Orlando Deal...

[Allen Motakef]

So, my partner and I are buy-and-hold investors from Southern California and now, for the obvious reasons, are looking to invest in Central Florida area. Our research shows that there are still a good inventory of foreclosures in this area. We like the strategy of buying foreclosures that need some cosmetic work so we can better growth. Looking to find the area that has the best overall long-term return (cash flow + growth) and possibly buy several properties in the same area so it’s easier to manage.

Our Criteria:

Buy-and-hold rental

3-4 bedroom/2 baths

SFR/TWH in Type A/B areas

150-180K price range

Turn-key or some cosmetic work

Low associations dues and low tax areas.

Minimum cash-on-cash of 7% depending on the property type/demographics

The Lake Nora seems to have the most potential for growth given all the new buzz but the prices seem to already reflect the growth. We also looked at KISSIMMEE, HAINES CITY, and DAVENPORT. Haines City seem to have higher HOAs that kills the return but Kissimee and Davenport may work for our strategy.

Here is a deal that I’ve been looking at:

118 SIERRA CIR, DAVENPORT, FL 33837

Price:     150K

Closing:  3K

Rehab:   6K

Rent:     1400

HOA: 55

Insurance:  100

Management:   140 (10% per year)

Tax:      208 (1.5%)

Repairs:  100

Vacancy:    58 (6% pe ryear)

Cash-on-cash:     5.6%

The return is still not where we like to be but might be able to squeeze another percent by reducing the purchase cost or management cost.

Any feedback on the expense estimates I used on above property?

Any other Orlando areas you recommend that may work for us?

Anyone interested to work with us as boots on the ground?

Anyone interested in helping with management?

I appreciate the any feedback if you are familiar with this market.