All Forum Posts by: David Collier Jr

@Bryan Beal.. Coincidentally insurance is what I do. Have many investment clients. To give you an idea, my duplex in Pompano with no hurricane credits carries a premium of $4,000. That is on a DP3 (Dwelling tenant occupied) with wind coverage. Of course purchasing cash you can go ex wind and cut that in half or more. 

Not many zip codes require flood actually. Just depends where you are looking as you may be close to homes on the water. With an elevation certificate flood is actually not very expensive. 

The insurance market in S FL is in a restructure if you will. There are many carriers that are taking on massive losses due to water damage claims (old cast iron pipes beyond life expectancy). Many carriers are non renewing, limited or excluding water (very important to check that detail). If you are updating plumbing (I did) your carrier options open a bit. 

Basically the rates are based on the characteristics of the home. If you are buying an older home with older roof 25-30 years, original electric and plumbing, your going to be looking at placing coverage in the ""surplus lines" market vs admitted carriers (backed by the state). 

If you're seeing rates at $6k your looking at homes in high risk areas with old characteristics. Keep in mind once you remodel or update, you can re-shop your policy and have any premiums paid prorated and refunded. Its just the cost of doing business. 

If a $2k insurance premium difference is making or breaking your deal, in my opinion its the wrong deal. 

If you get an offer accepted and need to shop your rate happy to help. 

Hey @Bryan Beal, I have a MF property in Pompano Beach and am actively looking for a second to live in an eventually vacation rent. What type of investing are you doing SF/MF, value add, long term/short term rentals etc? 

@Mitch White I own a multi in Broward but am looking to move up to the Stuart area (spend a lot of time there). Actually spend the day in Fort Pierce getting a feel for that area. Have you looked into Fort Pierce at all? 

@Dieter W.Do you invest in the Fort Pierce area? 

@Amber Leigh - My target market is an area in Broward. I agree with Tchaka, the numbers aren't great for long term rentals unless you can find an off market deal or listing on the MLS with time sensitive sale needs. For example I got my property from an owner that needed to liquidate due to a divorce.

Any "good" deal on the MLS requires IMMEDIATE action. There is no time to run the numbers, set up a showing, discuss with partner etc then decide. My property was 5 mins from me when I got the email and I wrote a full price offer within 30 mins of list. You can do that if you really know your numbers.

I have been considering Boynton/Palm Beach and have clients (insurance broker) with portfolios in those cities that are doing well. They are however getting pre-market listings from brokers who represent investors. 

Yea start tweaking numbers based on the property features i.e., is it remodeled and has a new roof? Ok maybe we can reduce the 5% monthly holding cost for cap ex and maintenance and repairs to give the cash on cash return a nudge up. 

Are you analyzing properties through the rental property calculator on BP? If not you need to learn that tool and use it religiously. All the questions you just asked will be answered by analyzing using that calculator. There is a youtube video on how to use it. 

Check your cash on cash returns and cash flow and adjust your purchase price from there until you get to the number you want to be at. You work backwards to find the price you can pay. 

Hey @Matthew W Croulet, first of all good on you for thinking the way you do at such a young age and putting in the time to educate yourself. I bought my first biz at 21 and have been self employed ever since. Stay the course. Always be learning. Dive into self education and self improvement constantly and stay fit. "Your level of success will seldom exceed your level of personal development." 

What I wanted to add is that the reno budget of $50-60k seems very low for such a large property. To put it into perspective I am finishing up a remodel on one side of a duplex, 3/2 1200sqft, and i'll be $50k in when completed. It goes fast especially considering roof repairs and mold. Im in insurance and there is good reason many carriers limit mold remediation coverage to $10k. It is EXPENSIVE. 

3,900 sqft is a large home. To do things such as paint/landscape/flooring etc the cost goes up exponentially with larger properties. Also, the property has been sitting and like boats, the longer they sit, the more repairs they need. Any unexpected repairs on a prop that size can translate into big spends. 

I agree with @Jim Goebel on the base hit versus grand slam. A smaller deal can still teach you a ton and offer a great return without the high risk. More important than a monetary return can be the lessons learned, especially at a young age. Also keep in mind that if you found the property so did many seasoned pros (especially if it was with a wholesaler, is now listed with a Realtor and on foreclosure lists). There is probably a good reason it was not snatched up. 

I agree with everything Greg said. Majority of prop on the MLS right now the numbers simply don't work with a financed purchase. I get every listed multifamily property from Dania to LW into my inbox daily from my Realtor. Nothing jumps out as a deal as of late. With that said, you can always make offers..

I invested in Broward and found a deal after months of searching. I would recommend taking the steps below. 

1. Choose a target area. Because you are living at the property this will narrow it down a bit as you won't want to live in certain areas. Get a Realtor to put you on an auto listing email for multi's in your target market.

2. Analyze deals analyze deals and analyze more deals. Even those that don't make sense. Find the number that does.It will help speed you up when viewing properties. Become an expert on market rents and values based on the unit sizes. Do not pay much attention to the current rent. My property rent was under market by 22% and I knew that at first glance. 

3. Do not be afraid of deals that have value add opportunity. Because you are living in the property you and your roommates may see an older outdated property and get discouraged. The deal I bought I completely renovated the 3/2 side of the duplex. It was a dump and will soon be brand new, in a cost efficient manner. All that equity is mine. (get inspections and dont go overboard on reno because you plan to live in it). 

4. BE AGGRESSIVE WHEN A DEAL COMES UP. My property was an MLS deal listed under market as the out of town owner was getting a divorce and needed to liquidate fast. I was 5 mins from the property when the email came in and got it under contract full price within mins of list site unseen. My due diligence of the area allowed me to do so confidently. Turns out I beat a cash buyer friend to contract by an hour.

5. Do not get into a deal just to get into a deal. Set your criteria and don't try to jam a square peg into a round hole. It won't work. 

@Greg Dickerson's suggestions is what will get you a deal in today's market. I also "drove for dollars" writing down addresses and contacting owners in my target area. I got a couple responses but end of day they weren't the size I was looking for. It does work though. 

Hope that helps. Good luck. 

Lot of good feedback here. You mentioned originally "should I be considering what the rent rates should instead of what they currently are?" Absolutely! Get to point where you can see a property and instantly know what the market rent is. I almost don't even pay attention to the current listed rents. I know at first glance what the rents should be based on unit size in my farm area. Learn your market. 

Any "deal" that happens to pop up on the MLS requires IMMEDIATE action. My last property was on the market for under an hour. I made a full price offer immediately after getting the email without seeing the property and it was literally 3 miles from me. I later found out a good friend was going after the same property and he was a cash buyer. I was just quicker. Get the deal under contract and back out later if you want. Daunting yes but just take action.

Outside of the MLS I wrote about 20 letters to owners of properties that fit my criteria and got into two negotiations. Didnt come to an agreement but hey, I made headway and the driving for dollars concept was proven. Get out and find a deal once you really take the time to learn your target area. Hope that helps.

@Daniel Kidd Congrats on your first purchase. So true that once you do it you wish you had started sooner. Any more details you can provide on what the funding via the IRA looked like i.e. tax/penalty implications or rules? Ive been considering doing the same. Ive read arguments for and against it.