All Forum Posts by: Lake Lutes

For 30A, Destin, Panama City Beach, etc - your "on the water" price points are going to vary greatly. For 30A specifically, there are luxury rentals that do hundreds of thousands of dollars a year. Once you hit a certain price point, it is true that it is tough to have a true logical investment. Obviously, money down, rates, purchase price, etc are going to impact your CoCR and cash flow.

To directly answer your question - the $1.2M house is probably going to lose money at 20% with an 8% interest rate. A large amount of the luxury owners on 30A are going to have much more servicable/cheaper debt than that, and have a much smaller note being carried than $900K+ - so it would make sense for them.

Happy to run some numbers on specific examples if you need any help, Justing! Just let me know - this is my primary investment market.

@Justin Aldredundefined

Turning your primary property into an investment property is THE best way for someone to get started in real estate investing. The reason for this is it's much "easier" to purchase a property as a primary home over purchasing a property as an investment property - lower rates, easier lending standards, lower down payments, etc. So - I highly encourage this method!

With regards to what type of rental you'll turn your home into, that all depends on preferences for leaving your furniture, cashflow, desired level of involvement, etc. LTRs will be a bit less involved on your end, but potentially lower cashflow, while STRs or MTRs will be more involved, but generate better potential returns.

Good luck and have fun with it!

Happy to help @Xing Wei ! I cover the entire emerald coast of FL, looking at short term, mid term, and long term rentals. Congrats on taking a big step!

What's up @Jack Morey! Would love to help. Im an investor/agent out here focused operating along the gulf coast of Florida. I'll shoot you a PM and can answer any questions you have!

Hey James! Stoked for you jumping into the STR game out here. The Emerald Coast can produce some huge numbers. Net cashflow is going to differ person to person depending on acquisition date and price, in addition to expenses. Some folks might not have a mortgage, and some might have a large mortgage, and even though they might produce the same gross income, their net cashflow will be different.

Over the past couple of years we've shot for gross income of 15-20%+ of the PP, but now shooting for 12-15%. Higher than that can definitely still be achieved if you know where/how to look! Happy to help if you need any more advice or recommendations out here, let me know!

Hey Sabin! Your investment style/technique is going to depend on a number of different factors - cash available, risk tolerance level, goals, etc. I would advise reading into and studying all the different types of real estate investing, and that should give you some great insight into which style best fits your goals and needs. Studying these methods can come through podcasts, books, online, etc. Best of luck!

Congrats on getting in the STR game! General rule of thumb for me and my clients is having the goal of breaking even or staying just barely in the red for Nov-Feb. March-October is where all of your money I going to be made out here! Let me know if you need any other help or resources.

Hey @Nathan Kawalerski, I'm a realtor/investor our here and would be happy to talk you through some specifics about our area. Make sure to factor the property insurance numbers into your estimates as premiums have risen quite a bit over the past year/few months!

Also - consider all strategies as STRs due well due to tourism and the beach, mid-term furnished rentals do great with all of the local military and hospitals, and long term rentals have great RTP ratios and a strong population basis.

Congrats on starting your journey! Everyone has to take that first step at some point, and this is a great idea/first step!

To answer your question, you do not need to look at only vacant properties. Removing the tenant can be part of any given deal you strike up with the current owner, and delivering the property vacant to you can be one of the terms. In addition, even with an owner occupied loan, the loan companies will give you some lee-way with tenants occupying your new property, and allow them "x" amount of time to vacate post closing (not sure on exact timeline).

If you chose not to make delivering the property vacant as one of your terms, you can always give the tenant in your new property a 30 day notice to vacate as soon as you close. That is not unethical, that is part of the business and part of real estate.

Hope this helps!

I invest in the panhandle of Florida, the Gulf coast specifically, and help other investors invest out here too - there's a lot that would fit your buying criteria: sub-$400K, steady occupancies, and good cashflow. The market is driven by tourism primarily March through October.