Where to invest

Question

After two years of travel my wife and I are ready to put down roots in a new location. At risk of being cliche we decided Florida was where we wanted to be. We don't own any real estate now but are living comfortably in our RV and can do so for another year if need be.

We also are interested in real estate investing and are actively looking for homes to renovate for the purpose of flipping or keep as rentals. I have 150k to get started but am faced with some options. 1) Use the 150k to buy a primary residence for ourselves then use that equity to finance future real estate investments or 2) buy houses to flip in an effort to increase my capital. 3) Buy a multifamily unit to rent out and use that equity/income to finance future deals.

I am also looking at the projected population growth for the state of Florida and was wondering if we should focus our efforts in another county. The county I have been looking is expected to grow 13% to 180,000 by 2025. That would be about 20,500 new residents.

The county just to my south is projected to grow by 35%. That would be 220,000 new residents.

Would I be better off moving my efforts to the more populated county with the higher projected growth?

I feel like a cat I saw that went after a flock of birds in our yard. When they all took off there were so many the cat didn't know which one to go after and ultimately ended up with none...

Thanks for any input..

Aron Rogerson · Answer

Dave makes a great pt about meeting local real estate agents, afterall they could be your future agents.

Another Tip: Talk to Prop mgmt companies, they might be able to give you greater info about tenant stats in an area (if you want to hold and rent).

Dave Vogt · Answer

Welcome Stephen,

I would wholeheartedly agree with Aron on this one. You are in a fantastic spot with your RV and some cash to play with to buy great flip or hold properties. In my opinion I think that both areas would be a great place to invest. I would think it would be up to both of you to decide on what place fits the best. Which area does your gut say is the place you want to be.

I have been fortunate enough to work and play right in my back yard flipping 3-5 properties a year making a good living. The best part is I love where I live. The people are great and the area has a lot of perks that make me and my partner happy. Local business is supportive of what we do and our ability to network and truly understand the area we invest in is a big key to our success.

I hope that helps....I am a little jealous. Its cold up here in Canada right now. I love Florida and have friends and family there.

I wish you much success and happy travels,

Dave

PS Once you settle on an area get involved in the community, learn the good and bad areas, meet good local Realtors (ones that have investment properties), drive for dollars(preferably in a tag along car which I hope you have), join the local investment group (if there is one). You can ask people at the investment club about potential partners for your team such as title companies, attorney, etc.

Stephen Anderson · Answer

Thanks for the great input. I forgot to mention that I have joined a REI group and have been to my first meeting with them. I lucked out because I happened to come on a night when a realtor in the group set up several houses for us to walk through. We then met back at their usual meeting place to discuss the potential of each property. They meet weekly but plan to do walkthroughs once a month.

It was at this meeting that my thoughts went from flipping to rentals as most of the houses we toured were older 2/2/1 block homes. One, long time, investor brought up "contract for deed" and "lease purchase" options for local home owners that are located in high risk flood areas and therefore can't sell thheir properties. Needless to say I learned a ton from these investors.They meet weekly but plan to do walkthroughs once a month.

The county south of me that projects the higher growth has quite a few twinplex properties available. If I could get them for the right price they would make great rentals.

Aron Rogerson · Answer

Your life sounds like a nice dream, you and your wife must have enjoyed the RV days, I hope I can do that some day :). Nothing like seeing the great land we live in.

What is great about south florida (resident speaking) is that it is heavily populated, i.e. fort lauderdale to miami. Your projection is surely on target, growth fuels cost of living, and for investors that means rental stability (to an extent i would say, area dependent).

but with that comes competition as an investor. I have purchased one investment property last year at a great price, it is currently being rented out with comfortable returns. The neighborhood is not the best, but there are far worse.

Your best bet (Which you are already doing) is to continue talking to locals in that area, maybe other BP'ers or at investor meet ups etc..

When I bought my property last year there are several others in the surrounding area within the same price point, now I am having a hard time finding the sweet spot of cost to value ratio. But that just means the deals are a bit harder to find, not impossible.

If I were in your shoes, I would be conservative. With an already established cash basis you can do so much with that. Take your time and strategize your approach, is it better to:

A. move down and rent then invest

B. move down buy a primary (to live in) then invest

C. move down live out of your RV for a while then invest

I prefer A or C, it leaves more cash in my hands. I would rather take baby steps (especially with your mobile home, makes it easier), then have a sound investment, make that investment ''steady state'' then move on to the next target (could be your primary residence or another investment).

Good luck!

Where to invest

Most Popular Reply