Quote from @Khurram Humayun:
Hello Everyone,
I am a new RE investor and wanted to know more about the best investment strategy and process to apply in my local market. Although, I find the BRRRR method interesting does it make sense for a hot market ? Orlando and Tampa are relatively close and Disney is 30 mins away. It seems like short term rentals are what everyone seems to be doing. Ideally, I want to find a low price point property in a B class area. In the end, I want my local market to dictate the what my RE investing strategy ought to be. From earlier posts in dated 2020 it seems that the BRRRR method is not a great one in certain parts of FL due to primary and secondary market price points being really high. Although, the market has softened somewhat for sellers due to higher interest rates and a soft recession which is in line with the RE market correction that typically occurs, I am not certain it is conducive for application of the BRRRR method and air bnb/short term rentals might be the play. I would really appreciate some up to date information for my local area so I can apply the best possible RE investment strategy. I am not willing to look at C/D class neighborhoods. My plan is to make money going into the deal, cash flow positively to stay above water, have enough equity to handle market corrections while getting reasonable appreciation (3-5%). I know perhaps its idealistic of me. But, I figured this would be best place to ask for guidance. As I am a new member, perhaps these are all answered somewhere. Thanks in advance for the time and energy in reading and responding to this post. Hope you all have a most wonderful new year.
Respectfully,
Khurram
Hello Khurram -
Sounds like you have a very good grasp on what's going on in the CFL market.
Yes, BRRRs and Flips are still a unicorn, even in the softened market. I represent several clients who have been searching for months in the lower price tier and we just can't seem to get one to pencil for the amount of work needed given the ongoing high purchase prices.
And yes, short term rentals (STR) continue to be a hot investment asset, especially around Disney.
BUT, your goals for buy and hold are realistic. Central Florida, including Clermont, is a historically high appreciation market, but relatively low cash flow market. Today, when we find a single family or small multifamily that will produce $100-150 per door per month in cash flow, we call that a good deal. We know that rents have historically grown at 4-7% in this market, and we believe that we will continue to see strong appreciation rates. By year three, cash flows are strong and wealth is growing at a good clip. I'm enjoying similar results on a 4 plex in the Leesburg area.
DM me if you'd like to talk more about opportunities in the greater Orlando and Central Florida market.
