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Updated almost 5 years ago, 02/07/2020
INVESTING IN LAKELAND FL OPEN TO OTHER AREAS
I've learned so much valuable information thus far. I just wanted to get some advise on where to invest in FL. I'm waiting for a realtor and a management company to contact me hopefully this week, but in the meantime wanted to do some more homework.
Someone mentioned Crombie street in Lakeland as a center point that divides good versus bad. Is it stay away from East or West of Crombie Street? One or the other is supposedly a high crime/drug area?
Other than Lakeland, are there any up and coming neighborhoods that I should look into when it comes to investing in rental income? I do want to stay away from the water to avoid flood insurance.
Thank you!
I have about $100K-$120K to invest this year to start.
Follow the I-4 corridor in either direction away from Orlando and its growing in those directions.
Up the turnpike towards Ocala.
After that dig into each area to find the good spots and the bad areas to stay away from.
There’s others but this is general info for central Florida. I’m not investing in Tampa MSA yet do not sure about over there.
For SFR homes for PM expect 10% rate and half months rent to fill a vacany.
For Multi family >5 units should be 5-8% and flat fee (50-200) to fill a vacancy.
@Rosa Lepore, it all depends on your goals and how you plan to run things. Cash flow tends to be higher in rougher, more affordable areas. Where are you located? I'm in Horizons West (Winter Garden, SW Metro Orlando). I used to sell pharmaceuticals in Lakeland and the entire I-4 corridor between Tampa and Orlando. The more rural areas are ideal for rent-to-purchase ratios (i.e. 1% rule, 2% rule, etc).
@Andrew Ashby I’m in Horizons West as well ! We should connect sometime ! and to OP, have you checked out winter haven yet ??
@Account Closed
Hi all! Moved to Tampa recently and it seems area is over priced.
How is central Florida? Is it mostly single family demand or do multi families?
I heard between Tampa and Orlando is the next area to boom. Any thoughts?
Originally posted by @Arthur P.:
@Account Closed@Andrew Ashby
Hi all! Moved to Tampa recently and it seems area is over priced.
How is central Florida? Is it mostly single family demand or do multi families?
I heard between Tampa and Orlando is the next area to boom. Any thoughts?
There’s always deals to be found. But the gold rush is over in my opinion. When every online news outlet is saying it’s a great place to invest (last 4 years it’s been “the best investment” story) the boom is over. Now it’s just picking up the remaining leftovers if you can find any that are in a decent area that is.
In my opinion Your marketing machine will be the difference between cashflowing or not for SFR.
@Account Closed
It sounds so gloomy for a new investor like me...lol. I keep hearing all different views, SFR will not make you money, you need multi level units. Buy one house and see how it goes. If you don't buy wholesale there is no money to be made.
You are an investor, so if the gold rush is over, did you stop investing?
I am from NJ. I haven't really seen any properties that are 1% to 2% on return. I have not taken the flight to go physically look, but I've been doing some searching on-line.
Originally posted by @Rosa Lepore:
@Account Closed
It sounds so gloomy for a new investor like me...lol. I keep hearing all different views, SFR will not make you money, you need multi level units. Buy one house and see how it goes. If you don't buy wholesale there is no money to be made.
You are an investor, so if the gold rush is over, did you stop investing?
It’s not so much gloom and doom. It just isn’t the the gold rush walking around picking up gold nuggets off the ground. You have to dig for it and work for it now.
Yes I’m an investor and yes I am always looking at and for deals. I am actually signing a contract today for a medium sized multi family unit. So they are deals to be had. Just have to figure out what you want and go for it.
What’s the worst that could happen? You lose some money but you’ll learn from it.
Everything has its pros and cons. SFR is nice because a tenant typically will pay all utilities and maintain the landscaping.
Multi family I maintain the landscaping And could have to pay for some Utilities.
For me personally I like the ability To have several tenants to spread my risk across instead of the whole 100% or 0% occupancy.
but that's my level of risk. I'd rather buy a 500k - 2m property and have 5-40 tenants paying the bills than a SFR where 1 tenant is paying.
But all strategies work for some people and those same strategies may not work for others.
@Account Closed
Eric thank you. What is the difference between owning 4-5 SFR and owning a 4-5 unit building?
@Account Closed
I think I'm getting closer to what I want and that is high cash flow with either multi SFR or a multi unit building and I want to continue to grow my portfolio from that. However, I think my problem is not having connections yet, or trusted connections. I did contact a management company that also does realty, and they know what I am looking for, I just don't know if it's the right connection. Do you suggest any real estate investor realtors and management companies? Being that I am a beginner I don't think we will be bidding on the same properties.
Originally posted by @Rosa Lepore:
@Account Closed
Eric thank you. What is the difference between owning 4-5 SFR and owning a 4-5 unit building?
If you own say a 5 unit multi.
Pros
That is one closing, one location, one roof (maybe 2), one PM (because one location), one lawn to care
Value of property is based on income you can generate from it. So lower your expenses and/or increase rent it increases value you can sell it for or amount you can finance again down the road.
Cons
5 unit multi is investors only, can’t get owner occupancy financing so a house hacking can’t come buy it from you.
Versus
Cons:
5 separate closings, so 5 title searches, 5 closing Attonery fees, 5 negotiations, possibly 5 different sellers to deal with, 5 locations unless you buy a row of homes which is normally unlikely, possibly multiple PM’s due to location or skill set of PM, 5 insurance premiums. 5 transactions to sell it as well.
Pros: can sell to anyone, though depending on the area it could be a 70% or greater renters only neighborhood so it can be sold to anyone but odds are it’s going to be another investor.
Neither one is the wrong choice. You just have to do what is right for you. And what you are comfortable with as well.
@Rosa Lepore you should check out winter haven and davenport, winter haven still has cheap property renting for 1000 month and Davenport has a HUGE vacation rental market. I can find you some stuff if you need I'm an investor with a great realtor on my team. If you want some listings just let me know
Thank you, I will. What do you think of Dixieland?
Originally posted by @Rosa Lepore:
@Account Closed
I think I'm getting closer to what I want and that is high cash flow with either multi SFR or a multi unit building and I want to continue to grow my portfolio from that. However, I think my problem is not having connections yet, or trusted connections. I did contact a management company that also does realty, and they know what I am looking for, I just don't know if it's the right connection. Do you suggest any real estate investor realtors and management companies? Being that I am a beginner I don't think we will be bidding on the same properties.
Rosa, you are on the right path, and you hit the nail on the head when you mentioned "However, I think my problem is not having connections yet" as with any business dealing, Real Estate is dependent on relationships, and not just any relationship, they must be quality relationships with various different resource providers i.e. Contractors, Property Managers, Financial providers, Insurance providers, Real Estate Brokers and list goes on and on, you get my point.
I know it is very easy to want to find a deal and purchase something quickly, I see it happen over and over again, people coming from out of state or even people coming from the Tampa, Orlando and Miami areas who start looking in the area, and find deals which "SEEM" like a good deal simply because $140k price tag is low compared to the persons market, and they make the purchase, they end up with a property with barely any equity, and they end up renting it out at a loss, example below:
The below is fictional examples and estimates, always do your due diligence before investing
Purchase price: $140,000.00
Rehab: $15,000.00
Closing costs: $4,000.00
Holding Costs: $3,000.00
Total Purchase price: $162,000.00
1% of purchase cost: $1620.00 mo. (this is the minimum amount you should receive in rents)
Estimated market rents: $1300.00 mo.
Loss of $320.00 mo.
It is very easy to get into a situation where you end up having to sell or hope for appreciation, which is a not a good investing strategy. I highly recommend getting involved locally, no matter where you end up investing, by finding local meet ups or REIA groups which generally have a good group of people with experience and local knowledge, and always work with someone to check and double check the numbers before you make your investment.
Let me know if you have any questions, glad to help.
Link to Polk County REIA:
Thank you, I've done a little bit more learning since and I'm looking at cash on cash return and I have a better understanding of what a good deal looks like. Can I ask, what do you mean get involved locally? I'm from NJ, you mean invest in NJ, close to home?
Newer investor that has been digging deep and analyzing the Tampa, St. Pete, Lakeland, Winter Haven, and Brooksville market for the past few months. A lot of your assumptions are correct. Tampa is overpriced, and you have to be careful with what neighborhood you are looking in. However, there's MULTIPLE flip or BRRRR opportunities. St. Pete is pretty stable being a beach town with a good mix of higher and lower end properties. Rents in Tampa/St.Pete are fairly high which is nice. As a side note, im closing on a property in St. Pete in about a week and will cash flow after all expenses $350/mo. This is a SFH. So yes, there are deals to be found, even on the MLS.
Lakeland/Winter Haven are really good areas if you're planning to buy and hold for a while. Like others have said there are two main areas of growth around Tampa. You have the I-4 corridor towards Orlando or you have north up I-75. The Land O'Lakes area is absolutely BOOMING right now hence why I started looking into Brooksville for a long term play. LL & WH are pretty rural and cheap comparatively. Definitely a lot of room there for flips or LTR but those deals definitely go fast. Theres A LOT of cash in the Tampa area being spent on houses and A LOT of flippers already here.
My agent is also a BP member and I would be happy to recommend him to you as he has gone above and beyond for me while working through my current deal. I also have a PM that is great as well.
Just like any market, the more you know, the better. Tampa seems to be in a little bit of a bubble right now, but if you look towards the paths of growth you can definitely find what you're after.
Your welcome, and I am glad to see you are gathering knowledge.
When I specified to get involved locally, I was not suggesting you should stay in your area, if you decide to invest out of state, in this case here in Florida, it is always a good idea to get involved with groups and local people, who can become part of your team to help you find good investments.
Thank you. Easier said then done. I started with a realtor/property management company who presented me with an investment that wasn't good after learning a bit more. I was going to lay out $44K in cash and get back a little over $200/month in rent. I don't think there was any immediate profit in appreciation either.