Advice for new investor - buying quadplex in FL late 2023
Member since 2022 · 3 posts · 0 votes
Advice for new investor - buying quadplex in FL late 2023
7 Replies
- 3yAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
Starting off this way is always a great idea because you are able to utilize loans and tax advantages as an "owner occupied". Be careful of ABB fever... super tough market and the customers are DIFFICULT. I have a property manager that can manage about 100 annual units and I have another that can barely handle 12 vacation rentals. They are a LOT of work and a LOT of extra capital to start because of the furnishings. The expenses are also much higher because of utilities, internet, and maintenance. I would highly suggest going with annual rentals.
Bartomeo Property Management4.7150 Reviews - Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes3y
You'll love it here...and you'll need to do a lot more research before jumping into your plan. Most of Florida has restrictions on vacation rentals due to the hotel industry which is a multi-billion (yes, that's a B) dollar industry in the state. Very few municipalities have unrestricted zoning for vacation rentals; and a lot of investors have found out the hard way what can happen if they get caught operating one illegally. Short version - it's not worth taking the risk. Hotels have even gone as far as having their night desk staff check AirBnb/Vrbo listings in their market and report those who are "infringing upon them." Do the homework, find the right resources in the markets, and go from there.
Then there's price...the best vacation markets come with the highest prices which can easily exceed $1M for a small house. Then there's our insurance cost which is the highest in the nation. You'll need Commercial Insurance coverage to run a vacation rental business.
So, discouraging...not at all. All this means is that you have to know what you're doing, where you can do it, and how to cash flow it. My clients and I love the business - but it is much more like running a hotel or resort than anything close to a tenant rental.
Hope this helps and narrows the search criteria a bit. My best recommendation would be this: ask yourself where you would want to vacation and why. It's the business of fun so start there.
Best...
- Lender · Fort Lauderdale, FL (Lending in FL CT GA MI PA) · Member since 2022 · 470 posts · 349 votes3y
Plenty of investment opportunity in Florida. Wherever you land, you'll probably be in a good market. FHA house hack with a 4 unit property is a great way to get started without too much down.
- USA · Member since 2022 · 879 posts · 109 votes3y
It's great that you're thinking about investing in real estate and have a specific goal in mind! Here are a few suggestions for how you can prepare for your investment over the next year:
- Educate yourself: There is a lot to learn about real estate investing, and it's important to do your due diligence before diving in. Consider taking a course or reading books or articles about real estate investing to get a better understanding of the market, financing options, and other important factors.
- Set a budget: Determine how much you can afford to invest in a quadplex and how much you'll need to borrow in order to make the purchase. This will help you narrow down your search and identify properties that are within your price range.
- Research the market: Take some time to research the real estate market in Florida, including trends, demand, and potential rental income. This will help you understand the potential return on your investment and whether it makes sense for your financial goals.
- Find a good real estate agent: A good real estate agent will be able to help you navigate the market and find properties that meet your criteria. They can also provide valuable guidance and support throughout the buying process. (DM me and I can make an introduction to someone amazing!)
As for specific locations to consider, it's a good idea to focus on areas with strong demand for rentals, such as those near universities, hospitals, or other major employers. You may also want to consider areas with a high concentration of vacation rentals, as these can be lucrative options for short-term rentals. Ultimately, the best location for you will depend on your specific goals and budget.
- Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes3y
@Jonathan Cooley Beware of the self sustaining rule for fha type lonas for 4plexes. The rule makes the majority of the 4plex deals in the Austin Texas a no go. Also, beware of the property insurance costs especially near south Florida. I had to back out of a deal there on an old fixer upper small rental property because of inability to get insurance at that time. Consider Orlando. I have some friends that are doing well there. If you are going to live there and like to fish then south Florida is the bomb! The best tuna in the world is there. I will eat it right out of the ocean...yum!
- Member since 2022 · 3 posts · 0 votes3y
Thank you all for the replies. That is some great information. Might lean towards long term rentals instead based on the feedback. Definitely planning on doing a lot of research over the next year. A couple more question that I am guessing some of you would have some insight about. We have not decided if we will keep our primary residence that we have right now as a rental or sell it. Without much knowledge regarding rentals, how would I go about finding someone with more knowledge to look at the house and advise us on whether it would be a good rental and what kind of work to do on it if so? Or would you recommend I just try to figure it out myself with self research (which I have been doing but still don't feel confident about) Last question - So I know you can do up to a 4 plex as a primary, but what if we got a 4 plex and then bought a RV or camper to put on the property as a short term rental? Would that then not qualify as a primary or would that be an exception? Hope that makes sense. Thanks again for all the thoughtful replies - very much appreciated.
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