All Forum Posts by: Chris Rich

Lake Nona is one of the fastest growing areas in the Orlando metro, but like Shawn said the infrastructure is already over loaded... but they keep building.  Obviously appreciation isn't guaranteed, and COVID really drove up prices, but we've already seen the market correct itself.  We're at a near record high for median sale price.  Rental rates are pretty strong too if you wanted the option to rent it out down the road.

Like I told my friend in a conversation recently while we were discussing home values... That completely average 1,300 sqft, 3/2 house in California currently valued at $1.1M was once valued at $250,000... 

As long as people keep migrating to Florida and the economy remains strong, there is no reason to think home values won't continue increasing, especially if you are looking to hold for multiple years.

Quote from @Gabe Morrell:

Jacob, thanks for giving me a great straight answer to my $20k question. Seems like the sensational answer would be to direct me to a YouTube video explaining how to acquire property with “no money down.” Haven’t quite figured out how the math works yet on that strategy…

Dennis, patience is a great recommendation. Much appreciated. Personal finances are under control. Not looking to move out of current home as it fits us perfectly in our current season of life (with a 3.375% interest rate). Haven’t quite gotten to deciding how many beds/baths are desirable for future rental. A future step to consider. Likely would look in the $250-350k range.

I'd agree that $20,000 isn't enough unless you are considering really low end properties and I'd argue they aren't worth the headache.  I think waiting a little longer to build up those capital reserves makes sense, especially if rates aren't going to come down much in 2024 (presumably.)

My two cents -- If you are looking for SFR, I'd say 3-4 beds, 1300-2000sq ft is the sweet spot for LTR. If you look at tenant preferences over half prefer apartments with about 30% wanting an SFR.

I see you mentioned a low interest rate, do you have a lot of equity?  My wife and I are in the Orlando area and had a 2.99% when we wanted to upgrade.  We took out a HELC and leveraged the $200K in equity to turn our primary into a cash flowing rental... just another option. 

Quote from @Brian Plajer:

I am thinking of investing in rental property in Ocala Florida. Wondering if anyone has experience there? If so, is there any red flags such as rental restrictions, limitations, etc. Thanks

Hey Brian!  My company manages a little over 400 properties in Ocala and most are OOS investor owned.  Depending on property size you can expect rents between $1500-$1850.  And while like Clay said, there aren't any large employment centers like a metro, you do have a solid job market.  Red Rock Development spent $50 million building the 600,000sqft warehouse (that Amazon now occupies) without a tenant lined up based off the projected growth.  Since then, Chewy, Auto Zone, AT&T, Dollar Tree have all built distribution centers in the area.  Additionally, the Villages are close by and with an aging population it attracts a lot of healthcare field workers.

Now, with a lot of rental properties you may run into slightly longer vacancy periods if you have a unit turn at the same time as others, but generally speaking renter demand is solid. 

Here's a link to a Realwealth article ( ) that discusses why Ocala is a great area for investors.  While it's a year old, the 137% equity growth from 2014 to 2022 is quite nice. 

Quote from @Jeyo Punnakottil:

My current rental is a 3 bed 2 bath with an additional office room( donot have a closet) 1950 sq ft. Current rent for a 3/2 is 2200$ .Is it wise to convert the officeroom into a bedroom by adding a closet and then market it as a 4 bed 2 bath for 2450$.

What will you do if you were in my shoes.

As long as the office has enough space to make sense and the criteria to qualify as a bedroom I'd do it, especially if it is in an area / neighborhood without many 4 BRs. 

Quote from @Ashley Collins:

Hi everybody,

My husband is military and we currently own our home in Knoxville (purchased for $450k, we owe about $300,000 with 2.6% interest on 15 year loan). The market in Knoxville seems to be pretty strong and my husband saw an estimate that in ten years our home could be worth around $900k. I’m not sure where he got that. He wants to rent it because of  that estimate even though we would be losing money every month because our mortgage payment is $2700. Based on what I’m reading (2% rule, 50% rule), and the cost of property management companies; it seems better to just sell it for its current value of $550k and invest the equity. We need to make a decision soon because we move in June. Some important information:

-A large bank is planning to open 10 locations here in Knoxville 

-Buying at our next location is not an option due to high prices.

-I should add that his military BAH would cover the cost of whatever we rent at our next location and I can cover our current mortgage with my monthly income. 

Any experienced investors have thoughts on this? Should we risk renting or just sell?

Thanks so much, Ashley 

While I am not sure where he got the $900K figure either, he is probably doing some estimation with the appreciation.  Markets obviously vary, but 3-5% annually can help give you an idea.  If it appreciates conservatively 3%, and it's valued at $550K now, that's ~$637K in 5 years. I think you are in a really good situation if you can find a way to make it work, given that low interest rate and what people in this thread are saying is a hot market. As for the risk of renting it, what is the condition of the property? Would you have any major repair costs coming up (roof, AC)? That $200K in equity now would be nice, but where would you invest it?

Quote from @Alex Na:

Hello all - thought I'd introduce myself. For some background, I am a Space Coast, Florida realtor looking to get out of renting and dabble into the investing space soon by starting out with a property of my own. The plan is to live in it for a cpl years so right now I'm assuming my best bet is a tricky FHA 203k loan. I'm looking to relocate to Orlando. If anyone has any other suggestions I'd heavily appreciate it! Thanks guys 🙂

Hey Alex, what's the rationale behind the 203K?  Just curious if you had a specific plan in mind? 

Quote from @Andrew O.:

Good afternoon,

I was just curious how everyone handles the stress of owning rental properties?  Owning RE sucks.  I own and manage 20 units all on my own while working full time with a family.  This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic.  From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap.  I don't know how the average person could afford this.  I'm not sure how I'm going to pay for it all quite yet either.  I'm in RE for the long game, but I don't understand how people make money off of rental properties.  It is always one thing after another.

 Sorry to hear you are having such a rough time Andrew.  20 doors is definitely not a small portfolio, so things are bound to happen.  I would just remember that it is cyclical. If you have generally good tenants who pay on time, that's the biggest hurdle. Be thankful for that, handle these challenges now, and remember why you are doing it.

One day you will look back and be glad you powered through it. 

Quote from @Jared Knudson:

Quote from @Chris Rich:

Quote from @Jared Knudson:

I reside in Utah. I am considering investing in or near Orlando, Florida, in a Single Family Property, below the median in a high demand area where there are lots of people moving to. I have less than a decade worth of Real Estate Investing experience. I have multiple properties under Lease Contracts at this time, and am looking to grow my portfolio in the top markets in the United States. Looking to build a solid and reliable team to help me out. Any suggestions for locations are much appreciated. Thanks in advance!

Hey Jared, I live in Orlando and work for a LTR PM company that services all of Central Florida. I agree with Shawn, while expensive in some areas, it is not saturated for LTRs in Central Florida given the migration data. Ocala and Palm Bay are two areas that are a little saturated because many investors have been buying in those areas, but generally speaking I would say the bigger issue is finding properties that cash flow without a large down payment.  

If you ever need assistance with rental analysis for properties or good areas to look into for rentals, feel free to shoot me a DM, I'd be happy to assist. 

What are your thoughts on Kissimee and Davenport?

My main concerns about Florida include: Chinese Drywall (very toxic; found in older homes); HOA Restrictions; Lots of people/crowds; sinkholes (properties sinking into the ground); Red tide (dead fish found on beaches due to algae bloom); Homeowners Insurance costs (w/older roofs); Mold; Hurricanes/Flooding , New construction (not always built to quality)... these are the most common issues found in the Florida market.

What zip codes would you recommend for a single family investment property under 300k to mitigate these concerns?

Kissimmee and Davenport is a hit of miss area in terms of the rental market, at least from what we see.  Lots of rentals, but also lots of renters. 

I've lived in Florida since 2003, and in my opinion, a lot of what you mentioned aren't concerns.  Yes, some communities have prohibitive/costly HOAs, but many do not.  Yes, certain areas have a lot of people and traffic, but what metro doesn't? Sinkholes are really uncommon. Red Tide is not really a big issue either if you look at the Red Tide map, especially if you are not living beachside. Yes, homeowner's insurance is not cheap, but it's also relative (Insurance on my rental in Winter Park is only $1,800 annually). Hurricanes, while they occur, are more concerning to people who live out of state than those who do. Outside of massive storms and/or a direct hit, if you are inland they don't often cause catastrophic damage. My dad lives in Bradenton, 20 minutes inland.  Hurricane Ian hit them pretty much head on last year.  He had sustained 100+ mph winds for about 8 hours and the only damage was replacing a few pool screen panels. Hurricane Ian was also a once a century storm, hence the extreme flooding, but generally speaking if you are not in a flood zone you won't experience flooding.  With current building codes, I'd be even less concerned about hurricanes as long as you are not right on the coast (a lot of your concerns would really only be issues if you are on the immediate coastline). I'll agree, some new builds do have issues, but many do not. 

Quote from @Jared Knudson:

I reside in Utah. I am considering investing in or near Orlando, Florida, in a Single Family Property, below the median in a high demand area where there are lots of people moving to. I have less than a decade worth of Real Estate Investing experience. I have multiple properties under Lease Contracts at this time, and am looking to grow my portfolio in the top markets in the United States. Looking to build a solid and reliable team to help me out. Any suggestions for locations are much appreciated. Thanks in advance!

Hey Jared, I live in Orlando and work for a LTR PM company that services all of Central Florida. I agree with Shawn, while expensive in some areas, it is not saturated for LTRs in Central Florida given the migration data. Ocala and Palm Bay are two areas that are a little saturated because many investors have been buying in those areas, but generally speaking I would say the bigger issue is finding properties that cash flow without a large down payment.  

If you ever need assistance with rental analysis for properties or good areas to look into for rentals, feel free to shoot me a DM, I'd be happy to assist. 

Quote from @Alex L.:

Quote from @Crystal Smith:

Quote from @Alex L.:

History: We are 6 years into renting our first home, it has gone well and we are comfortable renting and what comes along with that. We are now moving from our current home(call it the 2nd home for purposes of this conversation) into a larger residence(3rd home). 

Question: Should we rent this house(2nd home), which has offers for $820k off-market to sell, or rent for $5k, which also has interested parties? 

Details: Current mortgage is $480k at 2.625%, $3,400 monthly payment. 

New Home: I would need to dump some of my brokerage accounts for the downpayment(so some capital gains taxes would need to be paid to finance the downpayment on the new house) or if I sold our "current residence(2nd home)" I wouldn't need to.

I understand the tax incentive of selling within 5 years of living there for 2 years, however, the cash flow seems larger then what I would get taking the money and investing in new RE in the future. 

What do folks recommend in this circumstance? 

 Looking at the math problem, when you sell your second home you will net (820 minus 480) $340K. You'll pay long term capital gain taxes so let's say you're net will be $300K.

if you rent your 2nd home for $5K you will net (5 minus 3.4) $1.6K per month.  It will take (300 divided by 1.6) 187.5 months or 15.6 years for you to put away $300K from cash flowing the property (This assumes that the property is never vacant)

When considering the time/cost of money, i.e. inflation, the value of the $300K from renting over 15 years is small versus having the $300K now.

I would sell.

 Wouldn't there also be the mortgage paydown and asset appreciation happening at the same time? 

Yes, there would be. Is your market solid in terms of property values appreciating?  Hell, even 1% appreciation on an $820K house is $8000 a year, plus the what, $5K (minimum) in principal payment annually? So it's not just the $19K in cash flow.