All Forum Posts by: Alex Boyce

Hey BP,

I'm in the market to purchase my first Short Term Rental. I live in Orlando and want to invest locally. I have $75K to invest and pre-approved for $325K purchase. I've done quite a bit of research but realizing I need to narrow down on my strategy and wanted get some advice between these various paths:

1. 200-250K Townhouse in desirable community like Windsor Hills / Paradise Palms. Well within my budget and could very comfortably carry this if needed, as well as have extra cash to make the rental stand out. However, these tend not to appreciate and have high HOA costs. From what I've seen it looks like these still cash flow well though.

2. 250-275K Single Family 3-4BR house that needs work. I'll be able to customize the house to stand out, however these tend not to be in desirable areas / slightly further away from Disney, and I may not have enough to do much with (50K down + 15K furniture leaves 10K for rehab, excluding any holding costs). Also, communities with no/low HOA's typically have no amenities. However this would be the option with the most appreciation.

3. 325K Single Family 5+BR house. The kind of house I'd expect to perform the best is the huge 2800+ SQFT, 5+BR pool home. The problem is any house like this in a desirable area like Windsor Hills is easily over 400K. There are some for this price in other areas like 27 or Davenport, but I'd be at the very top of my budget, in a further market, with little leftover to make the place unique. 

Looking forward to your thoughts. Thanks!

Yikes. 

@Jim D. that's the idea. It obviously depends on finding a good enough deal where the numbers work

@John Thedford I have personal finance reserves for emergencies, but not sure if its wise to count on that. I am planning on factoring in R&M and Capex into the rental figures, and ideally if I'm doing the rehab myself I should have some control over things not breaking on day 1 of switching it to "rental" mode. Is that fair? Or are you suggesting reserves on top of that

Just adding my $0.02 here, I just tried to add a post through the app and it crashed as I hit post. So I tried, same thing, tried again same thing. I log on to the browser and finally works. Turns out it worked all 4 times and now have 4 of the same post, with no way to delete any of them. 

I was told if I go through a small bank and do both with the same lender they may allow it? Is that unheard of?

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Like most new investors starting out, I have a few good things going for me (steady income, great credit, education resources, support from family), and a few barriers to overcome (no cash, no assets, limited network). I'm determined to be successful and take action, despite starting with only part of the puzzle. Here's what I'm looking at... because I don't have the cash to fund a deal, I want to go with traditional lending for the mortgage and open a LOC to borrow the down payment and rehab costs. I'm working on my RE Agent License, which will allow the commission to help offset the closing costs. Then after the rehab refinance to pay off the LOC and hold as a rental. Assuming I find a good enough deal, I won't be over-leveraged because I have forced equity through the renovations, putting my total loan in (or below) the 80% LTV range. Are there problems or dangers with this plan I'm not thinking/aware of? Am I not putting enough weight to the risks? I'm also worried if the market goes down, then I've lost my "forced equity" and could potentially be underwater and/or stuck with an operating loss if rents go down as well.

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Holy Moly! That is an awesome first deal. Goes to show you that persistence pays! Why did you decide to go with HML, over other options like conventional, private or find a partner?

Interesting. Is anyone flipping in the Orlando market that has a differing opinion than this article? I've seen a few run-down REOs in my area that are near retail prices, but not sure if that's the norm across town. Thanks for sharing Christopher Phillips !