All Forum Posts by: Chris Grenzig

Quote from @Michael Bengtson:

Quote from @Chris Grenzig:

Quote from @Michael Bengtson:

I'm an engineer currently living in the DC area, and I've been exploring real estate investment opportunities in Jacksonville. I have some family ties to the area. 

I'm looking at Class B properties in up-and-coming neighborhoods and plan to self-manage once I relocate.  I know building a reliable local network will be key, so I'm hoping to connect with experienced real estate team in the area.

The military presence in Jacksonville catches my eye, and I'm particularly interested in properties that might appeal to military personnel and the associated contractors. I have a few questions for those familiar with the market:

1. - What neighborhoods would you recommend for a first-time investor like myself?
2. - I'm curious about the market dynamics. From what I've seen, Jacksonville has attractive housing prices and rental rates. But I want to understand:
   • How quickly do rental units typically get leased?
   • Is the market truly as promising as it seems, or are things over saturation?

I'm, eager to learn from local insights and make a smart, informed investment decision. Any advice or perspective would be incredibly helpful.

Thanks! 

 Hey @Michael Bengtson I can probably help. We’ve bought 150+ units in Jax that we owned and managed, we still own 51 units and we also manage for other owners. I lived there for 3 years but relocated to Orlando last year to be closer to family.

I think Jacksonville is still good overall, but it’s tough to make rentals pencil right now. There has been a ton of new construction for housing the past 4 years and that’s why vacancy rates are 10-12% and rental rates have dropped the past couple of years. 

Some solid areas to look at are:

Riverside, Avondale, Murray Hill, San Marco, San Jose, Orange Park, southern part of west side, east Arlington, pockets of the Northside.

I’m on my phone so a little tough to go in great detail, but you can message me and we can find a time to chat if you’re interested.

Chris - thanks for the reply. I like the areas you mentioned - they look solid. 

Interesting point about houses not really penciling out at the moment, I was coming to the same conclusion so I’m glad to hear I’m onto something. While I understand appreciation isn’t something I should necessarily bank on, but I am looking to hold for the long term and eventually relocate to the FL. So I may be okay breaking even the first year or two. 

Do you invest in Orlando? Are there areas of specific interest? 

Thanks! 

 We haven't invested in Orlando yet, its similar to Jacksonville, although maybe rents haven't dropped as much. Much of Florida is in a similar boat, especially since insurance has 2-3x in the past 2-5 years. I don't know Orlando as well so I can't speak to interesting areas as well as I can Jacksonville, but there are plenty of interesting areas. I like Winter Garden, Maitland, SoDo, College Park, Longwood/Casselberry. I haven't explored too many areas further south of Orlando yet like Kissimmee, Lake Nona, and other areas around there to really say.

Quote from @Michael Bengtson:

I'm an engineer currently living in the DC area, and I've been exploring real estate investment opportunities in Jacksonville. I have some family ties to the area. 

I'm looking at Class B properties in up-and-coming neighborhoods and plan to self-manage once I relocate.  I know building a reliable local network will be key, so I'm hoping to connect with experienced real estate team in the area.

The military presence in Jacksonville catches my eye, and I'm particularly interested in properties that might appeal to military personnel and the associated contractors. I have a few questions for those familiar with the market:

1. - What neighborhoods would you recommend for a first-time investor like myself?
2. - I'm curious about the market dynamics. From what I've seen, Jacksonville has attractive housing prices and rental rates. But I want to understand:
   • How quickly do rental units typically get leased?
   • Is the market truly as promising as it seems, or are things over saturation?

I'm, eager to learn from local insights and make a smart, informed investment decision. Any advice or perspective would be incredibly helpful.

Thanks! 

 Hey @Michael Bengtson I can probably help. We’ve bought 150+ units in Jax that we owned and managed, we still own 51 units and we also manage for other owners. I lived there for 3 years but relocated to Orlando last year to be closer to family.

I think Jacksonville is still good overall, but it’s tough to make rentals pencil right now. There has been a ton of new construction for housing the past 4 years and that’s why vacancy rates are 10-12% and rental rates have dropped the past couple of years. 

Some solid areas to look at are:

Riverside, Avondale, Murray Hill, San Marco, San Jose, Orange Park, southern part of west side, east Arlington, pockets of the Northside.

I’m on my phone so a little tough to go in great detail, but you can message me and we can find a time to chat if you’re interested.

@Jenny Yu do they have an online portal you can log in to? I know for our portal in Buildium owners can log in and run different reports like income statements, profit and loss, general ledger, etc. So if we have a $475 bill for an owner you could click on that amount and see the invoice/bill that's associated with it and get some more information. Maybe they have something similar you could try to get at least more information about the bill or other expenses. 

Do you have a not-to-exceed clause in your contract? It's pretty common practice to have something like that in a property management agreement, and if it falls under that limit they're going to pay it and not notify the owner except in regular monthly updates because it is below the threshold of what is an ordinary expense in the course of business. If it's over that limit then it's something they would need your approval before getting the work done and paying it. Our NTE for a single unit is $500 so if there was a $475 plumbing bill we knew was necessary for the property we would be paying it and you would see it in your monthly statement. However, you would get an answer from us if you asked, and you'd be able to find the bill/invoice in your portal as I mentioned above. 

If you have questions about any of this stuff feel free to ask or PM me and I'll be happy to help I won't be doing it to try and win some business, I am just happy to help if I can. 

@David Krulac that's for sure, I wasn't really talking about population growth, talking about the amount of new supply being built which impacted the overall supply and demand. But you bring up a good point that supply could be at record levels if demand is matching that same pace. Unfortunately for us in Jacksonville, demand was outpaced by supply because of the low cost of capital, and a huge surge in rent growth from 2020-2022 so the feasibility of everyone's projects looked great. Jacksonville still seems to have continued job and population growth, but without actual hard data, it seems apparent the supply far outstripped the short-term demand. I think it will meet long-term demand since new construction starts in the past 1-3 years have dropped off a cliff, so new supply coming onto the market from 2025-2028 will be significantly lower and allow for absorption of everything and most likely we'll start to see organic rent growth again in the 2-8% range as we saw in 2016-2020.

@Basit Siddiqi Jacksonville is the 38th largest MSA by population just going off Wikipedia list from July 2023. Orlando is 21st in the list. 

Truthfully I haven't compiled a list of the list of the number of total units being built for all cities, but when I would see the lists of the top 10 that Jacksonville was on as a percentage, many of the other cities had higher unit counts as well, like Nashville, Phoneix, Austin, etc. 

I don't remember seeing Orlando being on those same lists, so I couldn't compare directly the total number of units being built for Jacksonville vs Orlando. Often the data companies put out the lists and you have to pay to access the data that would allow me to get more specific like this, so I can't do so. 

Jacksonville probably is building more total units than some other larger markets, but I just don't have access to that information. So I may have misrepresented this a little, but that wasn't purposeful. My main point is that regardless of its size percentage wise its very high which has impacted Jacksonville a ton.

https://en.wikipedia.org/wiki/Metropolitan_statistical_area

Quote from @Nathan Gesner:

Quote from @Chris Grenzig:

Very location-specific. Interesting that your market is slowing, but Chris's market is doing well around Orlando.

Jacksonville hasn’t been building as many total units as Orlando, but Jacksonville has been top 10 in the nation for building new housing units as a percentage of current stock. So percentage wise Jacksonville has seen a crazy amount of new supply being delivered which has affected rents.

We also manage a portfolio of new construction homes in Palm Coast and Palm Bay and rents for those homes have dropped $25-75 depending upon floorplan and submarket and they’re taking longer to lease up compared to 2 years ago.

A lot of Florida is having similar issues of stagnating or dropping rent, but it definitely depends on market, submarket, asset type, etc.

Quote from @Nathan Gesner:

https://www.zillow.com/research/october-2024-rent-report-345...

It's normal for the market to slow down in winter, especially right around Thanksgiving and Christmas. This year feels different, and I'm hearing many landlords complain they can't find renters. My market is humming right along, except for the higher-priced single-family homes.

The linked article provides some good information.

What are you seeing? Has it slowed? Reversed? Stayed the same?

Jacksonville, FL has seen rents drop in many areas due to a ton of new supply coming into the market. We're seeing historically insulated submarkets to new construction get effected because of how much there has been as a percentage of existing stock. It does seem to have plateaued in the last 12 months or so, but units are taking longer to lease then they did 2-3 years ago for sure. 

@Kevin Lorick this is called trust accounting and is very common for residential property management. I come from the world of 100-500 unit properties where this was not the case and every property had it's own separate accounts that we controlled as the owners, but now having been owning and managing 1-80 unit properties for 4+ years, trust accounting is the best way to do it. 

I would love to keep all the properties completely separate, but I just don't see how it's feasible. 

Just make sure your PM has excellent accounting practices in place as trust accounting can get out of control fast. We use a 3rd party company that specializes in only property management trust accounting (nothing else), and they reconcile the bank account every single day. The last thing I want to do is mess everything up by not having our accounting done correctly. 

@Sunny Rajvansh we sign the lease on behalf of their owners as their agent and we can do so because we are properly licensed in Florida. The best bet is to ask a local landlord attorney what is and isn't allowed in your area. 

@Aus Smith if there is base rent and then an extra fee the resident pays for a common utility, we count that as revenue towards a percentage-based management fee. 

I think I understand what you mean by pass through's and that's probably company-specific. I can't really think of any off the top of my head besides utilities, but if you have specific examples I can try and comment more on it.