MY FIRST & NEW CONSTRUCTION RENTAL IN CAPE CORAL, FL

Real Estate Deal Analysis & Advice
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MY FIRST & NEW CONSTRUCTION RENTAL IN CAPE CORAL, FL

Miles Viant
Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes

Investment Info:

Single-family residence buy & hold investment in Cape Coral.

Purchase price: $254,000
Cash invested: $37,200

NEW CONSTRUCTION. WILL BE READY IN JAN 2022!

What made you interested in investing in this type of deal?

I wanted a new construction as my first investment property to lower the risk, less risk for vacancy, maintenance issues. This new construction homes come with 1/2/10 warranty. Southwest Florida is red hot right now and Cape Coral is a beautiful area and the property is located a few miles from a luxury development including shops, restaurants, marinas, & residential living, replicating what is down in Southwest Cape Coral. Opportunity for built in equity in an 'A' graded neighborhood

How did you find this deal and how did you negotiate it?

Simply being a subscriber to Rent to Retirement. New Construction, no competition which was a plus!

How did you finance this deal?

10% down, conventional financing , construction to permanent loan

How did you add value to the deal?

Appraisals of these exact builds in exact same developing neighborhood are appraising for 300K +

What was the outcome?

Purchased the property for $252,000, appraisal came back at 265K before even closing on the property for the construction loan

16Reply
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Most Popular Reply

Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
4y

@Khanh Nguyen

Thank you for the mention and questions.  I just want to clarify for you & everyone else reading this thread.  We do not require only one lender to be used.  In fact, we welcome any lender that offers good terms to be used for construction.  The reality is that there are not many options for the average investor that does not have previous build experience to obtain financing for new construction with reasonable terms.  Because of that we have built a network of lenders that do offer construction financing to investor that lack experience.  This includes private financing, institution lenders, conventional lenders, etc.  There are multiple lenders on our list that we put the investor in touch with.  Each of these lenders offer different loan terms, down payment requirements, etc.  Because of that, not every lender is a fit for the individual.  Some people simply won't qualify with some of these lenders.  If it is suggested that you speak to a specific lender, it is because we have evaluated the most likely scenario for you to be successful qualifying for loan based on your specific scenario.  That is why it is vital to have communication with your RTR rep to run through your scenario.  We are always happy to share all lender suggestions, and have you apply with each of them.  If we know upfront that you won't qualify for a certain loan product, and we can save both you and the lender time & energy, then that would be why we have suggested one specific lender.  Hopefully this helps to add clarity on the overall process.  The best advice I can give to anyone interested is to simply schedule a consultation with your RTR rep, and collectively devise the most strategic plan & lending options available to accomplish your goals.  That is what you are here for. 

[email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
Rent To Retirement5334 Reviews
WebsiteView Page
14Reply
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  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    5y

    @Miles Viant

    Thanks for sharing!  We are very excited to be working with you on this new construction opportunity in one of our best markets!  I think you will be very happy with this as your first investment.  It will be a great starting point to allow you to scale quickly with having immediate equity!  We look forward to working with you for years to follow to scale & diversify your portfolio.  Congrats!

    [email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
    Rent To Retirement5334 Reviews
    WebsiteView Page
    10Reply
  • Matt Dombrowski
    Investor · Ft Myers, FL · Member since 2021 · 13 posts · 16 votes
    5y

    Can you share the numbers on the deal? Have seen some of R2R's advertised deal analysis for Cape Coral be a bit optimistic :) 

    2Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Matt Dombrowski

    Sure! 

    Purchase Price: 252,000

    Down Payment: 25,200

    Closing Costs (For Land and Construction): 12,000 

    Total Investment: 37,200

    Projected Rents +2k/mo

    Taxes -314/mo (R2R said $1850, but I did not find that to be possible during due diligence. Could be wrong, this is my first property! Still learning. But like to play it safe, than sorry)

    Insurance -98/mo (including flood ins)

    Property Mgmt 8% -160/mo

    P&I -1034/mo (3.65%)

    Reserves 8% - 160/mo

    Cash on Cash: 231/mo 


    Comparable Homes in this neighborhood are selling over 300k

    SFR rentals in this neighborhood are renting for 2k+

    3Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Zach Lemaster

    Very excited about it! I knew to trust my gut with this one! Thank you and Rent to Retirement for making it such an easy process to secure this deal! Look forward to continue working with you guys! 

    9Reply
  • Terry Fox
    Investor · Ellington, CT · Member since 2012 · 60 posts · 16 votes
    5y

    @Miles Viant

    Hi Miles, I love the SW Cape Coral

    area. Congrats! Are those insurance numbers from an actual quote you received? That amount seems much lower than my premiums.

    1Reply
  • Matt Dombrowski
    Investor · Ft Myers, FL · Member since 2021 · 13 posts · 16 votes
    5y

    +1 I pay about $300/mo for insurance on similar rebuild cost with very high deductibles and low coverages in Cape Coral without flood insurance.

    0Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Terry Fox
    Thank you! Very excited about the area, can’t wait to see how the Northwest turns out! And yes! Once the elevation certificate comes in, the premium for the flood insurance actually might be a little lower but the flood insurance that I purchased and home insurance that I have selected brings me to 98 a month. I’m in an AE flood zone. Will Taylor & Associates is who I used 

    1Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Matt Dombrowski

    That seems a bit high… did you shop around for other policies? Did they give you a reason to why it’s so high ??

    300/mo insurance gets you insurance for a beach homes on the water in some places 

    0Reply
  • Matt Dombrowski
    Investor · Ft Myers, FL · Member since 2021 · 13 posts · 16 votes
    5y

    Thanks will check out Will Taylor! I haven’t actually shopped around much yet. 

    0Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Matt Dombrowski

    Absolutely! 


    and thanks everyone for the comments! Finally broke out of my shell on BP! 

    1Reply
  • Matt Dombrowski
    Investor · Ft Myers, FL · Member since 2021 · 13 posts · 16 votes
    5y

    @Miles Viant congrats and thanks for the details! would be great to hear what you finally get for rent once complete. small nitpick but would also be worth including allowance for vacancy 

    0Reply
  • John Burtle
    Real Estate Broker · IL · Member since 2016 · 284 posts · 178 votes
    5y

    10% down on new construction? Wow!

    That’s unheard of in Illinois.

    Unless I’m not talking to the right lenders that is.

    Congrats! I’m looking forward to hearing about your progress.

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y

    Congratulations @Miles Viant ! 

    0Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Matt Dombrowski thank you! Yes, that’s what I meant for “reserves 8%” in my analysis which includes vacancy as well…. of course having 6 months reserves on hand as well.

    But the first few years of building up my portfolio. I don’t plan on using cash flow for Anything other than building up the maintenance and vacancy account to 6 months as well before I’ll be comfortable with just 8% going into the account.

    1Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    @Dmitriy Fomichenko @Derrick Burtle thanks guys! Really appreciate it

    0Reply
  • Gohar S.
    . · Member since 2019 · 23 posts · 26 votes
    5y

    Would you mind sharing how you are getting to those numbers for lot purchase, closing costs and then construction loan/Interest prior to refi?

    I am working with them as well and the numbers are vastly different

    $30k to $33k for a lot (cash)

    $13k with a loan for construction (private money) closing costs

    $30k or so to builder to begin construction

    $6k in Interest Only payments at a rate of about 10%

    love to hear how you are getting to your numbers

    2Reply
  • Andrew Tuquilar
    Inver Grove Heights, MN · Member since 2013 · 22 posts · 1 vote
    4y

    Awesome deal! Who did you use for the financing?

    1Reply
  • Kaohuhealani Trueman Jr
    Rental Property Investor · SF Bay Area · Member since 2021 · 8 posts · 5 votes
    4y

    @Gohar S. my numbers for the Cape Coral new builds are just like yours. How far along are you in the process and have you thought about what you plan to do with the built-in equity, possibly cash-out refi and pull your initial investment to put towards something else?

    1Reply
  • Gohar S.
    . · Member since 2019 · 23 posts · 26 votes
    4y

    @Kaohuhealani Trueman Jr

    I ended up not moving forward. I had a few concerns and one of them was the "wholesale" pricing of the lots marked down by $10k to $15k" and when adjacent lots were par or cheaper than the lots advertise/presented at the $5k wholesale premium. A little bit of pressure in that the property owner fly in from Europe(?) Or some where overseas to transact. I thought we would have been able to do it all remotely. So a few items compounded with me deciding to reevaluate.

    I am still in the market and looking for additional properties to move forward with but just decided this particular scenario wasn't it for me.

    Hope this is helpful. Hope to find properties to move forward with. Looking at a few other turnkey providers.

    0Reply
  • Khanh Nguyen
    Investor · Orange County, CA · Member since 2020 · 12 posts · 5 votes
    4y

    @Miles Viant if you don’t mind sharing more details on the financing. I have recently been in discussions with R2R and was told that the only work with 1 lender for the Cape Coral new builds. When I reached out to the lender it was a private money loan option at 9.5% with a series of fees and points. All in out of pocket cost came at around 72k. I have seen other posts of investors that were able to use conventional financing in the last few months so not sure if R2R  has changed policies.

    0Reply
  • JASON V.
    Rental Property Investor · Lee County FL · Member since 2021 · 19 posts · 12 votes
    4y

    I am having the same experience with renttoretirement right now. (of being much higher then Miles)

    @Miles Viant  who did you get for a lender? I was also told I had to use their private money lender to do the deal...

    0Reply
  • Miles Viant
    OP
    Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    4y

    that is really odd... I assume things have changed then. I was able to secure conventional financing with lake michigan credit union @Khanh Nguyen

    0Reply
  • Rodney MenendezPro Member
    Developer · South West Florida · Member since 2020 · 74 posts · 53 votes
    4y

    I am also building in Cape Coral and I would like to recommend my lender @Naomi Keck. She has a construction loan available but must importantly she has an amazing refinancing 40year fix rate for investors. This type of loan will definitely max out your cash flow.

    [email protected]239-288-0702
    3Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    4y

    @Khanh Nguyen

    Thank you for the mention and questions.  I just want to clarify for you & everyone else reading this thread.  We do not require only one lender to be used.  In fact, we welcome any lender that offers good terms to be used for construction.  The reality is that there are not many options for the average investor that does not have previous build experience to obtain financing for new construction with reasonable terms.  Because of that we have built a network of lenders that do offer construction financing to investor that lack experience.  This includes private financing, institution lenders, conventional lenders, etc.  There are multiple lenders on our list that we put the investor in touch with.  Each of these lenders offer different loan terms, down payment requirements, etc.  Because of that, not every lender is a fit for the individual.  Some people simply won't qualify with some of these lenders.  If it is suggested that you speak to a specific lender, it is because we have evaluated the most likely scenario for you to be successful qualifying for loan based on your specific scenario.  That is why it is vital to have communication with your RTR rep to run through your scenario.  We are always happy to share all lender suggestions, and have you apply with each of them.  If we know upfront that you won't qualify for a certain loan product, and we can save both you and the lender time & energy, then that would be why we have suggested one specific lender.  Hopefully this helps to add clarity on the overall process.  The best advice I can give to anyone interested is to simply schedule a consultation with your RTR rep, and collectively devise the most strategic plan & lending options available to accomplish your goals.  That is what you are here for. 

    [email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
    Rent To Retirement5334 Reviews
    WebsiteView Page
    14Reply
  • Patrick Bavaro
    Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Miles Viant I am going through this build with R2R as well! They still have several financing options available from what I know. I’m about to finish my permitting process. Excited to go vertical! Your build is completing next month ya?

    1Reply
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