Anyone have experience investing in Tampa or Ocala?

Question

I live in NYC and Im looking to invest multi family properties in Tampa or Ocala. Has anyone had success in that market? Looking to build a team!

Clay Lehman · Answer

I am an investor and Realtor in Ocala.  Ocala seems to be weathering this storm pretty well so far.  I think that the fact that our employment growth has come from distribution is going to prove to be a huge blessing as distribution will continue to grow.  In many ways, the pandemic has expanded the market of people that order goods online.  Ocala's home prices are still low relative to rents and I think the future is bright for the area.

Luke Skinner · Answer

Hey Jake,

I am an investor in Tampa. I also work as an investment specialist at Rent It Network in Tampa. I am not familiar with the Ocala area but I can tell you about Tampa.

Right now this whole area is booming! We have several new districts being built in the Tampa area. (3+Billion going into South Tampa/Waterstreet district alone) Along the I-4 corridor up to Lakeland is also a hot spot for investors. The rental market is very strong down here and the demand is higher than the supply! Everywhere you look in Tampa/Clearwater/St Pete you will see new development or revitalization happening. There are some great value add properties as well as turn key Multifamily properties that bring in a solid COC return! Areas are so diverse here so depending on location your return can be high but the appreciation will be moderate. Other locations the monthly cash flow will be lower but you will have strong appreciation! So it all depends on your investment goals. Buy and hold or buy a property to get forced appreciation and Refi or Sale.

Drew Ramasco · Answer

You have to remember, marion county is the horse capitol of the world. People will gladly live in a mobile home, in the sticks... especially if you have enough land for an animal or two. People really love their country lifestyles here.

Drew Ramasco · Answer

Born and raised in Ocala, currently invested here as well. Ocala is blowing up due to all the distribution centers they have built. Feels like they are building a new home on every corner.

Brian Goodling · Answer

@JJ Wright @Mary K.

I found the deal through a co-effort with my agent (who is also a BP member). We started looking at the MLS to see who owen their home free and clear and then created a list/map that showed these people all over Florida. Then started to narrow down by areas of interest in terms of what would be the best investment. My strategy is long term buy and hold with an emphasis on cash flow. So with this in mind we started calling the sellers and/or their agents and just started asking about seller financing. Once we found someone who was at least interested my agent and I started looking more closely at the property and what the terms needed to be in order to have it make sense. I had about 7k in cash ready to go for a deal for I needed someone who was willing to go no or low money down knowing that I could make it up on the back end to the seller in regards to price or interest payment. Once we determined what we needed to get in terms of financing then we could contact the seller and propose to them our offer (sight unseen at this point) if they were at least willing to work with us we would move forward, but if they negotiated terms that were vastly different than what we needed to get we just passed them by. With this property once we originally offered $0 down with a 20 yr note at 5% interest. The seller countered with $5k down, 20yr note at 5% interest. We knew we were close to a deal so at this point we decided to drive 2 hours away and check out the property. After returning from the visit, the same night, we reached out to the seller letting them know we were interested but we had a final offer they could accept. Take it or leave it kind of deal. We offered $0 down, 20yr note at 5% interest however I would pay all closing costs. We knew that the seller (through conversations) didnt really need the cash up front, they just wanted passive income and to be able to move without having to pay for anything. Essentially it turned into a win-win where the seller could move back to AR (from FL) and be able to sell their place without having to pay anything. I won becuase I got the financing terms I needed to feel comfortable with the property. All in all I paid about $5500 in closing costs (including agents commissions) for the deal. The mortage payment is $340 and I have it rented out currently for $800/mo or roughly $350/mo cash flow after taxes, insurance, CapEx, Repairs, Etc. The forecasted yearly return for Cash on Cash is about 75%. ($4200/$5500) which is pretty good in my book.

I think overall finding these sellers is more just about putting in the time and making phone calls and just seeing who is interested. Theres a TON of people who own their home free and clear who may not of even heard of seller financing. My favorite part about the process is that I was able to work with an attorney and write up the financial terms and mortgage to benefit my situation on some of the minor details. I am also trying my hand at being the PM for the property as well instead of hiring it out. Seems like a lot of the PM's in Ocala have very undesirable rates and are often overpriced. I didnt think using one was worth it on this property.

If anyone has other other questions about the process I went through for this one, please feel free to let me know and Ill be happy to answer the best I can.

Mary K. · Answer

@Brian Goodling wondering the same thing - how did you find the owner financing deal? Not many people openly advertise that they'll do it; it seems you have to be pro-active and hunt them down (persuade sellers to consider OF). I agree with everything you said, and am a bit surprised that Ft. McCoy had so much interest. I do know there is a big shortage of rentals here in that price range though. People are desperate for anything under $1000/mo, esp if they take pets. Do you plan to buy more?

Brian Goodling · Answer

@Jake Silverman I actually just closed on a property about 25 minutes NE of Ocala in Fort McCoy. From first glance you would think that a smaller rural town wouldnt have much in terms of return. But the majority of the demographic is blue collar workers and older people. I bought a property for 52k in Fort McCoy using seller financing for $0 down on a 20yr note with 5% interest. My monthly payment including taxes & insurance is about $400/mo. I just rented it out for $800/mo. I listed the property on Facebook & Craigslist for a week prior to having the place ready to show and I had over 40 people wanting to come see a single wide with a full length addition (the unit was a 2/2 on 0.7 AC). I was amazed at how much interest there was. My thoughts were "who wants to live this far out from anything"? The town literally has 12 blinking red light. Thats it.

I think Ocala is a stable market where you arent necessarily going to hit a 'home run' but if you want something consistent and, relatively speaking, safe then this area may suite your needs. It's also cheaper which can be nice for a newer investor or something without much cash at the moment. Thats was my position. I had about 6k to spend on a new investment and when I found the seller finance deal I went for it since they were open to negotiating terms. I got what I needed in the $0 down and longer term, and the seller got what they wanted in a long term passive income stream.

My personal opinion is that Tampa is in a bubble right now. It's growing, and growing FAST. Rents are obnoxious for terrible properties. Prices are insane for terrible properties. Granted this is not CA levels of insane, but a SFH that needs 50k worth of repairs selling for 200k+ is pretty bad for this area.

But I think it also depends on what youre going for. If you want appreciation I would look more around Tampa, but if you want a safer play I would go into Ocala.

I'd be happy to answer any other question you have about the either of these two areas as well.

Cheers!

Jeffrey Kops · Answer

Hi Jake, Let's connect and chat!

JJ Wright · Answer

Awesome response, Brian. So thorough and helpful. Gives me a perfect blueprint as to where I need to be. Of course I have a ton of other questions, but I'll find the answers by doing some more digging and networking. Thanks and keep up the great work!!

Clay Lehman · Answer

I agree with @Drew Ramasco, the Fort McCoy, Silver Springs and other areas in the National Forest are very attractive to a number of people who work in Ocala.  We have a few properties out that way and I have been pleasantly surprised at how quickly they rent and the rent amounts we can get out there!!

Anyone have experience investing in Tampa or Ocala?

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