All Forum Posts by: Chris Rich

Hey @Danny Huallanca I work for The Realty Medics, a LTR PM company based in Orlando, but we service all of Central Florida. Let me know if you want to schedule a call so I can see what you are looking for in a PM, and see if we're a good fit for you.

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Orlando, Florida

Quote from @Sambit Sharma:

Hi @Elise Marquette , That was some incredible insight. I really appreciate you taking the time to write that. I was actually looking at the Davenport area earlier, they got some pretty nice options down there along with the Kissimmee area.

Have you come across anyone doing like a rent-by-room strategy for SFH? Because around some nicer areas even like Baldwin Park and Lake Eola its almost a breakeven, when just using a traditional SFH strategy.

While I'm out in Orlando, I will definitely drive around and check some properties out in the areas you mentioned. Because I will also be buying my home out there eventually so I gotta think of where my family and I will stay and also be on the lookout for RE Investing opportunities in the area.

Thank you so much

Baldwin Park and Lake Eola, while nice areas, have such high acquisition costs that it would be hard for the numbers to make sense for the future rental in my opinion. But when you say "Orlando," how large of a radius were you referring to, or still trying to figure that out? @Sambit Sharma

1 Vote

Quote from @Alexander Camacho:

Hello everyone,

My wife and I, will be moving to the Orlando area in roughly a year. We want to start our journey in real estate investing once we move. Right now, our focus is cash reserves for two potential options.

1. Single family residence- get the roof over head and then move forward.

2. Multi-Family residence- live in one and rent the other.

For those familiar with the area, what are some expenses we don’t want to overlook regarding these two options?

Down- 20-25%
Closing- 5-10%
Maintenance/Repairs- 10%

Thank you for the advice!

@Alexander Camacho Did you have any areas in mind? Would it be a buy / hold, and rent down the road when you upgrade the primary, or sell down the road and reallocate funds? Are you wanting turnkey or would you be willing to rehab it?

1 Vote

Orlando, Florida

Quote from @Chance Schrettenbrunner:

Hi all! So I have renovated, got professional pictures, and now am ready to rent out my first medium term unit! But I am stuck on the screening process. Is the 3 times the rent still a rule of thumb for this like it is for LTR? Also, what do you look for in credit score. And if they go through air bnb do you guys still require a lease? Thank you in advance! Wouldn’t be here without this community

Hey Chance, 3x the rent is standard income requirement for most LTR rental companies (plus credit score, background, eviction, etc checks). Credit score is usually 600+, but looking at the type of debt (if any) can also explain their situation as well. Ie, $25,000 on a car note is different than $25,000 of debt on credit cards. Finding good tenants is critical and there's a pretty strong correlation between setting standards & doing tenant checks and not having issues with your tenants. Conversely, you see issues on a significantly higher rate when you do zero or minimal screening. Lower income and credit score requirements opens up the applicant pool, but you may also be getting higher risk tenants by doing so.

You have to ask yourself how risk averse do you want to be? Like Allen said, you can set your own criteria, I would just recommend being consistent. Set tenant criteria you are comfortable with and apply them evenly so you do not risk a discrimination situation. One thing we see commonly with self-managing landlords who then hire us is they have tenant selection practices that are not legal as they deny applicants based on protected characteristics. As long as you are fair and apply your standards evenly you should be fine.

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Indianapolis, Indiana

Hey @Kiara Spence, congrats on starting your journey! It sounds like you're already on the right track by doing your research ahead of time. You mentioned the equity in your primary, are you thinking about a HELOC to fund the investment? And are you planning on BRRRR or buying new construction?

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Quote from @Nicholas Middleton:

What is going on in Daytona beach? I am seeing lots of properties popping up in my email these past few months? Is this due to insurance costs? What do you know?

Like a couple others have mentioned, through & post Covid we saw a lot of tourists visiting Florida which lead to a really profitable STR market in 2021/2022. A lot of investors bought into the market and it has since cooled off. I work for a LTR company in Orlando, but we cover Daytona as well. I've had quite a few sales calls from owners with STR in the Kissimmee (Disney) and Daytona areas trying to transition to furnished LTR because they are not performing well enough. I presume it's because the markets are becoming saturated at the same time as the tourists numbers peeled back a little. And yes, insurance costs are rising, especially in those coastal areas. I really think it could be a combination of variables.

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Quote from @Peter Chen:

Hi Experts,
I am a very new and motivated player to the Real Estate investment world and ready to buy my first rental property. While I am still working on my end goals, some of the concrete ones ::

1. Will start with a single family home, Long term rental investment (10-20 Yr).

2. Will add atleast 1 property every year starting *2023* onwards.

3. Will play safe with first investment and use it for learning.

4. First rental 100-300k ( 20% down, 80% loan), prefer to keep some positive flow if possible, Or atleast neck to neck.

5. Started exploring below areas but need suggestions from experts if these are already saturated and there are other better options with growing potential 5 or more years down the line.

a) St Augustine/Jacksonville/Tampa (FL) --> Need more suggestions, not sure which one I should focus more on.

b) San Antonio Texas

c) Atlanta Georgia

d) Charlotte/Raleigh North Carolina.

Last but not least, recommendations for reliable team players in those areas with whom I can build long term partnership for exploring/closing deals, managing the rentals etc.
Thanks

Peter

Hey @Peter Chen! Congrats on getting started and I love that you're doing a bunch of research before making a purchase. There are some cities I would add to your Florida list, specifically Orlando, Ocala, and Palm Bay. A lot of our investors are purchasing new build properties in those areas because of the relatively low purchase costs and build in equity at closing. Those cities have had strong appreciation over the last 8-10 years and depending on area and situation, may provide strong cash flow as well. Since you are more concerned about appreciation, the new build may be a great route since you shouldn't have any large repair costs in the first 5-7 years, and by that point the cash flow should improve.

I work for a LTR PM company here and have referral partners for RE agents and lenders, so if you need any help let me know!

1 Vote

Quote from @Logan Padilla:

@Chris Rich Good point. An overly-saturated market should certainly be taken into account. I always suggest everyone run an AirDNA report prior to entering into any STR market.

My sources for appreciation are an aggregate of FRED, US Census, BLS, JBRG, NAR, and MLS data.

Gotcha (re the sources). Data can be tough sometimes because the numbers can change source to source. And I would agree, definitely want to do you your research on STR before buying.

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Orlando, Florida

Quote from @Logan Padilla:

There are great opportunities in every market, so it's really about finding the right place. To arm you with a little more knowledge, the average 5-year rate of appreciation for Tampa is 9.2%, while the average 5-year rate of appreciation for Orlando is a little lower, at 8.56% That said, Orlando is a tourist hub, so my advice would be if you're looking for something short-term (AirBNB), finding a place in Orlando around the attractions could be the way to go, but if you're looking for a more long-term investment, Tampa may be your best bet.

Hey Logan, what's your source for the appreciation data? I saw an article earlier in the year that had Orlando at an average of 10.7% appreciation over the last decade, according to Neighborhoodscout. I'd love to check out what sources you have!

Also, STR can be beneficial, but it is also highly saturated in the park areas. I've had a bunch of sales calls in November with owners wanting to transition their STR to a furnished LTR because the STRs were not performing as well as they expected, or in some cases, not covering the mortgages.

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Orlando, Florida

I would definitely recommend an accountant who specializes in real estate investing. They become your partner and can help you not only reduce your tax liability, but help you plan for the upcoming year based on your yearly goals.

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All Forum Posts by: Chris Rich

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