All Forum Posts by: Tim Bradley

@Michael Cronk Down town Orlando is hard to get cash flow with only 20% down. There are for sure places you can make it work within a 1-1.5hr radius (and I’m sure less) of DT. I just closed on a place in Summerville that cash flows $300+ / month. It was a new build too. I just asked my realtor where the investors are going and he knew immediately. I can send you his contact info if you want. I have used him for my last 3 rentals.

@Geordy Rostad she was just lucky it wasnt a block house.  Also she managed to miss about three different 100+yr old oak trees somehow.  

This story is almost too crazy to believe but its all 100% true.  This was my wife and my 1st investment property.  Technically when she moved in with me we started renting her townhouse she owned out but the property that this "incident" happened to  was bought as a true buy and hold rental.  The numbers on the purchase and rental aren't super important here.  Lets just say it was cash flowing nicely and we had no tenant issues.  One day I get a call from my PM telling me a car had driven through my house.  No exaggeration, a car had literally driven through our house.  The house is on a 90 degree turn in a neighborhood and apparently the driver missed the turn.  It wound up being a 92 yr old woman who basically just shouldn't have been driving anymore.  So the car drove through the house, through the screened in porch and then wound up in the lake behind the house.  Luckily no one was hurt and the tenants weren't home.  Thank goodness too since the woman drove over the bed in the master bedroom!  

These are some of the pictures that our PM sent us so that we really understood they weren't exaggerating.   When we got there the fire department was gone and the house had been deemed unsafe until a structural engineer could evaluate it.  As you can see the woman basically took out the master bedroom and the second story was being held up at that point by a single 4x4.  Now we are only about 1 yr into our real estate investing career here and we have officially had the craziest thing possible happen to us.  

Long story short, the woman's car insurance actually paid for all damages, lost rent and the tenants belonging replacement.  In the end we actually came ahead about $3K b/c the repairs were less than expected.  Additionally the market had seriously picked up in just the 1 yr that had gone by since we rented it originally so we were able to raise the rent by $200.  

Finally, the tenants obviously needed a new place to live.  Our PM company was showing them some places near where the "incident" happened.  Coincidentally we had just closed on another rental in that area and it was available.  The tenants took one look at it and declined.  It was also located on a 90 deg turn.  I mean come on, what are the odds of that happening twice?  Still they decided to pass.

So at this point basically nothing phases my wife and I when it comes to tenant issues. We made it through this within our first year of real estate investing and it didn't slow us down a bit. We closed on our fourth SFH last month and are now moving on to trying out the BRRRR strategy.

@Mitchell Cord Cantrell As with any general rule the answer is it depends. Any property can be cash flow positive with enough money down. So getting twice the amount of rent than what it costs you to own and operate is relative to how much you put down. But lets assume a standard 20% down on an investment property and it's a 100K house.

Mortgage $450 (5.5% rate, 80k mortgage, 30yr fixed)

Taxes $167 ($2,000 annually is what I pay for my rentals in Florida)

Insurance $80 ($1,000 annually again is what I pay)

TOTAL Monthly Expense = $701

TOTAL X2 = $1,402

If you can find a 100K house (that's appraised value is also 100k) that rents for $1,402 that's a big home run. That's not really a thing near me though. For me the 1% rule works best and cash flows positive in my area. The house should rent for 1% of the value of the house. So a 100K house should rent for $1,000 a month. That usually will get you cash flow positive and build up a buffer for any future repairs. So the above mentioned example is still cash flowing $300/month if the rent is $1,000 which is a good return. That's also a 15% cash on cash ROI.

Now there are plenty of ways to get closer to doubling the rent as compared to operating costs but its not easy. You need to buy very under market value houses, or buy then rehab and create a lot more equity than money in. There are probably 10 other ways at least that other people are thinking of to make those numbers happen you said but that's a home run deal and they are few and far between.

If you're only looking for those kind of deals you will potentially never start investing.

@Tom Makinen Metro west works, just dont get too far north into pine hills as that's more the C neighborhoods.  That whole area, Windermere, Ocoee and Winter Garden are all growing like crazy and have some nice areas within them.  Everything is expanding outward from DT orlando and thats in the path west / south west.  Im not super familiar with Kissimmee as thats about 45 min from me. 

As for airbnb I have no experience there or even know someone with one.  I do have a townhouse pretty close to disney though and have thought of it but the cost of fully furnishing a house has kept me out of it.  You can actually see the nightly fireworks from the master bedroom which is a pretty cool feature.  

I live in Orlando and own SFH's in neighboring towns. Technically Orlando is huge so when people say Orlando know that there is a saying "Orlando is an hr away from Orlando." And that's driving 70Mph the whole time. Downtown is a tough spot to pick up something in the 150-175 range but not impossible. You're just moving into the C neighborhoods. I have homes in Windermere, Summerville and Deltona. There is a ton of growth spreading out in all directions from DT Orlando. Something like 4-5 of the top fastest growing cities in america are in central Florida. I just picked up a brand new house for 180K in summerville which will rent for 1500 minimum and cash flow over 400. The deals are there for sure. I have never had an issue with vacancy in the 5yrs I have had rentals. One of my houses is on its 5th yr straight with same tenant.

@Sean Ratcliff I’m very happy with the one I use of you or anyone are still looking. I’m also located in Orlando so can go pop my head in anytime with them if ever needed.

@Eric C. This is a great response. I live right near UCF and also have a rental near Disney so am very familiar with both areas. Everything Eric said is right on the money as far as distance and focus of your business goes.

@Robert Kirkley agreed. If you wind up with 10% of your money stuck and you're still cash flowing it's still a great ROI.

Putting my 2 cents in here.  If you're looking for move in ready, cash flowing rentals and are doing conventional financing with 20% down I would look at summerfield, zip 34491.  Summerfield is right next to the villages retirement community (largest retirement community in the US I believe).  I just closed on a BRAND NEW house there for $176K.  It will cash flow about ~$400 a month after PM fees.  I live almost 1.5hrs away from it and completely rely on my PM to take care of things.   If you're looking for simplicity this is a good place to invest in.