All Forum Posts by: Mike Conner

I'm not a large multifamily investor but I have lived in Tallahassee and went to college here since 2000. The population has not increased a large amount but the quantity of large multifamily apartments that have been constructed is mind boggling. Almost every week I see a new ($100+ million) apartment building being constructed. I work in construction with a developer and talk with City/County permitting staff all the time about the over supply of apartments. We can't believe they are all being filled to capacity. I have seen a few of these apartments turn to some type of section 8 where the residents have an income limited to stay since they are subsidized by the government. A lot of the apartments that were the hot spot when I was in college, have now have switched ownership 2 or 3 times. They now have all these reduced rent signs, move in bonus etc, as newer nicer properties are being built closer to FSUs campus. Not sure if that's just marketing or the properties are struggling. I'm guessing the property you are talking about is one of these apts that once was a hot spot and is now struggling to attract renters. Maybe it will be a good investment but I would be cautious about the rent rates with all of the pressure from competition. 

@Imran Ahmed I wouldn't live there just b/c the school zones aren't the greatest and it's mostly older homes, but that doesn't mean it couldn't be a good investment if you can get it at the right price. I own a duplex down the street from there. For reference I bought it in 2014 for $109k, rehab of $15k, All in for $124k and it currently rents for $900 and $885 (which are going up in July) for a total $1785. Above the 1% rule. This property on Talpeco is below the 1% and I wouldn't expect much more appreciation as that area is pretty stagnant, and with the current shortage of homes I don't see prices going up much longer till the fed raises interest rates, forbearance ends, and the eviction moratorium is over causing a wave of foreclosures/evictions possibly creating opportunities to pickup properties at good prices. I'm personally waiting to see if I can pick up some properties as the market shifts lower. If you are going to analyze this property be sure to check insurance rates as this property is older and there have been some recent increases in insurance and reductions of coverage for water damage and you may need to do a wind mitigation study which is cheap to get insurance rates reduced. 

@Imran Ahmed I wouldn't call that area rural, but it's definitely a working class area. This area is mostly older 1980 era homes but there are a lot of homes going in at Lake Jackson and more down on Tower Rd both in 32303 zip code. If you are talking specifically about Camellia Gardens Condos just watch the condo/HOA fees as those are usually high. One more thing we are getting an Amazon warehouse soon which is going to add 2,400 jobs. It's going to be built by I-10 and Mahan Dr.

Just wanted to mention another insurance doozy that came up recently. Due to so much fraud from roofers and so many hurricanes/natural disasters recently in FL companies are tightening requirements to be covered, reducing coverage, and increasing rates. Most rates are going up by 20-30% and on top of that to get water coverage the plumbing has to be 10-15 years old!! I asked them what you were supposed to do about drain pipes from sinks etc b/c those require demo'ing the flooring/slab to install new and it's insanely expensive. They said to get water coverage plumbing has to be within 15 years. Now this was only one agent I was speaking with but considering this is the case across the board this could total change the amount of risk an investor is taking on. It would mean any house built before 2006 would not have any water coverage unless you spend 10k+ replacing perfectly functional piping. Regardless everyone needs to be aware that insurance is having some big changes coming up and expect rates to keep increasing and coverage to be reduced. 

@Abraham Kaplan I just refi'd a rental doing a BRRRR at 3.5% (60% LTV) and my primary house at 2.6% on a 30 yr note with no points through Prime Meridian Bank. I shopped about 15 banks/credit unions and I've never had anyone beat them on price. They are also good on the commercial side offering solid rates for 20 year amortizations at 75% LTV. Also they have no seasoning requirement if you are doing BRRRRs which is a big plus.

@Lowell "Champ" Crawford sent you a DM with some names

@Charles Kennedy I'm glad to hear those properties in Frenchtown are working out for you and you haven't had any break ins. To be honest I'm quiet surprised there hasn't been any crime. I think you're right it's a little better South of Georgia St but literally one street over is where most of the major crimes (murder, etc) occur. I believe with no evidence to back it up that a lot of the major crimes are between drug dealers and other criminal types. I don't think it's normally a criminal breaking into a college students house. Those properties N of Tennessee are right behind many of the best college bars and walking distance to avoid driving is appealing to many college kids. I think if you drove the streets around your rentals on a Friday night it though, it may change your opinion on the quality of the area.

The reason you are getting high returns is due to the area having high risk and other investors aren't that interested in the area so the prices of the houses are low. Not to say it's not the right investment for you, just something many choose to pass over.  I just want anybody on Biggerpockets that reads this to get a good understanding of what they are buying in this area.

Personally I prefer to buy in other areas where I can 1.1-1.5% rule properties with low crime, high quality tenants that don't make a lot of money, and in locations where blue collar families tend to stay for longer periods of time. 

@Lowell "Champ" Crawford I agree with you completely on the contractors. There are what I call retail GC's here who have outrageously high prices and only a few that will price within reason. My last rehab where I bought all the materials, contractor's quoted labor from $26k-$34k. I finally found a guy to do the exact same scope of work for $7k, but he decided to raise prices after that project. I've had good luck with home advisor recommendations and apparently a lot of the contractors use that service. 

I work for the largest home builder in Tallahassee and with the current quantity of houses/apartments being built and renovations going on contractors can pretty much name their price. Not to mention COVID has caused so many material prices to sky rocket. We were paying $7 per 4x8 sheet for OSB now they are $26. If you DM me I can send you a couple of contractor's I've used in the past. Good luck

@Justin Reed

Thanks for the reply. When you say you pull the assessor data is it pulled through Neighborscoop or directly from the assessors site? If so I've been trying to get through the data from the assessor and it is hard to get the data I'm looking for and tie it to possible motivations like lis pindens in official records. 

How do you perform due diligence from Neighborscoop without seeing the property and how to you come up with an offer price? Some of these abandoned houses I have seen are literally about to fall over and I'm curious how you would know that by sending a mailer.

How do you handle the phone calls? Is it through a google voice number or something similar? Sorry for so many questions and I'm happy to read/research any resources needed.