Cape Coral -New B2R-Rent to Retirement

[Cj Powderhorn]

Hi, Looking at some NB in the 33993 area. SFH. Has anyone worked with Zach Lemaster and his guys in this area? Just looking for a couple of references as well as some of the FL specific gotchas - besides the alligators. Also, wondering if the NB areas typically include future assessment and flood/wind insurance into their calculations? I've at about 10 investments SFH and Duplex, but and looking for a new area so I feel like I am starting over a bit! Thanks very much, Cj

[Zach Lemaster]

@Cj Powderhorn

Thank you for the kind words. I've always enjoyed our lively conversations about REI, tax strategies, financial planning, the military, skiing, or whatever fun topics we share in common! No doubt we understand that some of our new construction projects are not the correct fit for everyone. Naturally when you say you decide to cancel everyone immediately wants to know what happened assuming something went wrong, or there was big issue that changed your mind. Reality is this just wasn't the right fit for you at the this point in time. Thank you for clarifying this.

A couple points to expand on for the general community, we are mainly focusing on building in Lee County in SWFL.  We focus on specific metrics and data points there that are important to follow from an investment standpoint.  What we do know, and can measure right now, is an increasing demand for housing that is not able to keep up with the population trends.  I've included some graphs below.  This causes the rents and market value to increase dramatically.  To use an example, we initially projected the 4/2 model a year ago to rent for ~$1,800 to $1,850 with about $20k of immediate equity.  Now that these homes are completing we are seeing rents in the $2,200 to $2,300 range & investors having ~$50k+ in immediate equity.  Even now with the prices in the high $200k range most all appraisals are coming in the $350k to $400k range.  If anyone would like to see copies of these appraisals, just reach out.  We have many to share with you.  This is all due to the nature of the housing market in SWFL.  While we all know this will not last forever, now is an exceptional time to capitalize on the market trends to invest in a brand new build that has excellent cash flow & immediate equity which is extremely rare to come by.  You will need to be patient however as it will likely take a year or longer to build these with permitting delays, etc.  So you need to be prepared for that, but the wait is worth the benefit.  If this is not a location that seems like an area you want to own in long term, that is completely fine.  I recommend selling the home to cash in on the immediate equity.  You could also be creative to do a cash out refinance to pull the majority of your equity back out to reinvest elsewhere.  I've been a professional RE investor for many years now investing across the country.  I can't say I've seen many opportunities quite like what is available in SWFL right now.  This is where I'm personally allocating most of my own capital currently for new construction investments!

Florida does consistently rank as one of the top markets people are moving to often 2nd right behind TX (FL has significantly lower taxes than TX).  We do see the population increasing year after year.  Especially when you look at specific areas of the state where we are focusing on you will see these trends dramatically increasing over the past few years.  No doubt this is an exceptional time to invest in the right locations in FL, especially with new construction that has immediate equity & attractive cash flow.