All Forum Posts by: Jennifer Turner

As an active investor in Gainesville, I'd be glad to buy something in Virginia, or any other area, assuming the taxes and insurance costs are less there than the astromical amounts we pay here. Last I heard, Alachua, County has the highest property tax rates in the state of FL--maybe 2nd after Miami/Dade? And the city of Gainesville just tripled the mileage rate in 2023, so it's getting worse. Despite appreciation and annual rent increases, I'm actually cash-flowing less each year it seems. 

Also, I used to think the same things as JD Martin above, but both Gainesville and Ocala have blown up, and there are so many more employers besides the university, bringing in many white collar jobs here. I frequently meet people from NY, CA, NV, Miami, and Orlando moving here not solely for jobs, but purely for the quality of life and outdoor lifestyle here. There will also always be a large population of Hari Krishna up in the City of Alachua, and that seems to draw many retirees and younger professionals of that faith to relocate here each year.

Thank you Ray! GNV is packed full of STRs now, so it's a bit oversaturated just like most of the country. Demand has decreased for sure since early 2022, but we personally stay pretty booked, since our house offers three different sized units--a 4/2, which we book out for the big events like graduations and football weekends, the 3/1 side, which is great for small families and couples as well as groups traveling to town for work, and then the 1/1, which we only open up on weeknights between other reservations, and it usually books with a traveling nurse or someone coming to town for an interview or short work trip. If we didn't have that optionality, it'd be pretty slow right now. 

@Darnell Lockett Thank you; agreed! I firmly believe that putting your tenants' safety and best interest first and above profit is one of the most important keys to long-term success as a real estate investor. This leads to mutually respectful relationships, healthy communication, less turnover, less damaged property, higher quality tenants, and better communities overall. 

Since my professional background is in social work as an independent living case manager, I also offer all of our current tenants optional (free) 1-on-1 coaching on budgeting, improving credit score, and home ownership education so that they too can become investors in the future if they choose to. Love being able to merge these two fields! 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $190,000
Cash invested: $93,783

Our 2nd House Hack! Although it's technically a single family home, it has an attached mother-in-law suite with private entrance so the house functions like a duplex. We completed a full rehab and decided to go the STR route with this one, staying in the 1/1 and renting out the 3/1. After a year, we moved out and use the whole 4/2 as an STR.

What made you interested in investing in this type of deal?

We loved the location and the floor plan of the house. Doing a full remodel meant we got to choose the design and could easily set it up as an STR.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

30 year fixed conventional 5% down at 2.85% interest. Used cash and 0% interest credit cards to rehab and furnish the property.

How did you add value to the deal?

Completed a major rehab and furnished the home. Worked as the GC and hired my own subs this time.

What was the outcome?

Subsidized housing expenses during year one, $150,000 of forced equity, cash flowing STR and access to a HELOC we can use for future deals

Lessons learned? Challenges?

Supply chain issues during COVID significantly increased our rehab timeline, but the numbers still worked out in the end.

Investment Info:

Mobile home fix & flip investment.

Purchase price: $6,000
Cash invested: $8,116
Sale price: $65,900

We initially planned to wholesale this deal, but there were existing tenants who had nowhere to go, so we closed on it and allowed them to sign a month-to-month lease w/us until they could find a new place. We intended to either flip it or sell it to a flipper once the tenants vacated, but ended up seller financing the home as-is to end buyers who wanted to fix it up for their own family.

What made you interested in investing in this type of deal?

Low entry cost and a new asset class to try

How did you find this deal and how did you negotiate it?

Seller found us online

How did you finance this deal?

Cash

How did you add value to the deal?

Cleared the land and hired junk removal company to clean out the house

What was the outcome?

$765/month cash flow and 113.11% CoC return for year one . The existing tenants ended up signing a month-to-month lease with us and stayed for 10 months. When they vacated, we cleaned out the house and sold it seller-financed for 10x what we paid for it. We now have monthly income in the form of mortgage payments for the next several years, without the hassle of maintaining the property.

Lessons learned? Challenges?

The only real challenge we faced (aside from the cat odor and fleas in the house) was the fact that the mobile home contractor we were planning to work with to renovate this property passed away unexpectedly before we were able to get started.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $110,000
Cash invested: $43,409

Our first section 8 rental. It's in a C-class area of downtown GNV that is experiencing rapid revitalization, so it's mostly an appreciation play.

What made you interested in investing in this type of deal?

The location is within a 3 block walk of three of our favorite places to hang out in the city, and we know property values there will only increase over time. The city is desperately pushing the need for more affordable housing rentals, so we are hoping to help fill that need in our community.

How did you find this deal and how did you negotiate it?

It was more or less a pocket listing that our realtor friend (from our local BP meetup group!) brought to us. The existing tenants had caused a decent amount of damage to the unit, so seller knew it needed work and was willing to go down on price for a quick sale.

How did you finance this deal?

30 year fixed commercial loan

How did you add value to the deal?

Exterior renovations and repainting, fixed damage to interior and repainted walls, serviced HVAC and water heater.

What was the outcome?

Property appraised for $150,000 so we closed with $40,000 of instant equity. Rehab is complete and we are hoping to secure a long-term tenant soon at market rent of $1500.

Lessons learned? Challenges?

Challenges--we had two trespassing issues that we had to handle alongside local police department, that increased our rehab budget and timeline. Lessons learned--always install security cameras on closing day if the property will be vacant for a while.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Our agent Jenn Barona was great and so was our lender, Matthew Crivelli with Freedom Capital Funding.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $112,500
Cash invested: $5,428

3 bed, 1.5 bath SFR. This was an off-market purchase from a distressed homeowner who needed to sell quickly, as-is. We used a PML so we could close quickly for cash. The home had solid bones and was fairly close to rent-ready, so clean out and rehab took only a few weeks and costed us $4291. We were able to refi into a conventional loan at exactly the 6 month mark, pulling almost all of our cash out of the deal, for a 79% Cash on Cash Return.

What made you interested in investing in this type of deal?

We liked the neighborhood and really wanted to be able to help the homeowner out.

How did you find this deal and how did you negotiate it?

Seller reached out to me because he'd heard that I buy houses. We worked it out so seller would have enough cash after closing to pay off his debts with just enough left over to move his vehicles and boat out of state.

How did you finance this deal?

Private money loan. 80% LTV at 10% interest. Did a cash-out refi after 6 months of seasoning into a conventional loan at a 3.875% rate.

How did you add value to the deal?

Spent several days cleaning out the house (hoarding situation), did extensive odor remediation (cigarette smoke), and did some minor cosmetic updates.

What was the outcome?

$40K of instant equity plus an additional $40-60K of equity from appreciation since then
A great cash-flowing, low-maintenance rental, with virtually no money left in the deal

Lessons learned? Challenges?

Find a good deal and the money will find you.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $175,000
Cash invested: $17,836

Our first deal! Initial "cash flow" after a full remodel and getting all 3 of the extra bedrooms rented out was -$354.
9 months later we refi'ed into a conventional loan, bumping our cashflow up to $132. Rent rates have increased annually as have taxes and insurance, so cashflow has varied but been as high as $411/month while owner occupying. Best part is we only have to pay a fraction of utilities, since they're split between roommates. As of July 2023, this house is valued at $402,000.

What made you interested in investing in this type of deal?

We wanted to get started in REI and preferred to have other people pay our mortgage for us. ;-)

How did you find this deal and how did you negotiate it?

Our agent brought us an off-market, expired listing. It was a vacant, inherited property with a lot of deferred maintenance.

How did you finance this deal?

FHA 203K Loan. We put 3.5% down and wrapped the entire rehab into the loan.

How did you add value to the deal?

We did a full cosmetic remodel, replaced the roof and HVAC, updated plumbing and electric, expanded the kitchen, added an office, and took down some walls to open up the floor plan in the common areas.

What was the outcome?

My husband and I have kept our total housing expenses over the last 4 years between $0 and $700/month. Without this first house hack deal, we wouldn't have been able to save up capital for our next several deals.

Lessons learned? Challenges?

We inadvertently got a PhD in tenant screening, lease enforcement, contractor management, and order of operations for rehabbing.
The 203K Loan was essential for us to get our feet in the door, but if given the option again, we would choose the conventional financing route and cash-flow the rehab ourselves (or with 0% credit), rather than jumping through all the hoops required by the FHA.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We used Chris Doering Mortgage out of Gainesville, FL, and have used them for multiple other purchases/refinances since then. They understand our goals as investors and always have the best customer service.
Our agent Michelle Florence was also a rockstar. She was born and raised in the area and has worked this market for well over 20 years, so she knows everything about the town and just about everyone in it.

@Justin Wadsworth Gainesville made the top 20 list last year too. But unfortunately with hundreds of new airbnb units added last year in Alachua County, it's already pretty saturated here. Local ADRs and occupancy rates are significantly down from last year, and in my opinion, AirDNA's estimates are inflated. This article points out the relatively low home prices here, but neglects to mention that we have the one of the highest property tax rates in the state, which definitely affects cash-flow, especially combined with FL insurance costs. 

I would recommend getting prequalified with a traditional lender and use your VA privileges for a 30 year fixed rate low or no money down option, especially if it's your first deal. That way you can use any extra funds or income you have for the renovations and take advantage of the current relatively low interest rates which will likely be higher 6-12 months from now. There are even VA loan options that will allow you to roll the renovation costs into your loan, so ask about that when you're vetting different mortgage brokers. You can always refinance later down the road if you'd like to, once it's fixed up and has appreciated some, but you won't be running the risk of struggling to get out of a hard money loan if the rehab doesn't go as planned or the market or interest rates take a turn for the worse.

We have a local BP meetup group here in Gainesville so send me a message once you get here if you'd like to join us and I can send you the details.