What is the best type of rental property for overseas investors?

Question

Good morning all,

I'm reaching out to tap into the collective wisdom of this community regarding a potential investment opportunity I'm considering. As an overseas investor, I've been carefully evaluating different options and have narrowed down to a particular buy box that I'd like to share with you all for your insights and opinions.

(FYI, We are trying to build a small (5 to 6 properties), high quality portfolio in the next 5 years, planning on putting 25-30% down)

The investment opportunity in question is a new build, single-family home with a 3-bedroom, 2-bathroom layout, accompanied by a 2-car garage, located in the neighborhood of Wesley Chapel, FL. My primary focus for this investment is on long-term appreciation potential and leveraging rental income to pay down the mortgage, in this case I have no cashflow.

Given the current market conditions, I understand that cash flow might not be immediate, but I'm more interested in the potential for appreciation over time and the ability to offset expenses through rental income. However, I'm open to hearing different perspectives and alternative investment strategies that fellow investors may recommend.

With that said, I would greatly appreciate any insights, experiences, or alternative investment suggestions that you may have. Do you believe Wesley Chapel, FL, aligns well with the investment objectives of an overseas investor, or do you see other compelling opportunities elsewhere?

Looking forward to your valuable input.

Best regards,

Renata

Robert Ellis · Answer

I was just in Tampa looking at lots for 2 weeks straight. I wouldn't build single family, I'd build multifamily. I'd also focus a little bit closer with higher population centers and more infrastructure. New Port Richey, Lakeland, Poinciana, etc. Those types of markets. You can buy rural land, rezone it, and build a stacked triplex that we do on the land with plenty of cash flow and plenty of appreciation. I've been in multifamily brokerage for the past 10 years and study market trends every day. we do this floorplan in Columbus OHIO and just expanded to florida where there is a lot more interest as a owner's rep / deal facilitator. You can build on much better infill lots in the center of tampa, bradenton, etc. We even found some in St. Pete FL for around $75k, you just have to come up with the best floorplan and use that will justify the land cost. I like New Port Richey because it's a buyer's market for land and there are land use overlays that allow for rezoning for multifamily at lower density if you get about a half acre. same appreciation, better cash flow, lower basis because you build it with a team not buying full market price.

Joseph Bui · Answer

Why are you targeting this market when it won’t cash flow and you will need to pay out of pocket every month? Do you feel there will be major appreciation (more than the rest of the country) in the near future?

Andre Bearstop · Answer

Being a native here in Washington DC.  You will find a strong rental market here next to the federal governement agencies as well as the White House and Capitol Hill.   Your best buys here will be 30 minutes away from these iconic places I mentioned above.   I manage 50 properties here in Northwest Washington DC.   Ocassionally my clients who are owners sell their properties to investors like you.   Look forward to connecting.

Paul Merriwether · Answer

@Petronella Kerssens  Do not bet on appreciation. Buy Scott Jelinek book or audio on Amazon and learn about Slow Flipping. Learn to buy cheap homes little to no money down then flip those cheap homes to others that can't for what ever reason buy a home but want to own one. Scott told our group yesterday he did a count and now owns 178 properties. His program can work in your backyard! How does it work? You buy, then finance that new owner. One of his students bought more than 100 homes last yr. Good luck to you!

Chris McKay · Answer

Hello Renata,I'm in a similar situation to you at the moment, and am currently going through the process of setting up my first few deals in the US. I can offer you my thoughts on the matter from that perspective, and I hope that it's helpful to you. The most important thing for overseas investors expanding into a foreign market is to leverage the experience that you have in your home market. I have experience here in multifamily in my local market, and so I want to target similar types of properties in my search back in the US. Whatever experience you have can lend value, even if it's not from investing directly.Second, I think that property location comes after the location of your support group. Real estate investing is not passive in most forms, and it's incredibly important to have a team of people to support you in your endeavors. The area in your target country where you have a group of people dedicated to help you through acquisition and management of your rental trumps nearly every other consideration when trying to narrow down a location in my opinion. A lack of oversight can easily turn even an A-class location into a nightmare. If you have people in Florida that you trust with your money and have proven themselves to you, that's what matters most. That said, playing the appreciation game is a very personal decision. Going into a rental property break-even means that you'll likely be footing the bill for unseen expenses if even a little thing doesn't go according to plan. If this doesn't bother you, continue as planned. I hope people more familiar with your local market will be able to better assist you on that end. Good luck!

What is the best type of rental property for overseas investors?

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