All Forum Posts by: Seth Nadreau

Avoid Condo-tels at all costs...

If you are an absentee owner, I STRONGLY encourage using a trusted and reputable vacation rental company. Any good realtor could point you in that direction. Expect to pay 30-40%.

From an investment perspective, if you're not earning at least 8% annually on your money, you are wasting money. Investing it elsewhere could be more beneficial. 

If the property you buy was in a rental program, that income could be used to help qualify with your lender.

Dupaco Credit Union (up in Iowa) is lending on purchases here in Lee County. I've done several appraisals for them. Not sure what their vacation rental lending looks like... but they are lending down here, so that may be a good start.

Quality makes a huge difference. In some markets, basic tile and HD formica is good as anything better than that would over-improve the home.  Some markets, high end finishes are a must for top dollar. I'd consider $18/sf on an average 1600sf CBS home to be reasonable.

Like Jordan said... varies GREATLY with the property. 

The realtor in me cringes... but the investor in me tells you its not that bad to do it without a realtor as long as you get a deal on the property. The benefit to the seller, is that they save on commission... so they should at least cut a bit of that off the price, right? 

That said... 

Get financing approved.
Write a contract (can find a state contract online or make one!).
Get either a title company or real estate lawyer involved to handle title and closing.
Get an inspection done (I can't stress that enough!)
Buy the property.

Enjoy.

Hi Marian.

I think many here will agree that perhaps the BEST course of action is to find a portfolio lender in your area, put on some nice clothes, gather up your plans (and financial data) and go talk to them.

Portfolio lenders don't sell off their loans on the secondary market, so they aren't as restrictive. Realistically, they are business men and women and if a deal makes sense and there's enough collateral, they'll do just about anything.

Start with simple google searches. If you have no luck, research "community" banks as these are usually the portfolio lending people.

You may be surprised with what they can do for you. 

Hi Noelle! Awesome to hear you have a path, some drive and some realistic expectations. 

As for education, my honest reply would be to go to school for whatever makes you happy (whatever you might want to do for additional income). An MBA is not bad, if you want it and if it helps you. If it doesn't help you, then you're really just starting your investment career in tons of debt.

I find, in most cases, a good mentor or investment group can provide so much more real world experience than many college courses can... so if you're going to spend the money, do it on a field that interests you... because you can be an investor AND be a doctor, lawyer, realtor, burger flipper, etc. The end goal is income and net worth, so make sure you start that off right. 

I regret not stepping for in college until I was 33... but I own an appraisal company now, have a broker's license and mentor realtors and entry investors. I went the cheap route, and it paid off... eventually.

From my outside perspective, the MOST important thing you can do, is save money. If you want to buy a multi-unit property, many lenders will require 20% down. Sure, there are programs and sharks... but a good down payment will decrease total expenses over time and lead to higher (and faster) returns.

Congrats and good luck!

Welcome to BP! I love seeing Florida represented!

Hi Will. Rental rates are through the roof right now, so a buy and hold on this type of property is a rather sound strategy... even if using a third party management company. That said, there isn't a TON of inventory and most of what is available is typically in the 8-12 unit range in a higher risk area.

As for neighborhoods, I'd prefer not to post too much publicly as the area is rather geographically large and it's hard to get to specific. Your best income is going to come from your not-so-best neighborhoods... which is also where you'll find most buildings with more than 5 units. Feel free to send me a message or email  with more specific concerns and I'll be happy to give you some honest feedback/advice.

Full disclosure, of course... I'm not investing at the same level you are and I am licensed as both a broker and an appraiser. As much as I wouldn't hate earning your business, I'm also available to answer any general or specific questions you may have as I've lived here since 1996 and my real estate team has tons of experience.

Curiously, any interest in nightly/weekly rentals? I've got a lead on an 18 unit motel property with manager's quarters that is coming up for sale as the owner/operator is retiring. Looks like a 12-13% cap.

I would like to think that if you are using a rental agency and paying them 30-40%, they would already have a cleaning crew at their disposal and you wouldn't need to do this legwork. Am I missing something?

NW Cape is 33993

SW Cape is 33991 and 33914

NE Cape is 33909

SE Cape is 33990 and 33904

Pine Island Rd is NOT the dividing line in the west... Embers Pkwy is.

Buy and hold:

Gator Circle

Punta Gorda

Diplomat/Tropicana

Burnt Store Corridor

Orange Grove (North Fort Myers)

These areas have the highest rates of returns as rental rates play well against purchase prices. As for flipping, unless your OK with a 10-15% profit, it's not really a flippers market any more. Sales prices are seeing higher lows and lower highs which is closing off the margins.