home out to someone. The weekly rate usually drops by 30-40% or so... but  someone who knows what they're doing (or has a good management company) and has a good property could expect to see occupancy for at least 250-275 days a year.

PS... GO SOX!

Markets vary (as do the skills of appraisers), but I can almost assure you that an appraiser can get you a more accurate valuations every single time. It's not a "bank appraisal", it's literally someone educated and experienced in that field analyzing the best comparables. I'd happily put up the comps in my reports against the comps an eager FSBO seller pulls of Zillow every single time.

Also... an appraisal IS market comps. Not sure what your appraisers are doing. ;-) 

As a certified residential real estate appraiser here in Florida I can state with certainty one of two things:

1) Most FSBO transactions I appraise are grossly under-priced to the point that the cost of a qualified real estate agent would have netted the seller a larger sum.

2) Those that aren't under-priced are often overpriced and do not appraise.

That said... if you plan on going the FSBO route, I STRONGLY recommend having a full appraisal done prior to listing. Zillow is usually NOT your friend.