All Forum Posts by: Zach Kidd

It all depends on the specifics of the situation, and those are the one thing that you need to know everything about.

It is a difficult problem, but that's where the seed of opportunity is.

Who owns it? Private individual? Bank? City? Is there a property tax lien? Other liens? Is the city demanding demolition? Why? How much to get it out of hock? How much paperwork / red tape? Etc.

Everything else is easy. Seriously. A wholesale deal is much simpler than digging this information up, right?

If the difficulty level and potential profit are good, move forward. 

If not, you will have put in a few hours to know that it's not worth it.

Those few hours of work are peace of mind - no regrets either way.

You're quite welcome!

I would absolutely dig deeper.  Don't make me drive over there and scout the neighborhood myself, lol!

It won't take long to find out the HELOC amount / situation, and it should be pretty easy to find out the total amount of the city fines.

From there, you should have a starting number and a guesstimated difficulty level.  

If you don't get to this point, you'll always wonder if you missed out on a deal. 

Check the options, both good (wholesale and make $15k) and bad (everything goes south and you're stuck with an overly expensive lemon).

Then you have to make an informed decision. 

Does the potential reward outweigh the potential risk?

Hi Sonja!

You specifically mentioned the Disney / Universal area.  I'm sure it's obvious that the surrounding areas have been in high demand for decades.  

Finding a good deal in those areas won't be easy or inexpensive. Despite the demand, the cash flow won't be miraculous either.

If proximity to the House of the Mouse is critical, then you will need to be prepared for a ton of research, higher price points for close proximity, or lower price points for a longer drive, etc.  

Please, please, please research thoroughly before considering a property, especially near Orlando. (FYI, Disney is officially located in Lake Buena Vista - huge difference between there and Orlando).  A property may photograph nicely, and the mileage might be right, but you don't want a neighborhood that requires a police escort in and out of, right?  Even then, take a, ahem, "business trip" (aka vacation) and do your own driving. 

On the other hand, if you're more inclined to spend most of the week at the beach, and make a Disney run for a day or two, you have more options. 

If it's someplace in between ("Theme Park Alley", the Tampa - Orlando corridor), again, there are tons of options, but also as many considerations for rental purposes.

Both of these are way more than I can cover easily in a reply. 

My best suggestion is simply to ask, "What do you really (and I mean REALLY) want?"

Theme park alley? Beaches? Disney's front door? 

It's up to you and your family's desires.

As long as you do your research, due diligence, and don't listen to sales pitches (timeshares make me cringe), you will not have a problem finding and keeping a profitable vacation rental in Central Florida.

 Please feel free to contact me if I can help.  I'm a Realtor® in the St. Petersburg area (beach side of Tampa), and my brokerage has an office & agents in Winter Haven. I'm happy to connect you with Holli, an agent from the Winter Haven office.  She's fantastic, very knowledgable about the area, and definitely a Disney regular. 

Condos (especially rentals) in this area are a tough nut to crack. I'll try to sum up.  

Some of the so-called "condos" are simply short-term rentals, hotels with "condo" in the name. I refer to those as "Condo-tels". 

Some (shall we say, more traditional?) condominiums are for residential living only, and many condo associations limit the number (or percentage of units) of rentals in the association, and the minimum rental time periods. 

Those are the two big issues. There can be an overwhelming amount of smaller related issues. 

However, I know it can be done, successfully, at or around your price point.

And yes, there can be more than enough cash flow to make it a worthwhile pursuit.

PM me, and I can send you an active listing that is pretty darn close to your criteria. It's on St. Pete Beach, furnished, the condo has pools and a dock, and it's two blocks from the Gulf. And, of course, it can be leased out. 

Forgive me if I double-post here & in my signature, but I need to be sure that I disclose properly. 

I'm a local Realtor® and licensed Community Association Manager (years of experience managing local condos and HOAs). 

Not my specific area of town, but I'm familiar with the area.  I also have a similar situation.

The good news - you have two major home improvement stores nearby.  There are also quite a few investors and homebuilders in our area.

First question - who owns it? In other words, is it REO yet? That can really complicate the issue. I will presume there is still an individual owner involved, at least for purposes of discussion.

I suggest digging a little deeper for information.  If code enforcement has tagged it repeatedly, there's a good chance the owner is either highly motivated or has dropped off the face of the planet.

Code enforcement becomes a great ally at this point. Cultivate that. They will happily provide a massive amount of information if you approach it right.  

"I'm a real estate investor who lives on the block.  I'm happy that you are aware of the situation and handling it the best you possibly can. While I am, of course, interested in the potential profit in rehabbing that property, I'm also very concerned about my own property value.  I'm doubly motivated.  Is there anything I (as an investor and/or neighbor) can do to work with you and the rest of code enforcement to help fix this problem?"

Do what you can to reach out to the owner.  If you can make contact, gently ask what is the absolute lowest price they would take for the property.  

If it had burned down, what is the smallest check from the insurance company that you would take without getting really, really mad?

Then you have the option to wholesale, or purchase for a fixer for yourself.

You're quite welcome Faisal. I'm glad I could provide some information you might find valuable. 

Hi Faisal,

I'm a lifetime local resident, Real estate agent and Realtor. 

Your concerns are valid, but there are deals to be had, even on the MLS.

Using your example, you estimate a probable cash flow of about $100. Not bad (better than $1M in the bank), but not great either. 

First question - how much do you need to make in order for this deal to be a "win" for you?

I'm going to run fast and loose with the numbers for my convenience.

Given your assumptions, how can you either generate more revenue and/or reduce the expenses?

First is asking price. $180k isn't out of line ($60/unit), but this is where the most immediate savings can be found. Re-run your numbers at $160, even $150. 

Keep taxes and insurance the same.

Pass the utilities through to the renters. That's generally accepted practice in this area. Re-run your numbers.

Vacancy / Maintenance / Management - those are good guidelines, but not the actual numbers. Really good management may cost less, and keep your vacancy rate much lower. How many Property Management companies have you contacted? Is this an average number, or the actual quote from your preferred company? How do they handle vacancies? Proactively, three months before the end of the lease? Or reactively, two months after you lose a paying tenant?

Maintenance is another question - what is the effective age of the property? If it is old, you'll need to do more. If it's in excellent condition, you'll need almost no maintenance.

There are deals in every market. Finding them is one major step. Figuring out how to make them work the way you want is another.

Welcome Gianna! I'm a local (St Pete area). BP is a fantastic resource. Enjoy, and of course, if I can be of any help feel free to contact me. 

One of the quotes that I try to live by:

"I don't pay my attorneys to tell me what I can or can't do. 

I pay them to tell me how to do what it is that  I want to do."

Find that kind of agent in your area.

In a normal conventional residential sale, yes, I normally recommend hitting the bank first. 

With investors, you might not know about hard money lenders (for example), but (locally) I know about it, can help guide you, advise you if it is an option worth considering, and can connect you with some hard money lenders if appropriate. 

You need someone who can help you find the best solutions to your problems. That's not a waste of my time.

Michael, BP is a great place to learn a ton of information. 

Your real estate agent / Realtor® should be too. 

Yes, you can do a lot of your own research and preparation, and you should, as much as possible. However, the right agent will also take the time to help you grow. Likewise, you should be willing to help them grow too.

My first meeting as a licensed agent was with an investor. He was looking for flips, had some money and a little experience. The deal we were initially discussing wouldn't net me a commission that would pay for my coffee. He had never heard of 1031 exchange or contract assignment. In the time it took me to drink my coffee, he had learned the basics of wholesaling and how to use 1031 to his advantage.

Why did I do that? Because I know he'll call me if he needs anything.  I can call him if I happen across a deal that meets his criteria.  He will also call me if he finds a deal that doesn't, but that I could list. We both win, our customers win.

I'd keep looking until you find an agent who works with beginning / intermediate investors. It may take quite a while, but it's worth it for both of you.